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Tax Savings

Know the Tax Benefits of a Joint Home Loan

Having your own house is a dream for many. A home is a “once-in-a-lifetime” investment that gives you. Buying a house is no cakewalk (primarily due to fluctuating market prices). With so much competition between buyers, financing a home can be difficult. Many turn to loans to help them finance a new property. A housing loan is a viable option. However, sometimes even qualifying for housing loans can be difficult. In this case, you can apply with a partner for a joint home loan. Do you want to apply for a joint home loan but are confused? You will find the correct answer to this question in this article. This article discusses all you need to know about joint home loans, their benefits, and all the tax exemptions available to applicants. What is a joint home loan, and what is its significance? A joint home loan is a form of financial assistance you take from a lender with a co-borrower to build or buy your own house. The co-applicant can be an immediate family member or your spouse. If you don’t qualify for a home loan, you partner with another person, and both can repay the loan. You and your co-borrower share the responsibility of repaying the loan at a specific interest rate. The lender gives both of you a stipulated time limit within which you have to repay the debt in instalments. What are the benefits of applying for a joint home loan? There are several benefits to choosing a joint home loan. These benefits are as follows: A larger loan can be sanctioned. Lenders allow a larger loan amount as two borrowers bear the repayment responsibility. The loan amount can go as high as Rs. 10 crore or even more in some cases. However, this depends on your and your partner’s income, CIBIL score, creditworthiness, etc. The risk is reduced. As the housing loan is taken on a joint basis, the responsibility falls on the shoulders of both borrowers. So, the level of accountability is lower, and as a result, banks are less concerned. The tenure of repayment is longer. In India, most banks allow a tenure period of 30 years for joint home loans. If you have applied for a home loan alone, you will probably not get a longer tenure for repayment. The approval process is faster. The approval period varies from bank to bank, but most loans are approved within 3-5 days. Some also provide pre-approved joint home loans. You get appealing interest rates. In India, the interest rate for joint home loans starts at 8.25% per annum. Adding your spouse as a co-applicant will give you an additional discount on the interest rates. What are some of the tax benefits of applying for a joint home loan? If you and the co-applicant are contributing together to the repayment process, there are twin tax benefits that both of you will be enjoying. First, under Section 80(c) of the Income Tax Act, 1961, you and the co-borrower can claim a tax exemption of up to Rs. 1.5 lakhs per annum on the principal amount. Second, under Section 24(b) of the Income Tax Act, 1961, each co-borrower can claim a tax deduction on the interest of the loan, which is up to Rs 2 lakh. What are the conditions to claim tax benefits on a joint home loan? Here are certain conditions that you need to fulfil to claim tax benefits for a joint home loan: You should also be mentioned as the co-owner of that property. You may not be able to claim the tax benefits if you do not have the property registered in your name. Since it is a joint home loan, you can only claim the tax benefits if you own that property. You have to be a co-borrower on the joint home loan. According to the loan documents, you must also be an applicant for the loan in addition to being a co-owner of the property. Otherwise, you cannot claim benefits under these sections. Tax benefits can be claimed only if the construction of that property is complete. You cannot claim any tax benefits if the property is incomplete or under construction. Under-construction properties are strictly prohibited from receiving any tax benefits. What are the joint home loan tax benefits? For two different categories, there are many benefits: For the borrowers who own the property: If you and the co-borrower co-own the property, each of you can claim a tax deduction of up to Rs. 2 lakh on the loan amount. The total interest paid by both is divided between the applicants in proportion to their stake in the property. For the borrowers who rent a property: If you and your co-borrower jointly claim the house, you can ask for larger tax advantages against the interest you pay on the joint house loan as a family, provided that the interest is more than Rs 2 lakh per year. [B-02] Conclusion A joint home loan is a great way to get financial backup to build a house for your family. It can help you get a larger loan amount because the risk is divided. Furthermore, the tax benefit is often shared between you and your co-applicant. The tax benefits are divided according to the percentage of the property you hold. Ownership is the fundamental requirement to get any tax benefit, and the whole system is different if you have a rented property.

08-11-2023

How To?

How To Invest In A Public Provident Fund Or PPF?

What are your plans for investment this financial year? Are you aware of tax saving schemes? Want to learn more about investments? While investing, make sure you have a forecast for the long term. At the same time, the investment must be a tax-saving option. High returns and low risks are the key features of a long-term investment. These include shares, mutual funds, public provident funds, LIC, and so on. If you want a minimal-risk long-term investment, the Public Provident Fund (PPF) is one of the best options. It guarantees both the principal and the returns it provides. Want to know more about the PPF scheme? Keep reading further. [B-01] Public Provident Fund Public Provident Fund (PPF) is one of the most popular long-term investments in India. The Finance Ministry’s National Savings Institute introduced the PPF scheme in 1968. Its primary goal is to encourage people to save money. PPF also pays interest on savings. This investment combines tax benefits, financial returns, and security. It also offers an attractive interest rate. Income tax is not applied to the interest earned or the returns. Below is a table that explains the different aspects of the PPF scheme. Interest rate7.1% Per AnnumMinimum and Maximum amountRs. 500 to 1,50,000 Per AnnumInvestment tenure15 yearsTax BenefitUnder Section 80C, up to Rs. 1.5 lakhs Per AnnumMaturitysubject to the tenure of the investment Features of Public Provident Fund (PPF) Here are some of the key features of PPF: 1. Tenure PPF is a long-term investment with a lock-in period of 15 years. Only upon maturity, you can withdraw the accrued funds. You can also choose to extend your tenure for another 5 years when the real lock-in time is over. Only in cases of emergencies are premature withdrawals permitted. 2. Interest rate The government determines and pays the PPF interest rate every quarter. The PPF interest rate for the third fiscal quarter of 2022–2023, has been set at 7.1%. 3. Amount of Investment You can invest a minimum of Rs. 500 to a maximum of Rs. 1,50,000 every year. 4. Tax Benefits Section 80C of the Income Tax Act of 1961 exempts the PPF interest and maturity amount from taxation. 5. Nomination You can name a nominee for your PPF account when you open the account or even later. 6. Loan against PPF A PPF account holder can borrow against their balance. However, you can obtain the loan only in the third and sixth years. The maximum loan amount is 25% of the PPF balance. 7. Risk Factor PPF is a risk-free investment. You get guaranteed returns from it. 8. Mode of deposit You can deposit the PPF amount by cheque, demand draft, cash, or online transfer. 9. Joint Account You can have only one PPF account under your name. How To Invest In A Public Provident Fund Or PPF? Below are the steps to invest in a PPF scheme: The right time to invest in PPF There is no such ideal time, but the best time to invest in a PPF is at the start of the year. This is because if you invest in PPF in this manner, you can earn interest on your deposits for a full year. Eligibility Criteria You can open a PPF account only if you are an Indian citizen. There is no age limit for opening the PPF account. For minors, parents or guardians can open the account. You can open only one PPF account. Opening a new PPF account offline You can open a PPF account by visiting any bank or post office branch. The documents you require are as follows: Fill out the application form for opening the PPF account. You must produce ID proof, such as a passport, Aadhaar card, or Permanent Account Number (PAN) card. You must submit address proof that shows your current residence. Signature proof documents (Pan card., Aadhar card, Passport) 2 Passport-size photos. Fill out Form E for nomination details. Birth Certificate (for minor) along with the above documents for parents or guardians. After verifying the documents, you can deposit the amount in your PPF account. Each document requires self-attestation. Additionally, you must have all the original documents for validation. After validation, you will receive your PPF account number with the passbook. Opening a PPF account online Step 1: Log into the selected bank’s internet banking or mobile banking portal. Step 2: You can select the ‘Open a PPF Account’ option from it. Step 3: If the account is for yourself, click on the ‘Self Account’ option. If opening on behalf of a minor, select the ‘Minor Account’ option. Step 4: Fill in the application form. Step 5: Enter the deposit amount you plan per financial year. You can set standing instructions at this stage. Step 6: Now Apply. Once done, you will receive an OTP on your registered mobile number. Enter the same and verify. Step 7: Once verified, your PPF account is good to go. You can see the PPF account number on the screen. You will also get an email to your registered email address with all the details. Linking your Aadhaar with your PPF account online. Step 1: Log in to your internet banking account. Step 2: Select “Registration of Aadhaar Number in Internet Banking” Step 3: Type your 12-digit Aadhaar number and then click ‘Confirm’. Step 4: Choose the PPF account and link it with your Aadhaar. Step 5: Click on “Inquiry” to check the status. Withdrawal of the PPF amount You can only entirely withdraw your PPF account upon maturity, or after 15 years have passed. The whole amount and any interest accrued may be withdrawn at any time after 15 years. You can close the account upon withdrawal. However, you can choose partial withdrawals after the completion of 6 years. Premature withdrawals are permitted up to 50% of the balance in your PPF account at the end of the fourth year. [B-02] The Bottom Line The PPF scheme can be a fantastic alternative if you don’t like taking on high-risk investments, yet want the assurance that comes with government-backed investments. To learn more about financial instruments or investments, you can always visit the Piramal Finance website.

08-11-2023

Home Loan

Pro tips to reduce home loan interest rate in the current time

Having a house of your own is a great accomplishment but with that comes the burden of repaying the housing loan. At times the burden keeps on banking on your shoulders and ineffective planning can even cause you more trouble. Having said that, there are many things that you can do about it. You can reduce your housing loan interest rate by just making some smart choices and investing correct strategy. This article will let you know more about the housing loan and its benefits, the factors that influence your installments, and some of the best ways to reduce your interest rate. [B-01] What is a housing loan and what are the benefits of going for it? A housing loan is financial assistance that you take from a lender to buy, renovate, or construct your house. In return, the lender charges you an interest rate which is added up to the installments that you pay on regular internals. The lender also gives you a set period within which you have to clear all your dues. There are many benefits of applying for a housing loan and they are: Tax benefits: This is one of the biggest advantages of applying for a housing loan at the current time. To encourage people more and more to have their shelter and fulfill their dreams of owning a house, the government reduces the tax percentage on both the principal amount and your interest rate. Low rate of interest: Interest rates on housing loans have decreased a lot, especially in this decade. Banks often charge you a low rate of interest on the principal amount so that you can easily pay off your debt in the form of small installments. On top of that, several government schemes aim to provide home loans at low-interest rates. Saves you from paying rent: When you have your own house, you are away from the hassle of paying rent. Paying EMI every month is way better than paying rent for a house that you don’t own. And also, in many cases, the amount of rent is quite high and it gets difficult for you to manage this amount from your monthly budget. Easily payable: Banks give you the option of equated monthly installments or EMI which is a very small amount. So, you can easily cut that off from your monthly budget and pay your EMI at your convenience. The long tenure of repayment: You have options to prolong the period of repayment of your loan amount. In many cases, you can stretch up to 20 to 30 years and steadily pay off your debt. No prepayment penalties: Another benefit of applying for a housing loan is that you don’t have to worry about the extra charges or the penalties in case you want to pay your installment before the scheduled time. You have the authority to pay your due before the arrival of the date of repayment. How to reduce your house loan interest rate at the current time? When it comes to saving money from your housing loan, all you need to do is opt for smart choices. The smarter the choices, the lesser the interest rate and EMI. Due to the unavailability of guidance and consultation, you can get into the mess of paying more than you are expected to. So, three things revolve around this whole concept– the principal amount, the rate of interest, and the tenure of repayment. You just need to adjust them in such a way that you pay less and save more. To reduce your house loan interest rate, you need to follow these simple steps: Reduce your repayment period: It might seem lucrative to opt for a tenure of 20 years or 30 years to repay the existing debt. But what is more important is that you need to reduce your interest rate and to do so you should reduce your tenure as well. Banks charge you a low-interest rate if you reduce your period of repayment. Say, 10 years to 15 years are an ideal preference to repay your housing loan. Make down payments: If you make a down payment at the beginning, your total principal amount is reduced. The lesser the loan amount, the lesser your rate of interest. Make sure you at least pay 25% of your loan amount as a down payment, so that the interest rate becomes tiny as well. Make prepayments whenever possible: Since most banks don’t charge you a prepayment penalty, consider paying it before the due date. Suppose you have surplus money before the month ends and you are not sure if you could save that much till the month’s end, pay it now. You should take advantage of this feature to reduce your rate of interest. Look for balance transfer options: If you are quite uncomfortable with the installment amount and the rate of interest that your current lender is charging, look for a new lender. Look for a lender who charges you less, gives you options with your EMI, and has better terms and conditions. Compare different interest rates: Make sure you conduct a lot of self-research by approaching different banks. Compare different offers, different interest rates, etc. and choose the one that suits you the best. [B-02] Summing it up A housing loan is your way to go to have a house of your own but with it, you also have to repay the debt. And when it comes to reducing your housing loan interest rate, you should make smarter choices and devise the correct strategy. You can use a housing loan calculator to spin different offers and see what you are comfortable with. If you loved this article and you want to read more on this topic, then there is a great website called Piramal Finance. It has multiple write-ups on topics like personal finance, housing loans, investment schemes, smart financing, etc.

08-11-2023

Business Loan

Pro Tips To Grow Your Small Business This Festival With The Best Business Loan

Growing a business is a responsibility that every entrepreneur holds and wishes to accomplish. Especially due to a lack of finance and cutthroat competition, it might get tough to stand in the battle sometimes. A business loan, however, can help you have the leverage and take your business venture to another level. Want to know how to grow your business in the festive season with the help of a business loan? Stick to this article to find out everything about business loans, the benefits of taking them, and the ways to grow your business and take it to another level. [B-01] What exactly is a business loan and why is it applied for? A business loan is a type of loan that you take from a lender to invest in your business and multiply your growth. The lender lets you borrow money to help you invest in buying raw materials, investing in equipment, spending money on advertising, etc. In return, the lender charges you a specific rate of interest on the principal amount and gives you a set period within which you have to clear the due. You can take that money and invest in it, growing your business, producing more goods and services for your businesses, and increasing your sales over time. It gives you a kick-start to your business and helps you overcome the cutthroat competition in the business world. What are the benefits of taking a business loan during the festival season? Since the festival is around the corner, you need to meet consumer demands effectively. And for that, you need to ensure that you produce more products, focus on providing quality services, and tackle the marketplace. Here are some benefits of getting an online business loan this festival: High loan amount: Banks offer you a high loan amount to help you invest more in your business venture. The loan amount can go up to as high as 50 lakhs. In some cases, if your credentials are strong and your business is profitable, then the loan amount can be stretched to even 1 crore. In addition, various government schemes also focus on providing you with high loan amounts and charging you minimal interest rates. No collateral: Since most business loans are unsecured, there is no need for collateral or any type of security deposit while applying for it. This is a benefit for you if you are a new entrepreneur and you lack collateral of any kind to make a start. Low rate of interest: The rate of interest on most business loans is quite low to make sure that your maximum money is invested in your business. You have to deposit a minimum amount of money as instalments and the rest you can use to grow your business. Mostly, the interest rate that most banks charge is between 15 per cent per annum to 20 per cent per annum. You can also look for government schemes that subsidise more so that you don’t have to pay high interest. Quick disbursal: The approval process is quite fast and you can get your money disbursed within a day Or sometimes, within two to three days. If your credentials are well and the bank has special offers for the festive season, then you can get approval in lesser time. How to scale up your small business with a business loan during the festive season? With increasing consumer demand, you have to make sure that you focus more on the quantity part along with maintaining the quality of your products. And to do all of that, it takes a good strategy and smart financing choices. Invest in equipment: Especially, to increase the production of products to meet customer demands, you need to buy more equipment. The new equipment will be more efficient than the previous ones and help you produce on a large scale. Invest in the workforce: The best way to intensify the whole process, you need to hire more workers. Hiring more workers will not only increase production but also fasten the process. You have to make your inventory full of your goods so that when the time of sale comes, all you have to do is focus on selling more products. Invest in manufacturing: Invest the money you take from the business loan in your manufacturing sector as well to produce more goods and keep it in surplus for your inventory. Make sure you have all the raw materials and other requirements to produce more goods in bulk. Invest in advertising and marketing: This is a very effective and huge step to increase your sales and take it to the roof. Advertising your product will let people know about your products and offers, and will bring more customers to you. This will amplify your sales and to even fasten the process, you need to market that effectively. Make sure that you don’t invest a lot of money in advertising, and focus more on product manufacturing. Website creation: If you have always wanted to have your business website, this is the right opportunity and the right time to do so. You can use a small part of this business loan to invest in creating a website for yourself. Make your website appealing, curate it, and add your social media handles to increase insights and traffic on your website. [B-02] Summing it up During the festive season, you have to make sure that your inventory is always in surplus and that you never run out of any raw materials. Use the business loan to curate your website as well so that you can connect with more customers who would like to purchase your goods. If you can manage home delivery services in your city, that would even help you increase your sales. If you liked this article, and you want to read more on this topic, you can visit Piramal Finance. It has ample content on personal finance, investment schemes, loan systems, stock market information, etc.

08-11-2023

Business Loan

Everything you need to know about evolution of business loan interest rate

Are you a business owner looking to invest? Or do you want to grow your business? Either way, a business loan is your answer. Running a successful business is no simple feat. Growing it is an experience. It can be both enjoyable and stressful. But, it has many financial-related points. Starting from investment to salaries, the range of expenses is vast. And businesses can have dips in certain periods. So, maintaining these necessary expenses at times can be difficult. And this is where business loans help you. All business loans have interest rates. But it depends on the lender or financial institution. It also includes loan duration and other factors. Some lenders provide cheap loans. But some charge high-interest rates. So, always negotiate the interest rates and terms ahead. [B-01] What is a business loan interest rate? A business loan interest rate is the amount a borrower must repay the lender. It is beside the principal borrowed. It is often calculated as a percentage of the total amount borrowed. Sometimes, interest and annual percentage rates (APR) are interchangeable. But they are not the same. APR also includes any extra lender fees. Many factors influence these rates. It includes credit score, loan type, and loan amount. Lenders may also have certain conditions. E.g., minimal requirements for qualification. The history of business loans in India Do you know that India’s banking system has existed for a long time? It dates even before the British empire. The Vedas and Manusmriti have talked about many money-lending practices. Sanskrit scriptures also contain terms like kusida, vardhusa, vridhi and vyaja. These refer to business loan interest rates in ancient India. As early as the 5th century, business loans were given in cash and kind. The interest that may have been imposed on such loans is mentioned in ancient texts. Baudhyana, Gautama and other lawgivers wrote these. In ancient India, offering high business loan interest rates was unethical. Later, the culture of loans in India flourished. We have proofs of the same in Arthashastra and Dharmashastra. It talks about providing business loans at different interest rates. The Dharmashastra only allowed Vaisyas to become moneylenders. They used to levy higher interest rates to lower caste borrowers. Then, during the Mughal era, Dastawez came into play. It was a new type of money lending that became popular. The Industrial Revolution (1733–1913 A.D.) shifted India’s focus from agriculture to industrial processes. People needed more capital for business. Thus, the whole system developed. Many merchants offered business loans to entrepreneurs. It was to help them expand their workforce. Indentured loans were also common. The borrower had to repay the amount by working on the lender’s land. Seths and Shroffs were moneylenders. They helped merchants with business loans during the early days of the EIC. Many banks were also established in India during British rule. The first European bank, the Bank of Hindoostan, opened its doors in Calcutta in 1770. It offered loans for overseas trading. It did, however, fail in 1832. Banking activity began in full swing in three presidencies. These are Bombay, Calcutta and Madras. The Bank of Calcutta was established in 1806. It aimed to fund the battles of the Marathas and Tipu Sultan. The Allahabad Bank was formed in 1865. It is still operational today. After this, other banks were created between 1906 and 1911. It was due to the Swadeshi Movement. The Reserve Bank of India was created in 1935. It was in response to India’s economic difficulties after World War I. Business loans during the 20th century: The advent of technology The nationalisation of banks was a major practice post-1947. In 1949, the RBI was nationalised. It was appointed as the reserve bank regulator for all banks. India nationalised fourteen banks in 1969. This was to increase public access to banking and commercial financing. With technological advancement, economic liberalisation in 1991 marked a new beginning. The global internet revolution was in full swing. The financial industry quickly jumped on the wagon. Since then, many banking functions have been automated. Customers can now apply for business loans online. This boosted the lending process. It also encouraged more people to apply. There was a rapid modernisation of payment systems and settlements. This includes ECS, RTGS, and NEFT. These generated many business opportunities. And it helped small businesses to function well and fast. Business loans of the 21st century The whole peer-to-peer lending gradually underwent a drastic transition. Previously, financial institutions offered a wide range of services. But they were under a single umbrella. This included almost everything. For example, typical banking, mortgages and trade services. FinTech, in its most basic form, separates these services into discrete offerings. It combines services and technology to offer better solutions. This is how FinTechs are more efficient and reduce transaction costs. Mobile payments, blockchain and digital currencies are prominent Fintech inventions. These have radically revolutionised the financial system. Today fintech has changed the whole banking process. Now, many business loan providers offer all businesses simple and quick platforms. It helps people to apply and get working capital fast. Also, lenders can now better understand their clients’ demands. They can provide customised products and services. Now borrowers can get business loans within a few hours of applying. All thanks to FinTech. You do not have to wait for loan approval for days. It takes just hours if you provide the correct documents. [B-02] Final thoughts If you are looking for quick business loans, Piramal Finance has got you covered! We have over 40 years of expertise and over 1 million customers. So, we are dedicated to offering you good business loan interest rates. We also have many company loans with no collateral at low rates. Get your loan approved fast without much hassle. The whole loan application procedure is paperless. Loan repayments are also quite flexible! You can pay in instalments at your capacity.

08-11-2023

Tax Savings

What Are the Home Loan Tax Benefits in 2022: All You Need to Know

Almost everyone dreams of owning a house. However, everyone does not have adequate resources to buy one instantly. While some save money, most people apply for a home loan. A home loan includes the principal repayment and the interest amount. Both the interest and the principal amount qualify for tax deductions. Under the Income Tax Act of 1961, the Indian government offers various tax benefits on home loans. Hence, if you are planning to buy or build a house, you should know the home loan tax benefits provided by the government. [B-01] Home loan tax benefits in 2022 The tax benefits that apply to various types of home loans in 2022 are as follows. Home loan tax benefits under Section 80C: Repayment of the principal amount You can avail of a maximum deduction of Rs 1,50,000 each year on the principal repayment portion of your home loan EMI. This income tax benefit applies to both rental and self-occupied properties. You can claim the stamp duty and registration fees once and only in the same financial year. The total deduction cannot exceed Rs. 1,50,000 per year under Section 80C. Furthermore, you must have a fully constructed property to claim this home loan tax benefit. You cannot avail of this benefit if you sell your property within five years of possession. All tax deductions claimed will be reversed if you sell your home before five years. Furthermore, the sale amount will be added to your income. Home loan tax benefits on interest payments under Section 24 Under Section 24(b) of the Income Tax Act, you can claim a tax benefit on the interest you pay on the housing loan. In the case of a self-occupied house, you can avail of a deduction of up to Rs. 2,00,000 on the payable interest amount. If you own two houses, the aggregate tax deduction cannot cross Rs. 2,00,000 per year. If you have rented out your property, you can claim the total interest you are entitled to pay on your housing loan for construction, purchase, repair, reconstruction, or renewal as a tax deduction. However, under the Income from House Property Act, the loss adjusted against income cannot be more than Rs. 2,00,000. You can carry forward the remaining loss amount for eight years to accommodate the loss against the income accrued from the house property only. Only the home loans sanctioned on or after 1st April 1999 are eligible for these deductions. If you purchased a property still under construction and are paying EMIs, you can claim the interest payable on your home loan as a deduction once construction is complete. The Income Tax Act of 1961 allows you to claim a deduction of the interest payable during and after construction. The interest payable during the pre-construction period can be given as a deduction in five equal annual instalments. These instalments start only after construction is complete. Home loan tax benefits under Section 80 EEA: Interest on home loans for first-time buyers The interest amount you need to pay on your home loan is also liable for an extra deduction. A maximum of Rs. 1,50,000 can be deducted. However, to be eligible for this home loan tax benefit under Section 80 EEA, you need to fill in the following criteria: To purchase a residential home, you should borrow your home loan either from a housing finance company or a financial institution. Only the loans approved between 1st April 2019 and 31st March 2022 are eligible. The housing property stamp duty cost should be less than Rs. 45,00,000. The taxpayer must be a first-time buyer. If you and your partner own the housing property together and contribute towards the loan repayment, both are eligible to claim deductions. Both resident and non-resident owners can claim home loan tax benefits under Section 80 EEA. Since the 2022 budget has not extended the deduction benefit available under Section 80 EEA, individuals taking a housing loan on or after 1st April 2022 will not be eligible for this benefit. Home loan tax benefits under Section 80C and Section 24: Joint home loans on the principal amount and interest payment If you have applied for a housing loan with a spouse or partner, both can avail of a deduction of up to Rs. 2,00,000 on the housing loan interest payments under Section 24(b). Each party can also claim a deduction of up to Rs. 1,50,000 on the principal repayment amount under Section 80C. In this case, the tax benefit is doubled compared to the benefits available for a loan taken by a single party. However, to be eligible for this home loan tax benefit, both parties must be co-owners and should pay their EMI payments without fail. Home loan tax benefits under Section 80EE Under Section 80EE, first-time buyers can avail of a maximum deduction of Rs. 50,000 on the payable interest payable on their home loan in the following cases: The monetary value of the acquired property is not above Rs. 50,00,000, and the loan amount is at most Rs. 35,00,000. The home loan should have been approved between 1st April 2016 and 31st March 2017. You can benefit from the advantage offered by this deduction till the repayment of the loan continues. This deduction has been made accessible from FY 2016-17 and is still in effect. [B-02] Conclusion You can easily own your dream home with the help of a housing loan. Although a home loan can be an additional burden, you can somewhat lessen its weight by availing of the various government-backed home loan tax benefits. Contact a financial expert if you do not understand the various tax benefits or the details of tax deductions. You can now transform your dream of owning a house into a reality with the different types of home loan options provided by Piramal Finance. Piramal Finance is a housing finance company registered with the National Housing Bank (NHB) and provides retail and wholesale funding opportunities across sectors. Unique features like zero prepayment and foreclosure charges, minimum documentation, quick sanction, and instant disbursals make Piramal Fiance stand out. Reach out to experts from Piramal Finance to understand more about the different types of home loans.

08-11-2023

How To?

How to Transfer EPF Online Through EPFO Portal?

The Indian government would pay the employer and employee contributions to employees’ EPF accounts. For an additional three months, from June to August 2020, the edge goes to businesses with fewer than 100 employees, 90% of whom make less than Rs 15000 a month in pay. Non-government organisations now only contribute 10% instead of 12% to the EPF. An individual can open a Public Provident Fund (PPF) or Employee Provident Fund (EPF) account. Both require the employer and employee to contribute a portion of their earnings. Because of their E-E-E (exempt-exempt-exempt) nature, Employee Provident Funds (EPF) are a great option for paid individuals. It was decided that making investments in EPF, earning interest through EPF, and withdrawing from EPF after five years were all privileges. This article describes the process of performing a PF transfer online. Keep reading to learn more about it. Required Form for PF Transfer Transferring PF monies across accounts necessitates the use of Form 13. To transfer their PF balance from their old account to the new one. When salaried individuals switch employers covered by the EPF Scheme, they must fill out this form. This is very vital. EPA Form 13 The EPF offers a transfer form called EPF Form 13 that can be received in person or online. Fill out the PF Form 13 and submit it to transfer the EPF account. Qualification for PF Transfer Employees are required to confirm that their registered mobile number and UAN are operational on the EPFO portal. When requesting a transfer The PF subscriber must sync any bank information that has been confirmed by the company, such as bank account information and an IFSC number. On the EPFO website, the employee must enter their Aadhaar data. The site should show the joining and departing dates of the PF participant. Additionally, the worker must give their reason for quitting. Please keep in mind that the EPFO portal only permits one PF transfer request to be submitted at a time. Now that customers are aware of how to move PF online, it’s time to identify the paperwork you’ll require to ensure that everything goes smoothly. Below is a list of the paperwork needed for the online PF move process. Alternatives for PF Transfer For PF transfer, there are primarily two approaches: PF Offline Transfer The employee must fill out the PF Form 13 with all pertinent information and submit it to the current employer to use the offline PF transfer option. Following that, the existing employer will send the application to the EPF office. The form will then be sent to the former employer by the EPF office for verification. After receiving confirmation and attestation from the prior employer, the EPF office will transfer the remaining funds from the old account to the new one. There is no need for copies of the applicant’s UAN or Aadhaar card. When a person has numerous staff IDs, the EPFO assigns each employee a UAN, which acts as a unique identification number. Online Transfer Claim Portal (OTCP) A method for transferring PF funds online. To use this helpful online portal, the PF member does not need to provide their UAN, Aadhaar, or other documentation. By attempting to submit a few financial details and employment information, you can transfer your PF. One Employee, One EPF Account: This regulation was put in place to prevent confusion brought on by having numerous PF subscriber data. All current PF accounts will be included in this endeavour, according to EPFO. The PF members’ ability to submit multiple PF transfer applications helps achieve this. Automatic EPF balance transfers are only possible when transferring a PF account from another account, and they require the subscriber’s UAN. The subscriber doesn’t have to exert much effort during this process. The PF will be allocated when their new employer enters their UAN into the system. Pension Plan for Employees The Compensation Act of 1952 specifies how an Employees Provident Fund (EPF) operates. Organisations with 20 or more employees must follow it. However, other organisations may voluntarily take part in this programme. This organization might join a government-approved project, or it might launch a retirement program to build trust. Each one of the known Provident Fund Schemes requires official approval from the Commissioner of Income Tax (CIT). Documentation Needed for an EPF Transfer Form 13 Revised, Universal Serial Number (UAN), Number of Establishment, Identity Verification (Aadhaar, PAN, or Driving License), Employer Information (must be Your Current Employer), Financial Institution Information, and PF Account Information (for both old and current accounts) How to Complete an Online EPF Transfer Form Step 1: Log in to the primary webpage of the EPFO portal using your credentials. Step 2: Once you’ve logged in, click the “Online Services” page. Then “Each Member – One EPF Account (Transfer Request)”. Step 3: Carefully go through all the data on the screen, then enter the details of the PF account to which the money will be transferred. step 4: To obtain the account details for the prior job, choose “Get Details” in. Step 5: Click on “Previous Employer,” then type the UAN and the final ID number. Step 6: Complete the online EPF Form 13 form. Step 7: To enable tracking of the application process, a tracking ID will be generated. Step 8: is to duplicate the form and sign it. After the date of procurement, the applicant has ten days to submit the aforementioned paperwork. Step 9: Both new and former employers must certify the data on the application. Step 10: Before the funds are moved to the new account, the information on the form must have the approval of both employers. [B-02] Conclusion It’s usual for workers to change jobs mid-career between PF-registered firms. But transferring PF rather than withdrawing it can help to protect it. Another key tax consideration is the fact that withdrawals from the PF done within five years of employment are taxed. Your UAN account is where all of the PF money from previous jobs is accumulated under several member IDs. The EPFO portal will save you the time it would take to look for your own money.

08-11-2023

How To?

Complete guide on how to calculate HRA

HRA is one of the most important factors to consider for your salary. HRA stands for House Rent allowance. It is taxable under the Income Tax Act. Every employer is responsible for providing HRA to their employees. If you are a salaried employee, you can claim HRA. The house rent allowance helps to meet all your accommodation-related expenses. It is the amount your employer will provide the employees with the cost they need for a rented property. If you are eligible for HRA, you can reduce the tax liability. The allowance may vary depending on your city, as it helps cover the cost of living in that particular city. [B-01] What is HRA? HRA stands for House rent allowance. The employer provides employees HRA to cover the house rental expenses that the latter needs to pay. It is an integral part of the salary slip of the employee. The allowance is taxed depending on different factors. If the employee needs to pay rent of more than Rs 1,00,000 annually, they will need to provide the PAN number while filing for the returns. If any employee pays the rental expense but does not get the HRA from the employer, they can claim it under Section 80GG of the Income Tax Act, 1961. This is also valid for self-employed individuals who do not receive salaried income but are paying rental expenses. What is an HRA Tax Exemption? As per the Income Tax Act of 1961, the HRA is exempt from the taxation of the employee. The rest of the amount will still be taxable. Certain criteria are met to understand how much allowance for house rent will be deducted from the salary. It is essential to calculate the deductions of income tax calculation. However, the HRA online can play an important part in making the right choice. A salaried employee will not be able to claim HRA if they live in a house of their own. The main purpose of allowance for house rent in the salary is to cover rented properties and not for properties you own. Compared to the old regime, significant changes have been brought to the new regime. As per the new regime, there won’t be certain exemptions that existed in the old regime. You need to file for the deductions properly. If you need help with filing for the allowance, you can get in touch with professionals. The accountants and financial experts are well aware of HRA deductions and can help you make the right choice in filing. How is the HRA Calculated? The House Rent Allowance, as stated above, is a major part of your salary. Certain factors will be considered while calculating HRA. Some of the major factors that will form to be an important part of the HRA include the following: Salary: The Dearness Allowance and Special Allowances of your salary will be important in determining how much HRA you can get from your salary. Rent paid: The rent you pay for living in the expense is one of the main factors to consider for HRA online claims. You can only claim the HRA if you have sufficient proof. You will need the bank statement, rent receipts, and lease agreements to provide that the rent is being paid every month from time to time. HRA from Employer: How much HRA does your employer provide you? You will only be able to make claims if you’re familiar with these factors. Residence: The place of residence will have a huge impact on HRA. Anyone living in a metropolitan city should have an HRA of at most 50% of the basic salary. For the ones living in a non-metropolitan city, the limit is around 40% of the basic salary. Can I Claim Hra If I’m Also Claiming Home Loan Deductions? You must know the eligibility requirements if you consider claiming home loan deductions on your tax return. If you meet the requirements, you can claim HRA and home loan deductions on the same tax return if it’s an eligible deduction. Here’s a guide to calculating your HRA deduction: HRA Exemption You may be eligible for the HRA exemption if you’re an Indian employee contributing towards your income tax liability. This exemption is a provision in the Indian Income Tax Act that allows employees to contribute up to Rs 2 lakh towards their income tax liability. To qualify for the exemption, the employee must earn more than Rs 6,000 per month and have been with the company for at least six months out of the past 12 months. If you need help calculating your HRA eligibility, don’t hesitate to reach out to us. HRA Exemption When Employer Refuses to Provide Deduction Benefits If your employer refuses to provide deduction benefits, it is easy to calculate your own HRA. This can be done by using a calculator or online calculators available online. The amount you get back will depend on the type of employee you are and the size of your employer. Be sure to speak to an accountant if you have any questions about calculating your HRA exemption. HRA Exemption When More Than 1 Family Member Pays Rent If you are the only one paying rent in your house, you are exempt from having to pay HRA. This exemption also applies if more than one family member pays rent for part of the year – they will be considered tenants and, therefore, liable to pay HRA. Make sure to keep all official documents, such as leases, receipts, etcetera, to prove this exemption is applicable. If you still need official documents, you can claim an exemption by proving that the other family members are not occupying the property full-time. [B-02] Conclusion In this comprehensive guide, we have explained everything you need to know about the HRA exemption. From the meaning of the exemption to the various ways to save tax using the HRA, you will be adequately equipped to claim your exemption and save tax as required. You can schedule an appointment with Piramal Finance professionals to clarify any doubts.

08-11-2023

Personal Loan

10 Useful tips to manage your car loan emi

Does your vehicle drive you up the wall regarding its EMIs? Let’s try to find a way to make this drive a smooth one. Vehicles have long since shed their luxury label and become a necessity. Financial planning before purchasing a car is critical for ensuring that the loan is properly acquired, EMIs are scheduled, and repayments are made over the loan’s duration. This will avoid hassles and debt. Digitalisation offers numerous options for managing your car loan. One such application is the car loan EMI calculator, which will guide you at the pre-purchase stage. While all this sounds easy on paper, let’s see how you can tackle your car loan EMIs. [B-01] Plan your purchase basis your lifestyle The prospect of owning a car can be both exciting and frightening. A fair assessment of your finances, savings, and spending pattern is a must. You can put together a list of all your loan commitments, and how it is impacting your monthly income. This will give you a sense of how much residual income is left for you to spend on the EMI of your dream car. Set aside a Budget Setting aside the money you are willing to allocate for this big buy helps you plan for the future. After deciding your monthly EMI commitment, you also need to decide the duration of this car loan. Here, the car loan EMI calculator assists you in determining your monthly payouts. This tool calculates an approximate EMI sum at current interest rates as well as different tenure options based on your allocated budget and car preference. The interest rate and the term of the loan are key factors that will impact your car loan journey. Research Lender options The Indian car market is booming today, with retailers offering a lot of interesting offers along with the vehicle, from easy repayment options to additional car accessories. The buyer stands to gain with multiple incentives being offered. Spend adequate time researching loans offered by several banks and NBFCs. To assist you in deciding the source of your loan, compare several offers and schemes after considering all value-adds. You can undertake this research easily through the online medium, and browse through relevant websites; most of these financial institutions have a car loan EMI calculator on their official websites to help speed up your decision. Choice of EMI scheme The EMI option you choose is directly proportional to the rate of interest and the duration of the loan. This means that a higher monthly EMI means a quicker closure of the loan, on the other hand, a longer tenure would mean paying more interest. Choose wisely, a shorter duration can help close the debt cycle faster as compared to a longer tenure. Pre-planning the loan schedule With the help of the car loan EMI calculator, you can decide your monthly payouts, and the spread of the loan duration, which helps you adjust the loan amount conveniently. The car loan EMI calculator helps you decide whether it is in your best interest to opt for a down payment along with applying for the car loan. Such planning with a car EMI calculator takes off your future worries without impacting your financial goals negatively. Timely payments You must honour your monthly payouts and try your best to avoid any defaults. This not only attracts a penalty but also impacts your creditworthiness. Multiple non-payments against your name will affect your future loan applications. Hence, always plan ahead and avoid defaulting on your EMI schedule. With a cellphone that is always handy, it is easy to set up reminders so as not to miss the EMI date. Tax Benefits You must take note that if you have taken the car loan for business purposes, you can claim a tax deduction against the interest paid. This will bring down your taxable income, thus resulting in savings. Furthermore, you can claim benefits on the depreciation of the car and other maintenance expenditures. To successfully make such claims, the car should be used for the purpose of running a business and registered in your name or the name of your enterprise. Pre-payment options When looking for a lender, always look for sources that allow you to make part payments on your car loan. This may be subject to some charges, find out what the cost of such pre-payments is. Additionally, you can also foreclose your loan before the tenure is over, this too will attract some charges from the loan provider. Make a note of all such expenses while making a decision on the car loan. Refinancing your car loan Sometimes you may be in a situation where you are unable to pay the loan as per your current agreement with your lender or lending institution. Worry not; you have the option to rework your loan terms to either rework the interest rate or extend the tenure, as may be the case. With the help of your lender, you can modify the loan agreement appropriately once you meet the eligibility criteria and get better commercial terms on the loan. Consolidating your loans Living in a day and age where we work tirelessly to fulfil most of our dreams in one lifetime, we do end up taking on several loans. In this scenario, keeping track of the EMI schedule of different loans such as personal, education, credit card, etc. becomes challenging. One way to efficiently manage your finances is to take out one major loan to pay off all the other pending loans. This loan may come with a lower interest rate and favourable payoff terms. This helps reduce your financial burden considerably. [B-02] Parting words Last but not the least, any loan is a debt until it is paid off, it is always in your best interest to try and minimize your expenses, make informed choices, and plan judiciously to avoid getting into a debt trap. To know more about car EMI calculators, loan applications, and managing your finances better, log on to https://www.piramalfinance.com.

08-11-2023