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Income tax return

10 Documents to Keep Ready to File Income Tax Returns

You may now already know how to file income tax returns by logging in to an approved return filing site. However, there is a chance that a mistake may occur when filing the taxes. It is usually safer and better to take care to prevent such errors. The most vital step to take before completing your tax returns is to ensure that you have quick access to all the needed papers. [B-01] What Exactly is an Income Tax Return? The Income Tax Return (ITR) is a paper used to submit data about your income and taxes to the Income Tax Department. Your tax due is computed depending on your income. You or a firm that makes any income over a fiscal year is compelled by law to file a tax return each year. The income might be in the form of a wage, firm earnings, income from real estate, dividends, equity profits, interest, and other forms. Tax returns must be submitted by a certain date. If you fail to meet the deadline, you must pay the penalty. Documents Needed for Income Tax Return Filing PAN Card It is the first and most vital need if you’re filing a tax return for income. Your identity on the wage tax PAN card should match the name on your ITR. Your PAN is vital for TDS deduction and must be connected to your account in the bank, enabling instant payment of income tax rebates (if any). The Office of Income Tax issues it, and a salaried worker may locate their ITR on their PAN card, Form 16, Form 26AS, Form 12BB, and so on. This will help you learn how to file a tax return with your PAN card. Aadhar Card You must submit your Aadhaar card information while filing returns. This is as per Section 139AA of the Income Tax Law. If you don’t have your Aadhaar card and have requested one, you must include the enrollment ID of your Aadhaar card in your income tax returns. Linking your PAN and Aadhar enables you to confirm your ITR digitally using an OTP. This helps you learn how to file a tax return with your Aadhaar card. Account Information The ITR requires the reporting of all open bank accounts. You must include bank account data, such as your bank’s name, IFSC, account number, and the number of accounts you own, in your income tax return. In addition, one account will be marked as the main account to aid the Income Tax Office in repaying your tax rebate by online transfer to that account. Bank information is utilized to examine your salary reports, high-volume payments, and so forth. These details are freely accessible via a bank passbook, statement, checkbook, net banking account, and so on. Form 16 This document holds data on your pay and the amount of TDS taken from you. Part A and Part B of Form 16 are distinct papers. Part-A covers data on the sum of tax taken by the firm throughout the fiscal year, as well as the employer’s PAN and TAN. Part B of the form contains TDS figures such as gross pay breakdown, exempt allowances, extra perks, and so forth. This will help you know how to file a tax return with Form 16. Form 26AS It’s an annual tax report, similar to a tax passbook, that contains data about all the charges you have submitted against your PAN. Among them are: TDS is collected by the bank. TDS is collected by your employer. TDS is collected by other companies from payments made by you. You have deposited advance taxes. Self-assessment taxation paid by you. You must ensure that all taxes deducted during the fiscal year are reported against the PAN on Form 26AS. If there is a disparity, you won’t be able to get the tax rebate for the TDS deduction. Hence, you must correct the mismatch by contacting the deductor. This is how to file a tax return with Form 26AS. House Loan Statement You get data such as principal and interest repaid in your loan report. This data is required as proof as well as when completing your ITR. If you have taken a house loan from any financial entity, you must get a record for the previous fiscal year. Data About Capital Gains You will have capital gains or losses if you sell shares, assets, or land. You will require paperwork such as broker records, property sale papers, and so forth. Instruments for Tax Savings If you have been involved in any tax-saving plans, such as tax-saving ELSS, FDs, investment receipts, and so on, you should have the proper documentation available when you submit your taxes. Rental Income If you make money from your home or land, you must show it when you file your insurance claim. Also, if you pay rent, remember to get records from your landlord. Although these papers are not required to be filed with the income tax return, they should be kept secure in case they are needed in the future. In the long run, this will help you understand how to file a tax return with your rental income. Foreign Income You must send papers for any income made in or from a foreign nation during a work deployment or any other portion of the year to your tax expert. Experts will assist you in claiming tax credits and DTAA (Double Tax Avoidance Agreement) benefits. You must obtain paperwork for any overseas income from the firm or vendor. [B-02] Conclusion The documents mentioned above are among the most commonly needed papers to file tax returns. You need to keep track of such papers. And, you must keep them secure throughout the fiscal year to ensure a seamless ITR filing procedure. If you want to learn more about how to file income tax returns, visit Piramal Finance and explore their products and services.
08-11-2023
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Personal Loan

How do I calculate daily interest on a loan?

It is a fact that when you take out a loan, you will have to pay that money back with interest. This is why you must pay a higher amount when returning the money. Generally, loans work on an interest basis that is calculated monthly or yearly. But, a daily interest loan works differently. A daily simple interest loan (DSI) is the type of loan on which interest is accrued daily. Although, in this type of loan, the lender calculates the interest only on the current unpaid principal, and the payment is divided between the interest owed and the principal balance. Every time you, as a borrower, pay back the money, the interest charges will be less than the previous payment. This is why it is always in your favour to calculate the daily interest on a loan beforehand. [B-01] The easy availability of lending mechanisms all across the country has rendered us unable to go into the depths of debt. But as an informed borrower, you should always check on several niche aspects of getting a loan, such as the daily interest you have to pay on your DSI type of loan. It is essential to do that because these things can affect your daily income, CIBIL score, and creditworthiness. They directly impact your capacity to borrow money in the future. How to calculate daily interest on a loan? It is an established principle of loan management that paying on time always increases your capacity to borrow in the future. Establishing goodwill with your lender always goes in your favour in the long term. But, apart from that, it is also crucial to pay back smartly. Let’s see how the daily interest loan works in that segment. Let’s take an example of a 24-month, ₹10,00,000 loan with an 8.5% interest rate per annum, which would mean the daily interest would be around ₹233 per day. ₹10,00,000 x (8.5% interest/365 days) = ₹232.87 R/o to ₹233. For 31 days, your interest will amount to ₹7223/ month. ₹233 x 31 = ₹7223. So, the day the first monthly payment of ₹41,666 is due, the amount of ₹7223 will go towards the interest of the loan, and the remaining ₹34,443 will go towards the primary balance. So the new principal balance will be ₹9,65,557/- One of the perks of having a daily interest loan is that if you make payments on time, the amount you owe goes down. Thus, the interest you will owe will decrease next time because the principal amount has been reduced. Let’s see how. Next month, you have 31 days. So, the daily interest on ₹9,65,557/- will be: ₹9,65,557/-x (8.5% interest/365) = ₹224.85 daily interest ₹224.85 daily interest x 31 days = ₹6971 monthly interest New principal balance: ₹9,58,586. Thus, the principal amount will continue to decrease every time you make the payment. How does this work? The payments you make will cover the interest you owe to the lender, directly reducing the principal amount each month. Thus, significantly and systematically reducing the burden each month. You will not be charged late fees because you will pay the amount on the due dates. This will be possible if you calculate the daily interest on a loan beforehand and know the amount you will owe each time. The interest you will be paying will reduce simultaneously, thus reducing your burden in that aspect. Additionally, your loan will be paid at the proper time, establishing a good credit score and helping you secure loans more quickly in the future. There are a few things to keep in mind while taking out a DSI 1. If you pay late for DSI, it is unfavourable for you. The reason is that when you make late payments, it will also mean that you will have to pay more interest even though your late payment is accepted during the grace period and you didn’t have to pay any late fees. Yet, the daily interest you are paying will keep increasing because the interest on this type of loan accrues daily. Plus, late payments reduce your CIBIL score. 2. Similarly, if you repay a substantial portion of the principal amount at one time because you come across some money. Then, you can calculate daily interest on a loan only on the remaining principal amount. For example – if you take a loan of ₹10,00,000/- and you pay back ₹5,00,000/- in a single payment, then the interest for the next month will be calculated only on ₹5,00,000/- and the original principal amount of ₹10,00,000/-. [B-02] Conclusion Taking out a DSI loan requires you to calculate the daily interest on the loan properly. You should always consider the monthly amount you will have to pay and substantiate it with the income you will accrue. Daily interest loans are among the best types of loans because of their benefits in terms of interest rate calculation. But you should always be disciplined in terms of repaying the money. Otherwise, it will be unfavourable for you. Nobody wants to pay high interest on their loans because it will affect their income. This is why daily-interest loans are the best. The daily interest loans that Piramal Finance gives are given at lower rates than the general market, which is to cater to every need of our customers.
08-11-2023
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Personal Loan

Everything you should know about loan against FD in India

A loan is an extended line of credit. There are many ways to secure a loan. Some loans are unsecured. They do not require an asset or collateral. Others are secured loans. Under these categories are different types of loans. Many people think that taking a secured loan means keeping your house or car as collateral. However, there is something called a fixed deposit. Many times, people take a loan against a fixed deposit. [B-01] What Does A Loan Against Fixed Deposit Mean? Loan against fixed deposit is a very convenient way to get money without having to sell any assets or pledge any property. The loan amount is determined by the fixed deposit amount. It’s a special kind of loan offered by banks to those who already have a fixed deposit account with them. A fixed deposit is a savings deposit where the account holder can place money for a specific period of time. Banks offer FDs to individuals and companies for a certain term, usually ranging from three months to five years. The interest rate on fixed deposits is higher than that of normal savings accounts and helps banks earn more money. When banks offer loans, their rates are typically two percentage points higher than the FD rate. If a depositor had purchased an FD at 7%, the interest rate on a loan secured by that FD would have been 9%. When a customer requests a loan against fixed deposit, banks keep their FD as the collateral. Since the FD is held as collateral, it makes for a secured loan. The interest rate for a secured loan is reduced because it is a secured loan. If the borrower is unable to repay the loan, the bank can simply procure it from the FD amount. This sum is typically settled at the time of maturity of the loan. Features/Benefits of Loan Against Fixed Deposit Lower Interest Rates: As your fixed deposit is security for a loan that is why the interest rates for these loans are lower. The rates of interest on these loans typically are lower than those for personal loans, ranging from 2 to 2.5 percent. Thus, the equated monthly instalments (EMIs) for these loans are lower as well. Minimal Documentation: The documentation needed to obtain a loan against your FD will be low because banks already have your information from when you opened your FD. You won’t be asked to provide any paperwork, such as your income tax returns (ITR) or any proof of income. No Credit Score Check: When you request a loan, lenders will review your credit score before granting you the loan. However, when determining your eligibility for a loan against FD, neither your credit score nor CIBIL will be taken into account. Therefore, these loans may be an excellent choice for those with poor or no credit scores. Loan Amount Depends On FD Amount: The maximum loan amount that you may be eligible for if you need to take out a personal loan depends on a number of factors, including your credit score, income, tenure, and FD amount. The maximum loan amount for a loan against a fixed deposit, however, would depend on the amount of money you have put into the FD account. This implies that you will be qualified for a greater loan amount if you have invested more money in your FD. No Penalty On Prepayment Of Loan: When you pay off a loan early, the bank loses out on the interest and therefore they penalize you for the same. However, no penalty is assessed in the case of a loan secured by an FD because the banks do not lose out on the interest amount. Instead, they benefit from it because they are not required to pay you any interest on the loan amount. Who is Eligible to Apply for a Loan Against FD? To get a loan against a fixed deposit, the basic requirement is to hold a fixed deposit with the bank/financial institution you’re seeking a loan from. However, you must also be one of the following: An Indian Resident Hindu undivided family Family trusts Sole proprietorships, partnership firms, and group companies Clubs, societies, and associations If you want to determine whether you can apply for a loan against fixed deposits, consider the points listed below: Holders of individual as well as joint fixed deposit accounts FD in a minor’s name is not acceptable. Owners of 5-year tax-saving FD accounts are not eligible for this sort of financing. Frequently Asked Questions (FAQs) What would happen if I am unable to make my EMI payments on the loan taken against my FD?If you don’t pay your EMIs on time, the bank will utilize the money in your FD to make up the difference in your loan payment. Can minors obtain a loan against FD?No. You must be at least 18 years old and have a valid fixed deposit in order to be eligible for a loan against one. Can senior citizens request a loan against FD?Yes. The facility of loan against FD is available to anyone who owns an FD account(except, in the case of a minor). What charges are associated with a loan against FD?There are no fees to pay, including the processing fee, to obtain the loan against FD. Interest is charged that is often up to 2% to 3% higher than the applicable FD interest rates. [B-02] Conclusion A loan against a fixed deposit account is a great way to receive financing without much hassle. In this type of loan, your fixed deposit investment acts as the collateral for the loan. Due to this reason, banks also feel safe in lending you funds because they can utilize the money in your FD in case of default in repayment. You are eligible to apply for a loan against FD even if your credit score is low or you do not meet the income eligibility criteria. If you need help in applying for a loan against FD or any other financial assistance, feel free to contact Piramal Finance.
08-11-2023
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How To?

How to Buy Unlisted Shares in India

The Securities and Exchange Board of India (SEBI) constantly monitors and regulates listed shares, giving them a safety label. Unlisted shares, on the other hand, provide enormous potential for exposure and growth but come with their own set of risks. Like you, countless people in India know the value and potential of unlisted shares but need help figuring out how to buy unlisted shares in India. Many early investors in unlisted companies lost money to con artists due to a lack of awareness and scams. Today’s environment, where fraud is widespread, makes it even more challenging to distinguish between real and bogus information. This article is for you if you're wondering where to buy unlisted shares in India, how to invest in unlisted companies, and can we buy unlisted shares safely? Let's break it down. What Are Unlisted Shares? Unlisted shares are any securities or financial instruments that are not traded on a recognized stock exchange like NSE or BSE. They are often referred to as over-the-counter (OTC) securities. Companies issuing these shares are typically smaller, newer, or may not meet certain listing requirements like minimum market capitalization, profitability, or listing fees. How to Buy Unlisted Shares in India? If you're wondering how to buy unlisted shares, here are the most common ways you can invest safely: 1. Invest in Pre-IPO Companies Through Trusted Intermediaries Companies in their pre-IPO stage issue shares that are not yet publicly traded. These can be bought through intermediaries who facilitate off-record transactions. The shares are directly credited to your Demat account even though the exchange is not involved. When choosing an intermediary, ensure they are SEBI-registered to reduce counterparty risks. 2. Buy Directly from Employees (ESOP Sales) Some start-up employees holding ESOPs (Employee Stock Option Plans) may be willing to sell their shares after the lock-in period. In India, certain brokers and platforms can help you connect with such employees. Always verify the legitimacy of the platform before purchasing. 3. Purchase Directly from Promoters via Private Placement You can buy shares through private placement, which involves negotiating directly with the company’s promoters. This method is usually for high-ticket investments. It is advisable to involve a SEBI-registered wealth manager or investment banker for due diligence and smoother transactions. 4. Invest Through PMS and AIF Schemes Investing in Unlisted Shares If you're looking for a more structured way to invest in unlisted companies, Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) offer professional portfolios that include unlisted shares. These are managed by SEBI-registered entities, ensuring better compliance, diversification, and risk management. Key benefits include: Risk spread across multiple investments. Professional management and due diligence. Dynamic portfolio adjustments as per market conditions. Where to Buy Unlisted Shares in India? If you are still wondering where to buy unlisted shares in India, here are some legitimate options: SEBI-registered intermediaries and brokers. Equity crowdfunding platforms (SEBI-compliant). Angel networks like Indian Angel Network, LetsVenture, etc. SEBI-registered PMS or AIF funds. Can We Buy Unlisted Shares? Is It Safe? Yes, you can buy unlisted shares, but remember: Unlisted shares are high-risk investments. Transactions must always happen through legitimate and SEBI-compliant channels. Stay away from unsolicited offers on WhatsApp, Telegram, or SMS. Always verify the intermediary's SEBI registration number. Risks of Investing in Unlisted Shares While the potential returns are high, some risks you should be aware of include: liquidity: Hard to find buyers or sellers. Capital Loss: High risk of losing your principal amount. No Dividends: Many unlisted companies do not distribute profits early. Dilution Risk: Your ownership may get diluted in future funding rounds. Key Considerations Before You Buy Unlisted Shares in India Always consult experienced investors or a SEBI-registered financial advisor. Do detailed research on the company or start-up you are investing in. Check for clean transaction history, no hidden charges, and direct Demat account transfers. Start small if you are a beginner and follow where institutional investors are investing. Key Takeaways Investing in unlisted shares is risky but rewarding if done carefully. Whether you choose to buy unlisted shares from employees, promoters, or invest via PMS/AIFs, always ensure transparency, regulatory compliance, and proper due diligence. Stay informed and continue reading such articles on Piramal Finance to learn more about how to invest in unlisted companies and buy unlisted shares safely in India.
08-11-2023
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Calculator

Compound Interest: Explained With Calculations and Examples

Compound interest is interest that builds up over some time. It impacts both the principal and the interest. It is used for broader aspects of finances. With the updates in the technical field, the finance sector is also keeping up with change. The CAGR calculator for easy and quick assessment of interest is now available. Below are the details about compound interest and the CAGR formula. Read on to learn more. [B-01] Explain About Compound Interest The interest paid on the principal and compounded from time to time is called compound interest. The interest is worked out regularly. When the initial debt amount and gathered interest are added, you get a new debt amount. The initial principal plus the interest already accrued make up the new principal. Compound Interest = Interest on Principal + Compounded Interest at Regular Intervals. Compound interest is calculated annually, semi-annually, quarterly, or even monthly. This is similar to how the interest that is funded gears up the growth of the debt amount over time. It is what money does due to compound interest. Banks/NBFCs use compound interest to compute the amount. The amount of compounded interest increases as the number of compounding periods. Consider it as a snowball. Your snowball will still get bigger the sooner you start saving and the additional money you put into it. Consider what would happen if you threw the snowball down a snow-covered slope. Now that you’ve packed additional snow, then that will remain, and you’ll continue to do so. Your snowball would ultimately include the snow you began with, the snow you collected over the years, and more snow on top of it when it touches the bottom of the hill. What Makes Compound Interest so Crucial? Your income rises more quickly due to compound interest. Since you will receive returns on both the money you invest and returns after each compounding period, it causes a sum of money to increase more quickly than with simple interest. As a result, you won’t need to save as much money to achieve your objectives. When wealth accumulation, the power of compounding can be crucial. The earlier you start saving money in an interest-bearing account, the more compound interest you can earn. It’s essential for assisting in the mitigation of wealth-depleting causes, including rising living expenses, inflation, and declining buying power. How to Calculate Compound Interest? The interest gathered on both the principal and interest is compound interest. The initial and subsequent debt amount rises with the addition of the interest earned at each period. To calculate compound interest, use the following method: Step 1: Take note of the given principal, rate, and time. Step 2: Use the formula to assess the amount- A = P(1 + r/100)n. Step 3: Using the equation CI = Amount – Principal to assess the compound interest. The interest is calculated for the new principal at regular intervals when the accrued interest is added to the current principal. You get the final amount when the initial amount and interest are added. Compound Interest = Interest on Principal + Compounded Interest at regular intervals. Explain Compound Interest Formula Calculations for compound interest can be done annually, biannually, quarterly, or even weekly. This is comparable to how reinvested interest on a single investment speeds up the principal’s growth over time. Money behaves in this way when interest is compounded. Banks and other financial institutions only calculate the amount using compound interest. I = P( 1 + r/n) tn – 1 where I = Interest amount. P = Principal amount. r = Interest rate. t = Time. n = Number of times the interest is compounded in a year. How Can a CAGR Calculator Help You? The CAGR calculator can reveal several aspects of your firm that are not known. In contrast to the idea of “absolute returns,” growth based on CAGR considers the factor of time. Therefore, it provides a better picture of growth over time. The CAGR calculator is a fictional number. In its simplest basic form, it gives the precise growth rate of an investment when returns are funded again. It also assesses the investment up/down at the same rate. CAGR is useful while making decisions on where to invest and how much to invest. You may calculate your annualised true returns on investment using a CAGR calculator. This way, using the CAGR calculator online, which is free, saves you time and effort. What are the Methods of CAGR? A PV of Rs. 1 lakh initial funding in a firm. The CAGR is as follows if the entire investment has increased to Rs 10 Lakh (FV) after 5 years (N): (10,00,000/1,00,000)1 / 5 – 1 or 0.589 Thus, the CAGR percentage is CAGR x 100 or 58.9% How to Use the CAGR Calculator? A straightforward online calculator, CAGR is incredibly precise and simple to use. This technology provides immediate results owing to user inputs. It determines two types of ROI: Absolute returns and Compound Annual Growth Rate (CAGR) You need to put three values to get the desired result from an online CAGR calculator: Funding Amount – Your total funding amount. Amount at the end of the period – total maturity value. Time Period – overall time of total funding (in years). After entering the required information, click “Calculate” to check your fundings’ absolute returns or CAGR. The CAGR calculator assesses the overall gains. It also gives CAGR or Absolute Returns based on the above information (%). You will also see a growth chart of your funds. [B-02] Conclusion Compound interest is the type of Interest calculated on a loan or deposit amount. It considers both the debt amount and Interest earned. Compound interest differs from simple Interest. The earlier one considers the debt amount and any interest that has built up. Whereas simple Interest only takes the principal amount. Now you’ve all the required information regarding compound interest. For more details, you must visit Piramal Finance. They have many articles and blogs to help you learn about various interest types.
08-11-2023
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Other

Everything you need to know about EMI and how to calculate it

Well, what is EMI? Equated Monthly Instalments (EMIs) are monthly payments made toward a loan. The principal and the interest are the two parts of an EMI. The loan’s principal is subtracted from the amount you borrow. Lenders require interest payments because they incur expenses while making loans. The original principal and the remaining principal balance are subject to this interest charge. What is Loan EMI Calculation? Let’s start with a basic definition of EMI. Equated Monthly Installment (EMI) refers to payments equal to each month. The terms “equal in value,” “monthly,” and “instalment” all refer to the frequency at which payment is expected. The phrase “Equated Monthly Installment” (EMI) refers to the fixed monthly payment that a borrower makes to a lender over a certain period. The monthly instalment is determined by the loan amount, term, and interest rate. The number of loan EMIs and the number of payments are inversely related. [B-02] EMI Interest Rate Interest rates are another major component in determining the magnitude of EMIs. Rates of interest are variable from one creditor to the next. The market circumstances at the time of the loan are considered, along with the borrower’s ability to repay the loan based on their income, savings, and credit history. Interest rate selection is a significant factor. When it comes to the many forms of interest, there are: Reducing Rate The reducing rate decreases as the principal is repaid. Interest is computed on the total outstanding balance, and the interest rate decreases as the principal balance decreases. Floating Rates Interest rates, loan terms, and monthly instalments on “floating” loans are all subject to change based on factors like the national economy. The Reserve Bank of India (RBI) executes interest rate modifications once every three months. Using a floating rate is OK if the base rate is not altered. Of course, they can also be erratic at times. They should be avoided at all costs. Fixed Interest Rates Loans with fixed interest rates have their interest rate and term determined at the time of borrowing the money, and they do not fluctuate over the loan’s duration. Fixed interest rates often run 1-2% higher than those that are variable. This is the method of choice because it provides a ballpark estimate of the monthly instalment fee. Progressive EMI Progressive EMIs are EMIs where the payment amount rises after a certain amount of time. This facilitates a quicker payoff of the debt. No Cost EMI It’s remarkable how quickly a sale may be converted on an e-commerce website or app by mentioning no-cost EMIs. You may now use your credit or debit card to make a purchase using the No Interest EMI options. It would be a shock to hear that the RBI regulations do not allow for interest-free or zero-interest monthly payments (EMI). These EMIs often have substantially higher interest rates than the alternatives. A substantial processing charge is added to the EMIs or the reduced amount on the MRP is included. The ‘no cost’ assertion is, at best, misleading. Equated Monthly Installment (EMI): How Does It Operate? Two methods exist for determining the EMI. The items in question are: Flat Rate Method This calculation approach includes the principal and interest accrued on the principal in the final total. This figure is multiplied by 12 since that is how many months there are in a year after dividing the total by the loan’s maturity date. Payment Plan with a Flat Rate EMI Let’s pretend you’ve gotten a mortgage for 10, 00,000 (the principal loan amount) at an interest rate of 8% for 10 years. The following is the formula for determining your EMI based on the flat rate method: (₹10, 00,000 + (₹10, 00,000 x 10 x 0.08)) / (10 x 12) The monthly instalment is 15,000. Reducing Balance Method Using the reducing balance approach, EMI may be computed with the following formula: (P x I) x ((1 + r)n)/ (t x ((1 + r)n)- 1) This is an example expression using P, I, r, n, and t, where P is the loan principal, I is the yearly interest rate, r is the periodic monthly interest rate, n is the total number of monthly payments, and t is the number of months in a year. Reduced-Balance Example EMI Using the same example, the EMI may be computed using the reducing balance approach. ((₹10, 00,000 x (0.08)) x (1 + (0.08 / 12)) 120) / (12 x (1 + (0.08/12)) 120 – 1). There will be a monthly payment of 12,133. The declining balance technique of calculating EMIs results in less payment than the flat rate approach. While calculating the EMI flat rate, the loan’s principal is kept at a fixed amount for the duration of the loan. Alternatively, the declining balance technique uses the monthly principal reduction to determine the EMI. This indicates that paying down the debt can save borrowers money. Bottomline You can now say, “It’s so easy!” It would be best if you now had a firm grasp on what an EMI is, what goes into an EMI, and how to calculate an EMI for a loan using Excel and a web-based calculator. You should also be aware that the EMI amount may change even if the underlying circumstances remain the same. Possible causes include the use of a flat-rate or reducing-balance system of computation. With this information, you can confidently compare EMI plans and select the one that best suits your financial situation.
08-11-2023
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FD

How do Banks Calculate Interest on Savings accounts & FD in India in 2022?

Interest on savings accounts and fixed deposits is an important aspect of banking. Different factors go into calculating interest on a savings account. Banks use different metrics to calculate the interest that you will earn. The Indian banking system has undergone many changes in the past few years. The introduction of a savings interest calculator has made it easier for customers to understand how banks calculate interest on savings accounts and fixed deposits in India in 2022. [B-01] Before that, what are savings accounts and FDs? Savings accounts and fixed deposits are two of the most popular financial instruments in India. Savings accounts allow individuals to deposit and withdraw funds. They can do so regularly and earn a small interest rate. Fixed deposits are a type of time deposit. These accounts pay a higher interest rate than a traditional savings account. However, they require a minimum deposit. And the funds must remain in the account for a specific period. Both savings accounts and fixed deposits are considered safe investments. This is because it is the government of India that insures them. How do banks calculate interest on savings accounts and FDs? The interest rate on savings accounts and FDs in India will depend on the bank and the type of account you choose. Generally, the interest rate on savings accounts is lower than that on FDs. In India, banks calculate the interest rate on savings accounts and FDs daily. Generally, the interest rate is calculated as the base rate plus the applicable rate of interest. The base rate is determined by the Reserve Bank of India (RBI). For savings accounts, the interest rate is calculated based on the daily balance maintained in the account. Banks usually pay interest on a quarterly basis. And the interest rate is usually lower than that of FDs. In the case of savings accounts, the Reserve Bank of India rolled out certain guidelines in 2010. According to these guidelines, the interest on a savings bank account is calculated as follows: Interest of savings account = Daily balance Rate of interest (number of days/365) For FDs, banks usually offer a fixed rate of interest. It is applicable for the duration of the deposit. The interest is calculated based on the amount deposited and the tenure of the deposit. Banks usually pay interest on a monthly, quarterly, or annual basis. The interest on FDs is calculated as follows: Interest = Principal Rate of Interest Time Period / 100 What is a savings interest calculator, and how is it helpful? Banks also tend to use a savings interest calculator. They use it to calculate the interest rate on savings accounts and FDs. A savings interest calculator is a tool that helps banks calculate the amount of interest. This tool is beneficial for both the banks and their customers. For banks, the savings interest calculator helps decide how much interest they can offer their customers. This helps them set competitive rates. So, they attract more customers and increase their profits. For customers, the savings interest calculator can help them compare the different rates offered by banks. It can also help you choose the best option for your needs. By using the calculator, you can find out how much you can earn in interest on your account over a given period of time. How is a savings interest calculator used by banks? Banks use a savings interest calculator to calculate the interest earned on savings accounts and FDs. The savings interest calculator considers: Money deposited Duration for which the money will remain in the account Interest rate Based on these factors, the savings interest calculator will provide an estimate of the total interest earned. It will also give an overview of the amount of money to be received at maturity. What are the benefits of using a savings interest calculator to compute the interests on savings and FD accounts? When you use a savings interest calculator, you can enjoy several advantages during the calculation of interest on your account. These include: Provides an accurate estimate of the total interest earned on a savings account or FD A savings interest calculator can quickly calculate the amount of interest earned. You will earn them on your savings account or fixed deposit. This can help you determine if you have the right type of account. Also, if the interest rate is competitive. Allows you to compare different savings accounts and FDs A savings interest calculator allows you to compare different savings accounts and fixed deposits. Therefore, you can make an informed decision. It helps to understand where to invest your money. Helps you plan for future goals A savings interest calculator can help you plan for future goals. It will allow you to project how much interest you will earn on your savings over time. This can help you decide how much to save each month. It will help you reach your financial goals. Provides a visual representation of your savings growth A savings interest calculator can help you know how your savings will grow over time. This can help determine if you are on track. [B-02] Final Word Banks are now adopting new techniques. They are making use of a savings interest calculator for their customers. They are also using data-driven insights. And they are using it to calculate the interest rates on savings accounts and FDs. Banks aim to provide customers with the best rates possible. They are doing so while ensuring the deposited funds are secure and efficient. The importance of calculating the interest on savings accounts and FDs in India in 2022 cannot be overstated. Interest rates are likely to rise as the economy recovers. Therefore, calculating the right interest rate is essential to maximising your savings. It can also help you avoid losses due to unfavourable interest rates. By calculating interest, you can also ensure that your money is invested in the most profitable manner. This will also help you achieve your financial goals. For more information on calculating interest rates on your accounts, visit Piramal Finance.
08-11-2023
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Tax Savings

How to choose the best tax saving plan under the old tax regime

A significant chunk of India’s revenues comes from taxes, be it individual or corporate. During the tax season, all taxpayers look for different ways to save and avoid taxes. The Government of India introduced a new tax regime in 2020 for the Financial Year 2020-2021. From the new Financial Year 2020-2021, taxpayers can choose from the old or new tax regimes. There were a lot of significant changes in the new regime like almost zero deductions and lower tax rates. Mentioned below is the comparison of the old regime vs the new regime of taxes. [B-01] Old Tax Regime vs New Tax Regime As mentioned above, the new tax regime offers lower interest rates but no deductions or exemptions. It also offers more tax slabs. The old tax regime allows deductions or exemptions based on certain investments like ELSS (Equity Linked Saving Scheme), PPF( Public Provident Fund), NPF(National Pension Scheme) etc., under section 80C, which is quite a famous Income Tax Act. There were 70 tax exemptions in the old scheme, which are no longer a part of the new tax regime. The New Tax Regime has periods of lock-in for investments under section 80C. These include three-year lock-in periods for ELSS investments. It also includes withdrawing one’s Employee Provident Fund or EPF, Voluntary Provident Fund or VPF after retirement. Keep in mind that this choice is only for salaried individuals or HUF. Those earning an income from their business cannot make a choice. Individuals who have income from business cannot always make this choice. They have only one chance to switch and go back to the old regime. Benefits of the Old Regime While choosing the new regime, you let go of certain exemptions that the old taxation regime came with. Here are a few examples: Children’s education or marriage: The old tax regime offered deductions on children’s tuition fees and other investments for the same purpose. It also offered deductions on the interest on loans taken for a similar matter. Life Insurance: Almost all individuals these days have life insurance. Under the old regime, the premium on life insurance could be claimed for deduction. Medical Insurance: Under section 80D, up to Rs. 25000 premium paid for self or family is tax-free. This acts as a motivation factor, too, for people to buy insurance because they will have some exemptions from the Income Tax department. Home Loan Interest: Interest paid on a home loan is eligible for a tax deduction. Under the old tax regime, even the principal amount was eligible for tax deductions. Financial investments: Under section 80C of the Income Tax Act, certain financial investments are eligible for a tax deduction. How to choose the best tax saving plan under the old tax regime? While deciding which one is the best tax saving scheme to choose, one must be clear about the investment objectives. The decision must be made after a thorough weightage of pros and cons. This is because often, when people decide what the best tax saving plan to buy is, they make a mistake by selecting the plans which allow a lot of deductions but do not yield enough returns or do not fit in the requirements of the individual’s saving or investing objectives. Hence one must be very clear and careful while choosing the best tax-saving plan under the old tax regime. Following are a few of the best tax saving schemes under the old regime: ELSS: Equity Linked Saving Schemes or ELSS funds are said to generate high returns. However, these risks need to be perceived as calculated risks and should be taken only per a person’s risk appetite. ELSS funds require a lock-in period of 3 years only. You can use the S.I.P. or Systematic Investment Planning option to get the most satisfactory results instead of the lump sum. It is also highly advisable to invest for the long term instead of a short period for two reasons: this generates or yields better returns, and the risk is less. PPF: Public Provident Fund or PPF offers tax-free fixed guaranteed returns. That is not the only reason why this product is so famous. PPF is considered to be one of the safest investment options. It is highly recommended as an investment option if your goal is retirement, children’s education, or marriage. NPS: National Pension Scheme or NPS helps you generate a pension during your golden years. With its tax deductions under section 80 CCD, NPS comes highly recommended. ULIP: Unit Linked Insurance Plans, or ULIP, are a favourite among salaried individuals as a tax-saving investment option. They are sold by life insurance companies and come under section 80C and tax-free benefits under section 10(10d). ULIP has a minimum lock-in period of 5 years, and withdrawal before maturity attracts charges. The plus point of ULIP is that it offers death benefits and professional fund management. Life Insurance: They offer the lowest returns compared to other products under the 80C umbrella. Risk in these plans is also the lowest, not to mention the benefits of the life insurance policy. [B-02] Conclusion As experts suggest, you have various categories to factorise before deciding to go with the new or old tax regime. You will benefit more from the old tax regime if your income increases. The old tax regime gave investors a sense of freedom with various options eligible for deductions and exemptions. The new tax regime is mainly made for Gen Z or for those whose careers have just taken off. Income tax calculators are available online that help you compare which is beneficial for you. With the help of consultation, you can derive many benefits from the old tax regime. Read more such articles on the Piramal website.
08-11-2023
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How To?

How to Check Bank Balance Without Going to the Bank?

Modern technology has made many tasks that used to be tedious and labour-intensive much simpler. Getting cash and handling financial transactions no longer need you to physically visit a bank. With the push of a button, you can see how much money you have in the bank and put money into it. Since you make several purchases and withdrawals, monitor your money closely. If you check your bank account often, you may catch any fraudulent activity or mistakes early. The balance of a bank account may be checked in various ways, including by email, alerts, SMS, online banking, UPI, and many more. [B-01] Simple Method to Check Bank Balance Keep the following in mind while you check your bank balance: Make sure the bank has your cell phone number on file before proceeding. Sending and receiving text messages (SMS) and making phone calls need a valid cell phone number. Make use of a portable device. This is because banking and UPI applications are available to everyone with an internet connection. It’s also important that your checking account is associated with your debit or ATM card. You can use online banking to check your balance. Use ATM A bank’s website is not the only way to check the bank balance. After entering your debit card or ATM card into an ATM, you may follow the on-screen instructions. Using an ATM affiliated with or owned by your bank would be helpful. Fees are incurred at most other ATMs whether or not money is withdrawn. If you use an ATM outside of the country, your bank may charge you more fees. Text Messages Sending a text message is one of the simplest ways to check your bank balance. Most banks offer this service to their account holders. Once a bank starts to offer this service, you can ask for a quick update on your balance whenever you want. You will get a text message with your account balance. Message alerts should be part of the default setting. Any time money goes in or out of your account; you can expect to be notified quickly. Utilising a Call-Back-Service A missed call and text message must be sent to the given number. This service should be activated with your bank. Making a Call to the Bank Call your bank to check your balance if you like to use a conventional technique. A human person may only be available during certain hours. However, many banks have automated systems that provide financial information around the clock. Adjusting to such systems may need some time (you may need to establish a PIN, among other things). But once you get going, it will flow effortlessly. Simply by Setting Up Notifications Rather than repeatedly monitoring your account balances, you may have the bank notify you of any changes by email. If your bank account balance goes below a limit or a large withdrawal is made, you may set up alerts to be sent to you through text message or email. You may alter both the monetary amounts that apply and your reaction to them. You can be certain that your bank account is secure regardless of whether or not you have notifications set up. Current Account Balance Remember the format of the number when you check your bank balance. When you check your bank account online or using the bank’s mobile app, you may see your current balance and your available credit (the amount you might take and spend). The Benefits of Checking Your Account Balance Over the Phone Among the many benefits of check bank balance on your phone are the following: You may check bank balance at any time, regardless of where you happen to be. It’s a skill that can be used almost everywhere on the planet. There is no time limit on this. 24/7 access to toll-free lines and missed call services. You can avoid wasting time and energy driving to the bank only to check your balance. It’s a practical approach to verifying one’s account balance. This service is restricted to customers whose mobile phone numbers are already on file with the financial institution. Because of this, an outside party will require your help to understand your financial standing. Online Balance Enquiry An online balance inquiry is simple to complete. However, before conducting any online banking transactions, you should keep the following in mind: Your cellphone number must be registered with the bank. You can use it to send and receive important account-related SMS messages. When opening an account, you will get login credentials that you can use for net banking. The majority of banks have apps to assist their customers. Download the mobile app from your bank if one exists so you can access account-related details anytime. You may check bank balance online by using UPI app. Any UPI app you use is connected to your bank account to simplify online payments. You just need to select the account balance option to get the account balance on your device. Apply for a debit card for your bank account right away. Your debit card could be used to check your balance at ATMs. [B-02] Conclusion In today’s digital era, you can do many tasks in a fraction of the time and with far less work than in the past. Online banking and money transfers are only two examples. Deposits, account balance checks, and money transfers are just some of the many financial operations performed with a single mouse click. Many transactions each day need active monitoring of account balances. Those that check their accounts often are the first to learn of any issues or frauds. You now have access to all the tools you need to check bank balance. To better understand, you must read the blogs and articles on Piramal Finance.
08-11-2023
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