More articles for you

Your one stop place for everything related to finance and lending

Tax Savings

List down the Tax Benefits on NPS Investments

The NPS was established to ensure federal and state government retirees continued to receive a steady stream of funds after they ceased working. Currently, anyone, not just paid company employees, can join the NPS. Let’s learn more about the tax benefits on NPS. [B-01] Taxes and Benefits of the NPS’s Tier I Account Since a tier-I account in the new pension system is not designed to be accessed before retirement and is used to provide benefits to the investor afterward, the investor is entitled to some tax benefits on NPS. However, Tier-II accounts do not permit withdrawals and do not provide tax advantages; the NPS calculator may be used to get a rough approximation of your program balance. Who is Eligible for the NPS and How to Join The NPS is unique among retirement plans in that it is open to citizens of India and those legally considered to be NRIs. However, the applicant must be between 18 and 60 years old. Subscribers must also complete the “Know Your Customer” paperwork with the standard registration papers (CS-S1 and CS-S2). What is Article 80 of the CCD at first glance? Under Section 80CCE of the Income Tax Act, contributors to a Tier 1 NPS account may deduct contributions of up to Rs. 1.5 lakh from their taxable income. Because the “All Citizens” model of NPS relies only on voluntary contributions from its members, contributors are not restricted in their ability to put in as much as the Rs. 1.5 million annual caps set under Section 80C. However, the benefits of self-investment in NPS are limited in the corporate model and the government NPS in the following ways. To everybody who has subscribed to the corporate NPS model: Under Section 80 CCE of the Income Tax Act, 1961, an individual may get a tax deduction of up to 10% of salary (Basic + Dearness Allowance), up to a maximum of Rs. 1.5 lakh. Subscribers in the public sector NPS: Government workers who contribute to an NPS Tier 1 account get a tax break. Starting on April 1, 2019, the maximum amount of tax benefits on NPS available to state government workers is 10% of salary (basic + Dearness Allowance), while the maximum amount available to central government employees is 14% of pay (basic + Dearness Allowance). For this tax deduction, which is provided under Section 80 CCD of the Income Tax Act, the annual Rs. 1.5 lakh ceiling established by the Act is in effect (2). What is Section 80 CCD (1B)? For NPS Tier 1 account contributions made by retail subscribers, Section 80C of the Income Tax Act of 1961 allows for an NPS deduction of up to Rs. 50,000 every financial year. That’s on top of the Rs. 1.5 million ceilings imposed under Section 80 C. These two subsections make up the well-known Section 80C of the Income Tax Act, and together they provide for a total of Rs. 2 lakh in tax benefits on NPS within a fiscal year. Investing in a Tier 2 NPS Account Has Tax Advantages Payments to Tier 1 of the NPS are tax-deductible for all members, but Tier 2 contributions are deductible exclusively for members of the Central Government NPS. This NPS tax advantage is now available to central government workers under Section 80C of the Income Tax Act of 1961. Within Section 80C, the maximum allowable annual tax savings in this situation is Rs. 1.5 lakh. These investments are subject to a three-year lock-in term under current law. The Tax Benefits of the NPS for Employer Contributions Employer contributions to NPS accounts are advantageous only for those who enrol under the corporate model or the government NPS. Under both of these programs, the tax benefits on NPS are limited to contributions made by an employer in tier 1 accounts. Tax relief for employer contributions is available over and above the Rs. 1.5 lakh limit for individual contributions under Section 80C. Following is a list of the maximum tax breaks for employer contributions to an NPS: Corporate NPS models provide tax advantages for employer contributions. Under the corporate NPS model, an extra tax deduction of up to 10% of the employee’s salary (Basic + Dearness Allowance) is available for employer contributions to the NPS Tier 1 account. The Rs. 1.5 lakh cap on Section 80 CCE deductions is exceeded by this amount (2). Government National Pension System Employer Contributions Are Tax Deductible Employer donations to the Government NPS for state and federal workers may qualify for NPS TAX exemptions. Under current NPS legislation, employers of state government workers are permitted to contribute up to 10% of their employee’s wages (Basic + Dearness Allowance) as shown on their pay stubs. NPS Annuity Purchases and Withdrawals May Qualify for Tax Breaks The tax advantages of the current NPS go beyond donations. Numerous large tax incentives exist for withdrawing any amount or purchasing an annuity from the NPS. Here are some other details provided by the National Pension System: Partial withdrawals from an NPS provide tax benefits. There are limitations and restrictions on how often and how much money may be withdrawn from your NPS Tier 1 account; however, you can take out a portion of your money three times during the investment’s lifetime. According to Section 10(12B) of the Income Tax Act, subscribers may withdraw up to 25% of their self-contribution from their NPS without paying taxes. Annuity buyers might get a tax break in retirement. At least 40% of the NPS Tier 1 account balance must be used for annuity purchases under current legislation. Under Section 80 CCD (5) of the Income Tax Act, annuities purchased in retirement via NPS are not subject to taxation. However, the money received from an annuity is subject to taxation at the individual’s or couple’s standard income tax rate. [B-02] Conclusion: The NPS was set up to provide federal and state pensioners with a steady stream of payments even after they had stopped working. Previously restricted to full-time salaried staff, NPS is now open to all members of the public; both employees and freelancers fall under this category. For more information about NPS, visit Piramal Housing Finance.
08-11-2023
Read More
Personal Loan

Paying Off Personal Loan instant- All You Need to Know About

Do you ever consider how to close a personal loan instant? Does it always make sense to pay off a personal loan instantly? Not necessarily—there are other aspects to consider before making a decision. If you owe money on a personal loan and can pay it off instantly, it could lower your interest costs and improve your credit score. To avoid prepayment penalties, be sure your lender does not impose only pay off a loan instantly if you can do so within your budget. [B-01] This is the place to be if you’re considering how to close a personal loan instant. This article explains all the procedures needed for personal loan documents list pdf! Is closing a personal loan instantly possible? How to close personal loans instant personal loans can be repaid instantly, but you may not want to. Making extra payments or placing a cash windfall toward your loans could shorten your repayment duration. Few lenders may levy a prepayment charge. The prepayment charges may be a percentage of your loan total or how much interest the lender would lose if you repay instantly. Prepayment penalties are mentioned in your loan agreement and vary by lender. Can you close a personal loan instant? Yes, borrowers can often repay personal loans instantly. Instant repayment fees vary by lender. It’s charged up to 2% of the loan’s total if repaid within the first year. In succeeding years, the charges decrease. When should I close a personal loan? Prepaying for a loan requires extra savings. It’s best to invest additional cash. Instead of paying a long-term financial commitment in one go, the sum can grow over time, especially if there’s a prepayment charge. Calculating Personal Loan instant Repayment How to close personal loans instant repayment affects financial commitments. Knowing how much you’ll have to spend to repay it instantly is crucial. The best way to complete a personal loan now by calculating personal loan repayment is with an IIFL calculator. ● Use the loan calculator to enter the loan amount, term, interest rate, and prepayment amount. ● After entering these facts, you’ll see your new financial obligations and prepayment charges. How does instant loan repayment affect credit score? When you pay down your credit card balance, you lower your debt-to-credit-limit ratio. This reduces your utilisation rate, which accounts for 30 per cent of your credit score, boosting it. So why not with a personal loan? Personal loans are instalment debt; therefore, Experian says they’re different. Credit card debt is revolving, so there’s no defined repayment period, and you can borrow more as you pay. Instalment debt involves repayment in equal monthly instalments over a particular term. After refund, the account is closed. Personal loans contribute to your credit report’s open accounts. The loan can boost your credit mix by 10% of your FICO score. When you pay off an instalment loan, it’s considered a closed account. Once you pay off your loan, you’ll have fewer open accounts on your credit record, improving your FICO score. Your credit report will show a shorter account lifespan if you instantly pay off the personal loan. Your average account age determines 15% of your FICO score. A more extended credit history equals a better credit score. Paying off a personal loan instantly will reduce your credit history and score. Your credit profile will determine how much your score changes. Low credit can make it hard to secure an apartment, financial goods, or a job. Sound financial practices, such as on-time payments and avoiding too many new lines of credit, can increase your score. Personal loan documents list pdf ● ID Required: Passport, Driver’s License, State Issued Photo ID, or Permanent Account Number (PAN) Card (any one) ● Evidence of Residency: Any of the following Passport; Current Utility Bill; or Leave and License Agreement (not older than three months) (anyone). ● Bank Statements from the Past Three Months (showing where pay and other income have been deposited). ● The past three months’ worth of pay stubs. ● Two pictures, passport size each. Pros of closing personal loan instant Reducing debt and keeping it reasonable are keys to good credit and financial health. Instant loan repayment provides all that and more. 1. Interest savings. Interest costs less the faster you pay off a loan. Because that reduces your total borrowing cost, you could save a lot. 2. Your monthly budget will increase. Without that monthly payment, you’ll have more budget space. You can use that money for day-to-day costs or save for emergencies, retirement, or investments. 3. You’ll reduce debt-to-income. Lenders evaluate your debt-to-income ratio to make lending decisions. By lowering your debt-to-income ratio, you may improve your credit score and qualify for better loan terms. 4. Peace of mind Paying off a loan faster reduces monthly financial stress. Before deciding, check that you can pay your monthly bills and have emergency savings. Don’t tap your savings or retirement accounts, as they could save you more. Cons of closing personal loan instant It can save interest, put money in your pocket, and reduce debt, but there are disadvantages. Consider these three impacts. 1. Prepayment charges. Some lenders include a prepayment charges clause in loan contracts to recuperate lost interest. This is a proportion of the unpaid loan principal at payback. Before deciding, check loan documentation and perform the maths. Prepayment charges could diminish or cancel your interest savings, especially if your loan has a low, fixed-rate or short duration. 2. You may lose credit. Your credit mix and history change as you repay a personal loan, which may affect your credit goals. A personal loan is reported as an instalment account, including the loan amount and payback schedule. Since payment history is the main component in determining your credit score, on-time monthly payments benefit your finances long-term. You could lose months (or years) of a positive payment history if you pay off your loans instantly. Age of accounts and a well-managed mix of credit (credit cards, school loans, auto loans) also affect your score. Paying off a personal loan instantly may temporarily lower your credit score. 3. You may have better money options. If your loan interest rate is lower than other debts, you may be better off elsewhere. Instead of paying off your loan instantly, focus on paying off higher-interest debt, such as a credit card amount. Consider increasing your work retirement plan contribution to qualify for an employer match or opening a high-yield savings account. Before changing your monthly payments or paying off a personal loan instantly, check your bank accounts to be sure you can afford monthly costs and emergencies. Future planning can reduce stress. [B-02] Conclusion This article’s goal is to thoroughly analyse crucial considerations of how to close personal loans instantly. Personal loans are a quick and reasonable solution to pay a significant bill and enhance your credit. As with any financial tool, you should carefully assess if a personal loan is right for you. Paying off the loan instantly can result in prepayment charges, negating interest savings and hurting your credit. If you wish to pay off the loan instantly, apply to a lender who won’t charge a prepayment charge. Before signing up for a new financial instrument, check the personal loan documents list pdf etc. do your research correctly. Investment Reliable does not offer financial advice, but we provide unbiased information and evaluations on trading, investing, and finance. Users ought to always carry out their research. Also, visit Piramal Finance has more in-depth educational articles.
08-11-2023
Read More
Tax

Learn About Taxation on Mutual Fund

If you now invest in or are considering investing in the taxation of mutual funds, you should be aware of the laws dictating how your returns will be taxed. Gains and income from mutual funds are taxable, just like those from other asset types. Since taxes cannot be avoided, it’s important to learn how they are applied to mutual funds before putting money into them. [B-01] The main factors influencing the taxation of mutual funds in India are: The taxation of mutual funds is a complicated topic, but examining it in parts may make it more manageable. Therefore, let’s start with the three variables influencing how taxes are applied to mutual funds. Finance Options: For monetary purposes, a mutual fund can be categorised as either an equity or debt taxation of the mutual fund. Gain classification: A capital gain occurs when an investor sells an asset for more than they paid for it, while a dividend is a portion of earnings delivered to investors by the mutual fund firm without the investor having to sell the asset. Following this part, we will go through what they are and how they are taxed. Involuntary self-detention: How long you keep an investment is a key factor in calculating your capital gains tax. Holding onto your investments for longer can help you pay less in taxes. According to the country’s income tax code, investing with a longer time horizon results in a lesser tax liability. How do mutual funds make money? Taxation of mutual funds offers the potential for profit through both capital appreciation and dividends. Let’s break down the distinctions and clarify what each term means. Earning more than what an asset was originally purchased for is considered a capital gain. If you own units in a mutual fund scheme and pay a NAV of 140 per unit, you will earn a capital gain if and when you sell them for more than 140. Please remember that mutual fund units only generate capital gains upon redemption. Therefore, investors only have to pay capital gains tax on mutual funds when cashing out their holdings. Therefore, the taxation of mutual funds redemption must be included in the income tax returns for the subsequent fiscal year. Taxes on dividends The Dividend Distribution Tax was repealed by the Finance Act of 2020. Investors only had to report dividend income from mutual funds after March 31, 2020. Before sending dividends to the taxation of mutual fund shareholders, fund houses deducted the Dividend Distribution Tax (DDT). The investor must now report all dividend income as “income from other sources” and pay taxes on the full amount according to their tax rate. Tax on Capital Gains The type of taxation of the mutual funds scheme you have invested in and the time you have held its units will affect the taxation of capital gains from those schemes. Keeping that in mind, let’s examine these two parts more closely. The terms “long-term capital gains” (LTCG) and “short-term capital gains” (STCG) need to be defined before proceeding (STCG). The difference between short-term capital gain (STCG) and long-term capital gain (LTCG) is the amount of time an asset is kept by the investor (i.e., a long holding period). The scheme’s orientation The capital gains tax you pay will depend on the type of mutual fund in which you invest once you have determined your holding period. Generally, mutual funds may be sorted into two broad categories: debt and equity. However, the tax treatment of hybrid funds requires further explanation. In this article, we will discuss the tax implications of mutual funds for various demographics in further depth. The Concept of Equity in Accounting Taxation of mutual funds schemes that invest at least 65% of their assets in Indian stocks or equity-related derivatives is considered equity-oriented for tax reasons. For tax on mutual funds redemption purposes, all other financing sources are classified as debt-oriented initiatives. Mutual Fund Equity Schemes with Long-Term Capital Gains Gains from the sale of stocks or equity mutual funds were not subject to long-term capital gains taxation of mutual funds until the beginning of 2018. (38). According to Section 112A of the Income Tax Act of 1961, long-term capital gains (LTCG) on equity-oriented plans such as mutual funds are now taxed at a rate of 10% on amounts above Rs 1 lakh. If you earned $120,000 in LTCG through an equity-oriented scheme in a fiscal year, your tax on mutual funds would be computed on $20,000 at 10%, independent of your tax rate. (with the appropriate fee and cess applied). Investing in Stocks: Units of equity-focused mutual fund schemes are subject to a 15% STCG tax upon sale per Section 111A of the Income Tax Act of 1961. By way of illustration, if you received $1,300,000 in STCG from an equity-based compensation plan during a fiscal year, you would be subject to a 15% tax on that amount (plus any applicable cess and surcharge). This is because the STCG tax does not benefit from the Rs. 1,000,000 exemption available for LTCGs. Individual Retirement Account: At least 80% of the total value of ELSS mutual fund taxation of mutual funds programmes is put into stocks and shares. If you want to reduce your taxable exposure when investing in mutual funds, this is the option for you. Under Section 80C of the Income Tax Act of 1961, ELSS investments are eligible for a tax deduction of up to Rs. 1.5 million. It’s important to keep in mind that there’s a Rs. 1.5 million cap on deductions under Section 80C. You would have less of a deduction for your ELSS payments if you already take deductions for other things under Section 80C, such as LIC premiums. [B-02] Conclusion: In terms of taxes, equity and debt plans are treated differently in the long and short term. In the case of mutual funds, a 12-month holding period is required for equity-oriented schemes, and a 36-month holding period is required for debt-oriented schemes to qualify as long-term capital gains. We’ve compiled a table with the relevant information to help determine whether your capital gains are long-term or short-term. Know more about it at Piramal Housing Finance.
08-11-2023
Read More
Personal Loan

Most important qualities to have while applying for a personal loan?

A personal loan is excellent when you need money to pay sudden costs. These may include your children’s education, renovating homes, expensive medical care, etc. Personal loans are popular because they have precise repayment terms. Plus, they do not demand any security. Despite this, your eligibility for a personal loan depends on different parameters. [B-01] Since personal loan requirements vary, you should familiarize yourself with the bank’s conditions before you apply for a personal loan. You need to make sure to meet all the documentation needs from the banks. Suppose you know this before meeting the bank official. In that case, your application process can be simplified, improving your chances of getting that loan. Requirements for a Personal Loan in India Generally, banks ask for the following requirements when you apply for a personal loan: 1. Applicant’s Credit Score and History This is by far the most vital eligibility factor when you apply for a personal loan. Credit scores are based on one’s payment history, any outstanding debt, and the total duration of credit history. A good credit score ranges between 300 and 850, so a borrower’s credit score should range between 670 and 720. However, some lenders give out loans without checking out the credit histories. 2. Regular Monthly Income You must show your income statement to your banker if you have a steady income. This will give you a better chance of getting the loan as the banker will believe you can repay the monthly instalment. Other important documents might include rent tax receipts, bank statements, and pay slips. You could provide tax returns or your fixed deposits if you are self-employed. 3. Security Do you have any valuables you can pledge to the bank instead of a personal loan? What you promise to the bank is security or collateral, which you offer the bank in exchange for a loan. Perhaps, you have investments, coins, collectables, precious metals, or real estate. Offer this to the bank in exchange for your loan. After you pay up the entire amount, the bank official will return your security. However, this is considered risky because, if you do not pay on time or in full, the lender may repossess the security in exchange for the money owed to the bank. 4. Debt-To-Income Ratio Debt-to-income ratio (DTI) is that part of an applicant’s gross monthly income that will go towards paying his monthly instalment. This figure indicates a borrower’s debt repayment ability. Bankers find that a DTI below 36% works best, though others may seek a DTI of about 50%. You can also ask your banker for the eligibility requirements before meeting him. Once you know this, you can be better prepared for your meeting. 5. Origination Fee This isn’t mandatory, though some bankers ask you to pay this fee. It pays for processing your application, carrying out credit checks, etc. Generally, this fee ranges between one per cent and eight per cent of the total loan amount. It depends on several factors, such as: The applicant’s credit score The loan amount Personal Loan Documents Required for the Application Process Fulfilling the eligibility criteria for a loan means submitting certain documents. These prove your identity, your address, and your place of work. Here are the documents you will be required to submit for your loan to be processed: For Salaried Individuals Proof of Identity: Voter ID card/Aadhar Card/Driver’s License / Employer’s Card Proof of Residence: Ration Card/Telephone Bill /Electricity Bill /Voter ID card Income Proof: Latest Bank Statement/Passbook to show salary credited for the past six months, latest six months’ salary slip with all deductions Form 16 of the past two years Copies of property documents For Self-Employed Individuals Proof of Identity: Voter ID card/Aadhar Card/Driver’s License/Employer’s Card Proof of Residence: Ration Card/Telephone Bill/Electricity Bill/Voter ID card Income Proof: Certified Financial Statement for the last two years, latest bank statement/Passbook in which your salary is credited for the past six months Copies of all Property Documents Documents Required for a Personal Loan Along with your loan application, be sure to add the following documents as well: Proof of Identity: Passport copy/Voter ID card/Driver’s License/Aadhar card Proof of Residence: Passport copy/Voter ID card/Driver’s License/Aadhar card Bank statement of the previous three months or passbook of the last six months How to Qualify for a Personal Loan Knowing a few things about the application process is good before you fill out the form. They include: Checking your credit score Improving your score by paying off any debt Think of a realistic figure that you would like to borrow Shop around for the best rates using lender prequalification Ensure you submit only a formal loan application Once you complete applying for a personal loan online, you will need to wait for a few hours until the banker decides. Usually, you will know the outcome that very day. [B-02] Conclusion Now that you know what to do to qualify while applying for a personal loan, you can prepare for it so that your application is accepted. One way of doing this is to access the Piramal Finance website and read all the articles on personal loans and other related topics. This company is one of India’s leading financial services companies. So, go ahead and explore its products and services.
08-11-2023
Read More
Home Loan

Home Loan vs Mortgage Loan – What is the Difference?

Are you confused between a home loan and a mortgage loan? Want to know about home loans and mortgage loans? Want to see the difference between home loans and mortgage loans? So now, in this article, you will get to know everything about home loans and mortgage loans, and how they differ from each other. After reading the whole article, you can easily differentiate between a home loan and a mortgage loan, and understand which loan is suitable for you. [B-01] What Is a Home Loan? A home loan is a type of secured loan used to finance real estate acquisition by using the property’s value as collateral. Finances of substantial worth can be obtained through home loans, including low-interest rates and extended repayment terms. Payments are made through monthly EMI instalments. The borrower regains full ownership of the property once all payments are made. If the borrower cannot repay the loan, the lender has the right to foreclose and sell the collateral to recoup the debt. Types of Home Loans Financing obtained to buy a home Loan secured against a property to make necessary repairs or alterations. Construction financing, which is a loan explicitly used to construct a dwelling Money borrowed to acquire land on which a dwelling is to be built Financing for constructing an addition to a house, such as a bedroom, bathroom, kitchen, garage, etc. A “joint home” refers to a loan taken out by two or more people, typically a married couple. A top-up home loan is a loan taken out in addition to the original home loan and can be used for anything. Changing home providers and transferring the remaining loan balance enables borrowers to take advantage of competitive interest rates and more favourable repayment arrangements. What Is a Mortgage Loan? A mortgage loan is a type of secured loan in which the borrower pledges an immovable asset, such as a home or commercial property, to the lender as security for the loan. The lender holds the collateral until the loan is repaid. This type of financing is expected since it enables you to borrow a sizable sum of money at an affordable mortgage loan interest rate and spread out your payments over a long time. Types of Mortgage Loans There are three main categories of mortgage loans to choose from. Home mortgages Finance for business properties Security-based loans Home Loan Vs Mortgage Loan – 7 Ways in Which They Are Different 1. Quantum of Loan The purchase of a home is often the most significant single financial commitment somebody makes. The purpose-built nature of a house loan means that you can borrow more money against the same amount of equity as you could with a mortgage loan. 2. Interest Rate Mortgage loan rates are higher than home equity loan rates. The Government of India has reduced the margin criteria for home loans to make homeownership more accessible to its citizens. 3. Loan Tenure Mortgage loans and home loans both feature lengthy repayment periods. Home loans have terms that might extend up to 30 years. Mortgage loan terms usually are 15 years, though some lenders extend them to 20 years. To better suit your budget, you can make prepayments on these loans in whole or part to shorten the term or the EMI. 4. Top-up Loans You can take out a second mortgage loan on top of the first. Depending on your credit history, you may be approved for a considerably larger loan than you initially selected. If you are qualified for a loan of up to 70% of the property’s market value but have already taken out a loan for 50% of the deal, you can take out a top-up loan for the remaining amount. Top-up options are uncommon with home loans, but certain creditors may be willing to provide one depending on their evaluation of your financial situation and ability to make payments. 5. Tax Exemption If you’re paying down your mortgage principal, you may be eligible for a tax break of up to Rs. 1.5 lakh under Section 80C. Also, the interest you pay on your mortgage is exempt from taxation under Section 24. General-purpose mortgage loans do not qualify for any tax benefits. 6. Prepayment Charges No lender, regardless of the sort of loan you’ve taken, can charge you a prepayment penalty because of a variable interest rate. There may be a prepayment penalty if a fixed interest rate is used. This is unique and varies significantly among financial institutions. 7. Use A mortgage loan can be used for many other purposes, like paying for college, a wedding, or unexpected medical bills, but a home loan can only be used to finance the purchase or building of a property. Documents Required for Home Loans and Mortgage Loans Latest salary slips/ proof of income Bank account statements for the last 3 to 6 months PAN card Aadhar card Proof of address Documents about the property being purchased IT returns In the case of home loans, you will also need to have complete paperwork of the property that is being pledged [B-02] Summing Up Our goal is to provide you with tips you should keep in mind while taking home or mortgage loans, which you can prefer. Which one is suitable for you? If you need money to buy or build a house, you should look into getting a home loan. Simply put, a mortgage loan can’t be utilised for anything else. Therefore, a home loan is viable if you need money for any other purpose. Investment Reliable does not offer financial advice, but we provide unbiased information and evaluations on trading, investing, and finance. Users ought to always carry out their research. Also, visit Piramal Finance has more in-depth, educational-related articles.
08-11-2023
Read More
Tax

What is property/house tax – NDMC, EDMC, BBMP

Property tax is the amount paid to a local governing body for a property. This amount is paid annually. Landowners pay property tax for the property they own. They pay the tax to a municipal corporation. Local governing bodies also collect taxes. This type of tax is usually considered to be regressive. Regressive taxes impact individuals who belong to low-income households as opposed to the wealthy. [B-01] What is property/house tax: Property or house tax is paid on real estate assets such as a house, properties rented to others, residential spaces, and office buildings. The municipal corporation collects these taxes in India. This is done once or twice a year. The municipal corporation assesses all the properties and looks at the size, area covered, construction, etc. After this, it collects a certain amount of tax. Property taxes are the main sources of income for any local government. The money needed for the city’s upkeep is paid through this tax. Staff payments, and office charges, are also covered by these taxes. Land or property owners must pay the property taxes on time. Not paying taxes on time can lead to fines. The NDMC, EDMC, and BBMP receive tax payments from the residents in their regions. These taxes are then divided between the region’s colonies and wards. Individuals need to find out which zone they live in. They should pay the correct amount of taxes to their local governing body. Property taxes include water, lighting, and drainage tax. The taxes are calculated under two diverse categories. These are self-occupied properties and let-out properties. Self-Occupied Property If the property is used only for residential reasons, the value will be 0 per year. If the property has not been let out or occupied, the annual value shall be put forth as 0. Let-out Property The annual value of the property can be determined if it has been let out for even a few months by the owner. It is determined by considering one or more of the following traits: A municipal appraisal Fair rent calculated by an information technology department The rent the owner has collected. Different Types of Property exempted under Property/House Tax Any property owned by the central government. Buildings that are not allowed in the municipal register. They are also unlisted. Specific properties that are vacant. These include plots of land or buildings. Schools, graveyards/cremation grounds, and recreational buildings. Charitable institutions, religious places of worship, and trade union offices. Deductions allowed while calculating property/house tax A deduction of up to 30% in the property tax is allowed. This deduction happens for the maintenance and repair of the property. The interest amount on a loan can be reduced for purchasing, repairing, or constructing a property. The maximum payable interest amount is around Rs 1,50,000, but only if the loan was given before April 1, 1999. If the loan was borrowed after April 1, 1999, the amount to be paid is Rs 30,000. NDMC Property Tax The New Delhi Municipal Council is responsible for collecting taxes in the region. The Department of Property tax collects the tax. It also collects a service charge. It is collected from private properties and government-owned properties as well. The Supreme Court directed this. Any properties completed after January 26, 1950, must pay these taxes. All buildings and land in New Delhi are subject to property taxes. These taxes are mandatory. The NDMC decides the rate of taxes every year. EDMC Property Tax The East Delhi Municipal Corporation charges tax on people buying properties in this region. Falling real estate prices motivated people to buy property in this area. East Delhi has many advantages in terms of development. This has caused growth in the real estate sector in that region. The official EDMC website can help you know more about the rules and regulations to be followed before and after buying a property in that region. You can pay the EDMC property taxes online or travel to an ITZ centre to pay the tax. BBMP Property Tax The Bruhat Bengaluru Mahanagara Palike is the third level of government in Bengaluru. The BBMP is run by representatives known as corporators. They are elected in each region. They are from each of the wards located in the city. Each municipal corporation calculates taxes in different ways. The BBMP follows the UAV or the Unit Area Value System. The tax in the UAV System is determined by: The location of the property. The purpose for which it is being used The returns that are filed by the individual. The formula is as follows: Property tax (K)= (G-I)*20% + Applicable cess (property’s 24%). You can calculate the property taxes on your own with this formula. Always verify taxes with a professional in the real estate industry to avoid fines. The last date to pay the property tax at the BBMP is March 31, 2021. [B-02] Conclusion It is important to stay up to date with all the taxation laws if you own a property. This can help you avoid any fines or imprisonment. It is important to keep yourself informed. Visit Piramal Finance to learn more about property taxes and stay on top of all the latest developments.
08-11-2023
Read More
Tax Savings

Top Tax Saving Mutual Fund in India 2022

Tax Saving Mutual funds or ELSS offer higher returns compared to regular saving schemes. You get to save Income tax under section 80 C of the IT act by investing in ELSS. Get a maximum amount of 1.5 lakhs tax deduction by investing in an ELSS tax-saving mutual fund and avail of the benefits of the shortest lock-in period. Before you go ahead and invest your funds in ELSS tax-saving mutual funds, get familiarized with ELSS. ELSS investments are made in stock. They, therefore, carry higher risks. They don’t offer guaranteed returns like usual investment schemes. However, it’s no secret that stocks offer higher returns over a longer time. Hence, ELSS tax-saving instruments have the potential to earn better returns. Further, ELSS offer the shortest lock-in period of as low as 3 years. Investments covered under 80C have lock-in periods of 10-15 years. ELSS with a cap of 5-7 years offers beautiful returns. [B-01] Everyone should make use of the tax deduction scheme by investing in ELSS tax-saving mutual funds. The beautiful thing about today’s informative world is that you can benefit from people’s knowledge. You don’t need to be a pro-investor to pick safe rewarding investment tools. Choose and invest amongst these 7 best-performing tax-saving mutual funds and reap bounty benefits from them. Quant Tax Plan Quant Tax plan is an ELSS mutual fund scheme by Quant Mutual Funds. It has been successfully offering maximum returns ever since its launch in 2013. A major part of the fund is invested in energy, material sectors, consumer staples, financial segments and services. It tracks the NIFTY500 total return index and has doubled the invested money in it every 2 years. Quant tax direct plan has a fund size of 2127 Crores. Its top holdings include Ambuja Cements, State Bank of India, ITC Ltd, Adani Ports, Reliance Industries Ltd and others. Ever since its launch, the direct plan has offered 21.94% average annual returns. Mirae Asset Tax saver fund Mirae Tax Saver fund has been in the market for more than 6 years and has Rs 13546 crores of assets under management. It has stood true to investors’ expectations with its consistent returns. The central focus of investment is majorly in the healthcare, automobile and technology sectors. The major holdings of the fund lie in HDFC Bank Ltd, ICICI Bank Ltd, Reliance Industry, Axis Bank, Infosys Ltd and others. Mirae Asset Tax Saver fund offers 19.79% average annual returns ever since its launch. HDFC Tax Saver Fund HDFC Tax saver fund is a rewarding ELSS tax-saving mutual fund from HDFC Mutual Funds. It has a fund size of Rs. 10,066 Crore under Asset Management and its top holdings are Hindustan Aeronautics, Bharti Airtel Ltd, ICICI Bank Ltd, HDFC Bank Ltd and State Bank of India. The investments are major in the healthcare, energy, and automobile sectors along with the financial and technology sectors. HDFC Tax saver fund was launched in 2013 and offers 13.63% average annual returns consistently. IDFC Tax Advantage fund IDFC Tax Advantage direct-plan is in the market for more than 9 years. It is an ELSS Tax saving instrument part of IDFC Mutual fund plans. It has Rs 3986 crores of fund assets under management with its top holdings in Reliance Ltd, Infosys Ltd, State Bank of India, HDFC Bank and ICICI Bank. The materials, technology and healthcare sectors are prominent investment sectors by this tax saving fund and have a slight inclination towards automobile and financial sectors. IDFC Tax Advantage fund has offered 17.96% average annual returns since its launch time. Canara Robeco Equity Tax saver fund Canara Robeco Equity tax saver fund is as old as other ELSS tax saving tools. It was launched back in 2013 and ever since then, it has Rs 4407 Crore of Assets under management. The fund invests primarily in the automobile, capital goods, and healthcare sectors; however, the technology and financial sectors are less explored. The top holding of funds is in ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd, Infosys Ltd and reliance Ltd. Canara Robeco tax saver fund offers 15.91% average annual returns and is above average at coping with losses in a falling market. Tata India Tax Saving Fund Tata India Tax Saving fund is an ELSS Tax Saving mutual fund scheme by TATA Mutual fund. It was launched in 2014 and since then it manages assets worth Rs 3191 crore under management. The ELSS fund holds major holdings in ICICI Bank, HDFC Bank, Infosys, State Bank of India and Reliance Ltd. The major investments of the fund are in Capital goods, energy and healthcare sectors. It can sail par in a falling market and is a good ELSS tax-saving mutual fund. The Tata India Tax Saving fund has consistently delivered 17.21% average annual returns. Axis Long-term Equity Fund Axis Long term equity fund is a part of Axis mutual funds ELSS Tax saving plan. It has Rs 31,624 crore of assets under management with its major investments in chemical, technology and healthcare sectors. The major holdings of the fund lie in Bajaj Finance, Avenue Supermarts, Kotak Mahindra, Tata Consultancy and Nestle India. Axis Long term Equity fund is comparatively less consistent when it comes to regular returns. It offers 17.58% average annual returns with a low coping mechanism in a falling market. [B-02] The following ELSS tax-saving mutual funds are selected based on 5 parameters. These parameters are consistency, downside risk, asset size, outperformance and mean rolling returns. These tax saving instruments offer generous returns compared to regular saving schemes like 5 years fixed deposits, PPF, NSC and others. Whether you are an avid investor or someone who wants to build safe saving instruments, ELSS tax saving tools should be on your investment list. Avail the advantage of tax deduction up to 1.5 lakhs today by investing in ELSS tax-saving mutual funds. Head to Piramal Finance and get quick financial reads to help you invest better. If you are looking to avail of personal loans, click here.
08-11-2023
Read More
Personal Loan

What is the processing fee for a personal loan: All you need to know

A personal loan may be a valuable financial tool for meeting expenses, but it includes expenses other than interest. Lenders add several fees on top of the principal amount of personal loans, including a processing fee for a personal loan. It’s important to figure out whether you can afford a loan before applying for one. Therefore, consider all the costs involved with a loan before applying, whether online or via a personal loan app. Let’s look at a processing fee for a personal loan and why a personal loan app would charge it. [B-01] How much does it cost to process something? The processing fee for a personal loan is money paid up ahead by the borrower to the lender to cover the expenses of processing a loan. The price is spelled out in the loan document. Examples include administrative expenses, document processing charges, credit check fees, etc. Lenders incur costs for administrative fees associated with processing and approving loans. They also determine the amount of the loan that will go toward the borrower’s processing fees. Various factors, including loan type, borrower credit, and loan amount, may affect the processing fee. What is the maximum fee that a lender may pay for your loan? Lenders are free to charge whatever amount they see fit for processing costs. Nonetheless, the law requires that all expenses associated with a personal loan be disclosed and not discriminatory, even if there is no specific regulation to that effect. Depending on their circumstances, lenders may charge processing fees ranging from zero to several hundred dollars. Before applying for a personal loan, whether online or offline using an instant personal loan app, discuss the processing fees with the lender. It would help if you also were looking for hidden processing fees levied under other names. Lenders can split the processing cost into two equal parts: a one-time login fee and the balance required upon loan closing or distribution. What type of cost is typical for a personal loan’s processing? Personal loan charges are often low, ranging from 1-6% of the total loan amount. Generally, the fee ranges between 0.5%-2.5% of the total loan amount. For loans of lesser sums, banks sometimes charge a disproportionately high percentage of the processing cost. In addition, they often provide lower processing fees for greater loan amounts. However, internet lenders charge much smaller processing costs of about two percent to four percent of the loan amount, or five hundred dollars, whichever is greater. The question is whether or not the processing fees are covered. Once processed, fees are often non-refundable. Sometimes those who applied for loans had their requests turned down. Despite having their applications rejected, they were still required to pay a processing fee. Borrowers are sometimes expected to cover the costs lenders expend to check borrowers’ credit histories, assess their trustworthiness, and perform various other administrative duties. Options for paying Transaction Fees Lenders may levy processing fees in various forms. While some lenders deduct the processing charge from the loan amount before disbursement, others deduct it from the check you write to them the moment your loan is approved. The lender may require prepayment of or deduct the processing fees from the loan amount before making a distribution. Be wary if the lender attempts to upsell you on anything outside the loan, such as insurance or a credit fitness report. It’s great to compare the rates and fees offered by several lenders for the same loan amount. How much do processing fees and other requirements from banks and online lenders typically cost? The lender will charge you a processing fee when you apply for a loan. The application process and the associated fees might vary across financial institutions. Your bank may demand the processing fee upfront to approve your loan. You should now acquire a written confirmation from banks if they guarantee to repay your processing charges if your loan application is refused. Since the processing fee for a personal loan is often non-refundable, a statement from the bank will help you recoup the return if the personal loan is not made available to you. Online lending companies often deduct fees associated with processing the loan before making a distribution. This results in a decrease in the amount of money you requested. Knowing the processing fees before applying for a personal loan is preferable to finding out about them afterward. A processing fee for a personal loan is often associated with submitting a loan application and the necessary paperwork. In most cases, the processing charge will be a fixed amount or a percentage of the total loan amount. Banks collect a processing charge to cover the cost of processing loan applications, legal procedures, customer service, document verification, and other services. What does a Loan Processor Do? Someone who processes loans or mortgages is called a loan or mortgage processor. They check the loan application to make sure the borrower has included everything needed, validate the information, and then pass it on to the underwriter for final approval. When you’re ready to apply for a loan, a loan officer will guide you toward the best option. However, the loan processor is responsible for everything that happens after you apply for a loan. To get a loan, you will need to fill out several forms, and the loan processor verifies the accuracy of your application and supporting documents. She may also check with other places, including your employer or a credit bureau, to double-check. [B-02] Conclusion For more information regarding the processing fee for a personal loan, contact Piramal Finance today. They will clear your doubts and apprise you with the information you need.
08-11-2023
Read More
Personal Loan

Pros and Cons of Personal Loan Prepayment in India

Personal loans are a widely known way to get money, whether for a wedding, a trip, a festival, or a new gadget. They are reliable, flexible, easy to get and don’t need any security. Even though getting the loan is simple, it is expensive. Due to the high EMIs and interest rates, many people with personal loans consider paying them off early or getting rid of them. You should conduct a cost-benefit analysis before personal loan prepayment to make sure you are picking the right choice. [B-01] This article discusses the pros and cons of loan prepayment. What is prepayment? When you make a loan prepayment, you repay all or part of your loan before its due date. According to the prepayment clause, the lender will charge a fee equal to a proportion of the total loan amount, or foreclosure fees on a personal loan, if you repay your loan before the set term. Personal loan prepayment fees vary from one lender to another. What are two types of prepayments? There are three types of prepayments. 1. Full prepayment Personal loans usually have a one-year lock-in period. After that, you can repay the entire balance and save on interest. Even if you pay early, you will still have to pay interest. The rates can vary from 3% to 5%. You might be surprised that some public and private lenders do not charge foreclosure fees on personal loans. If you need cash right away, you can get it without paying too much interest rates. 2. Partial prepayment You can make a partial prepayment if you have a large sum. A partial prepayment will make a dent in your loan payments. It can lower the principal amount you owe, lowering your monthly payments and interest. What are the pros of a personal loan prepayment? Paying off your debt before the tenure ends is a good way to ease financial stress. Let’s look at the pros and cons of prepayment. You save money on interest. When you repay a personal loan, you save capital income costs that you would’ve had to pay if you had kept the loan open for the whole tenure. Many people who take out a personal loan think the only way to save funds is to pay off the loan early. You can also save money by having to look for a personal loan with no prepayment fees. If you pay off your debts faster, you can save money on your EMI payments. You can use a loan prepayment calculator to determine how much interest you will save by paying off the loan early. You should, however, figure out prepayment fees and other extra costs (if any) when calculating how much you will save overall by choosing the prepayment option. It will make EMIs more affordable for you. Banks and NBFCs are more likely to give personal loans to people whose total EMIs, including those for existing and new loans, are less than 50% to 60% of their total income. So, if your EMI is more than 60% of your income, you have a lower chance of receiving a personal loan. You can improve your loan eligibility by paying off an existing personal loan and lowering your EMI/NMI ratio to between 50% and 60% of your monthly income. Some lenders also offer personal loans that can be paid off early without fees. It reduces the number of loans in the mix of credit. Since personal loans are unsecured, early payment will lower the percentage of unsecured debt in the credit mix. As a result, a greater proportion of secured loans may improve your credit scores, enhancing your chances of obtaining additional loans. To be on the safe side, you can take advantage of a personal loan with a no-fee prepayment option. What are the cons of loan prepayment? You have to pay penalty fees for prepayment. The RBI has told all lenders that they can’t charge fees for paying off personal loans with variable interest rates early. On the other hand, borrowers who get personal loans with a fixed interest rate need to pay prepayment charges. When you repay a personal loan, you may have to pay a prepayment penalty of up to 5% of the remaining principal amount. If you repay a personal loan with a fixed rate early, you might save less on interest. Many lenders will only let you make partial payments or prepayments on personal loans once you’ve made a few payments. It will affect your liquidity. For paying back the loan, you can use up all of the cash or investments you already have. But if you do that, you might not be able to manage a monetary emergency like a medical problem. In such a case, you may have to take out a loan with a higher interest rate if current investments are used beforehand. You must only choose the prepayment option if you have enough funds for an emergency. You should not use your existing investments to reach unavoidable financial goals. So, before you choose to foreclose or repay your loan early, you should think about these factors and carefully consider the prepayment penalties, extra interest, or whether or not it might help you. [B-02] Conclusion Personal loan prepayment is appealing to many because it will help them reduce their interest costs and total repayment load. But many lenders charge fees for repaying the loan early, which reduces your cash flow. It can be a drawback. On the other hand, you can easily repay your loans and save money on interest by refinancing them with a lender who has lesser interest rates. For more details, you can visit Piramal Finance and explore the personal loan options.
08-11-2023
Read More