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

Almost everyone dreams of owning a house. However, everyone does not have adequate resources to buy one instantly. While some save money, most people apply for a home loan. A home loan includes the principal repayment and the interest amount. Both the interest and the principal amount qualify for tax deductions. Under the Income Tax Act of 1961, the Indian government offers various tax benefits on home loans. Hence, if you are planning to buy or build a house, you should know the home loan tax benefits provided by the government. [B-01] Home loan tax benefits in 2022 The tax benefits that apply to various types of home loans in 2022 are as follows. Home loan tax benefits under Section 80C: Repayment of the principal amount You can avail of a maximum deduction of Rs 1,50,000 each year on the principal repayment portion of your home loan EMI. This income tax benefit applies to both rental and self-occupied properties. You can claim the stamp duty and registration fees once and only in the same financial year. The total deduction cannot exceed Rs. 1,50,000 per year under Section 80C. Furthermore, you must have a fully constructed property to claim this home loan tax benefit. You cannot avail of this benefit if you sell your property within five years of possession. All tax deductions claimed will be reversed if you sell your home before five years. Furthermore, the sale amount will be added to your income. Home loan tax benefits on interest payments under Section 24 Under Section 24(b) of the Income Tax Act, you can claim a tax benefit on the interest you pay on the housing loan. In the case of a self-occupied house, you can avail of a deduction of up to Rs. 2,00,000 on the payable interest amount. If you own two houses, the aggregate tax deduction cannot cross Rs. 2,00,000 per year. If you have rented out your property, you can claim the total interest you are entitled to pay on your housing loan for construction, purchase, repair, reconstruction, or renewal as a tax deduction. However, under the Income from House Property Act, the loss adjusted against income cannot be more than Rs. 2,00,000. You can carry forward the remaining loss amount for eight years to accommodate the loss against the income accrued from the house property only. Only the home loans sanctioned on or after 1st April 1999 are eligible for these deductions. If you purchased a property still under construction and are paying EMIs, you can claim the interest payable on your home loan as a deduction once construction is complete. The Income Tax Act of 1961 allows you to claim a deduction of the interest payable during and after construction. The interest payable during the pre-construction period can be given as a deduction in five equal annual instalments. These instalments start only after construction is complete. Home loan tax benefits under Section 80 EEA: Interest on home loans for first-time buyers The interest amount you need to pay on your home loan is also liable for an extra deduction. A maximum of Rs. 1,50,000 can be deducted. However, to be eligible for this home loan tax benefit under Section 80 EEA, you need to fill in the following criteria: To purchase a residential home, you should borrow your home loan either from a housing finance company or a financial institution. Only the loans approved between 1st April 2019 and 31st March 2022 are eligible. The housing property stamp duty cost should be less than Rs. 45,00,000. The taxpayer must be a first-time buyer. If you and your partner own the housing property together and contribute towards the loan repayment, both are eligible to claim deductions. Both resident and non-resident owners can claim home loan tax benefits under Section 80 EEA. Since the 2022 budget has not extended the deduction benefit available under Section 80 EEA, individuals taking a housing loan on or after 1st April 2022 will not be eligible for this benefit. Home loan tax benefits under Section 80C and Section 24: Joint home loans on the principal amount and interest payment If you have applied for a housing loan with a spouse or partner, both can avail of a deduction of up to Rs. 2,00,000 on the housing loan interest payments under Section 24(b). Each party can also claim a deduction of up to Rs. 1,50,000 on the principal repayment amount under Section 80C. In this case, the tax benefit is doubled compared to the benefits available for a loan taken by a single party. However, to be eligible for this home loan tax benefit, both parties must be co-owners and should pay their EMI payments without fail. Home loan tax benefits under Section 80EE Under Section 80EE, first-time buyers can avail of a maximum deduction of Rs. 50,000 on the payable interest payable on their home loan in the following cases: The monetary value of the acquired property is not above Rs. 50,00,000, and the loan amount is at most Rs. 35,00,000. The home loan should have been approved between 1st April 2016 and 31st March 2017. You can benefit from the advantage offered by this deduction till the repayment of the loan continues. This deduction has been made accessible from FY 2016-17 and is still in effect. [B-02] Conclusion You can easily own your dream home with the help of a housing loan. Although a home loan can be an additional burden, you can somewhat lessen its weight by availing of the various government-backed home loan tax benefits. Contact a financial expert if you do not understand the various tax benefits or the details of tax deductions. You can now transform your dream of owning a house into a reality with the different types of home loan options provided by Piramal Finance. Piramal Finance is a housing finance company registered with the National Housing Bank (NHB) and provides retail and wholesale funding opportunities across sectors. Unique features like zero prepayment and foreclosure charges, minimum documentation, quick sanction, and instant disbursals make Piramal Fiance stand out. Reach out to experts from Piramal Finance to understand more about the different types of home loans.
08-11-2023
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How To?

How to Transfer EPF Online Through EPFO Portal?

The Indian government would pay the employer and employee contributions to employees’ EPF accounts. For an additional three months, from June to August 2020, the edge goes to businesses with fewer than 100 employees, 90% of whom make less than Rs 15000 a month in pay. Non-government organisations now only contribute 10% instead of 12% to the EPF. An individual can open a Public Provident Fund (PPF) or Employee Provident Fund (EPF) account. Both require the employer and employee to contribute a portion of their earnings. Because of their E-E-E (exempt-exempt-exempt) nature, Employee Provident Funds (EPF) are a great option for paid individuals. It was decided that making investments in EPF, earning interest through EPF, and withdrawing from EPF after five years were all privileges. This article describes the process of performing a PF transfer online. Keep reading to learn more about it. Required Form for PF Transfer Transferring PF monies across accounts necessitates the use of Form 13. To transfer their PF balance from their old account to the new one. When salaried individuals switch employers covered by the EPF Scheme, they must fill out this form. This is very vital. EPA Form 13 The EPF offers a transfer form called EPF Form 13 that can be received in person or online. Fill out the PF Form 13 and submit it to transfer the EPF account. Qualification for PF Transfer Employees are required to confirm that their registered mobile number and UAN are operational on the EPFO portal. When requesting a transfer The PF subscriber must sync any bank information that has been confirmed by the company, such as bank account information and an IFSC number. On the EPFO website, the employee must enter their Aadhaar data. The site should show the joining and departing dates of the PF participant. Additionally, the worker must give their reason for quitting. Please keep in mind that the EPFO portal only permits one PF transfer request to be submitted at a time. Now that customers are aware of how to move PF online, it’s time to identify the paperwork you’ll require to ensure that everything goes smoothly. Below is a list of the paperwork needed for the online PF move process. Alternatives for PF Transfer For PF transfer, there are primarily two approaches: PF Offline Transfer The employee must fill out the PF Form 13 with all pertinent information and submit it to the current employer to use the offline PF transfer option. Following that, the existing employer will send the application to the EPF office. The form will then be sent to the former employer by the EPF office for verification. After receiving confirmation and attestation from the prior employer, the EPF office will transfer the remaining funds from the old account to the new one. There is no need for copies of the applicant’s UAN or Aadhaar card. When a person has numerous staff IDs, the EPFO assigns each employee a UAN, which acts as a unique identification number. Online Transfer Claim Portal (OTCP) A method for transferring PF funds online. To use this helpful online portal, the PF member does not need to provide their UAN, Aadhaar, or other documentation. By attempting to submit a few financial details and employment information, you can transfer your PF. One Employee, One EPF Account: This regulation was put in place to prevent confusion brought on by having numerous PF subscriber data. All current PF accounts will be included in this endeavour, according to EPFO. The PF members’ ability to submit multiple PF transfer applications helps achieve this. Automatic EPF balance transfers are only possible when transferring a PF account from another account, and they require the subscriber’s UAN. The subscriber doesn’t have to exert much effort during this process. The PF will be allocated when their new employer enters their UAN into the system. Pension Plan for Employees The Compensation Act of 1952 specifies how an Employees Provident Fund (EPF) operates. Organisations with 20 or more employees must follow it. However, other organisations may voluntarily take part in this programme. This organization might join a government-approved project, or it might launch a retirement program to build trust. Each one of the known Provident Fund Schemes requires official approval from the Commissioner of Income Tax (CIT). Documentation Needed for an EPF Transfer Form 13 Revised, Universal Serial Number (UAN), Number of Establishment, Identity Verification (Aadhaar, PAN, or Driving License), Employer Information (must be Your Current Employer), Financial Institution Information, and PF Account Information (for both old and current accounts) How to Complete an Online EPF Transfer Form Step 1: Log in to the primary webpage of the EPFO portal using your credentials. Step 2: Once you’ve logged in, click the “Online Services” page. Then “Each Member – One EPF Account (Transfer Request)”. Step 3: Carefully go through all the data on the screen, then enter the details of the PF account to which the money will be transferred. step 4: To obtain the account details for the prior job, choose “Get Details” in. Step 5: Click on “Previous Employer,” then type the UAN and the final ID number. Step 6: Complete the online EPF Form 13 form. Step 7: To enable tracking of the application process, a tracking ID will be generated. Step 8: is to duplicate the form and sign it. After the date of procurement, the applicant has ten days to submit the aforementioned paperwork. Step 9: Both new and former employers must certify the data on the application. Step 10: Before the funds are moved to the new account, the information on the form must have the approval of both employers. [B-02] Conclusion It’s usual for workers to change jobs mid-career between PF-registered firms. But transferring PF rather than withdrawing it can help to protect it. Another key tax consideration is the fact that withdrawals from the PF done within five years of employment are taxed. Your UAN account is where all of the PF money from previous jobs is accumulated under several member IDs. The EPFO portal will save you the time it would take to look for your own money.
08-11-2023
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How To?

Complete guide on how to calculate HRA

HRA is one of the most important factors to consider for your salary. HRA stands for House Rent allowance. It is taxable under the Income Tax Act. Every employer is responsible for providing HRA to their employees. If you are a salaried employee, you can claim HRA. The house rent allowance helps to meet all your accommodation-related expenses. It is the amount your employer will provide the employees with the cost they need for a rented property. If you are eligible for HRA, you can reduce the tax liability. The allowance may vary depending on your city, as it helps cover the cost of living in that particular city. [B-01] What is HRA? HRA stands for House rent allowance. The employer provides employees HRA to cover the house rental expenses that the latter needs to pay. It is an integral part of the salary slip of the employee. The allowance is taxed depending on different factors. If the employee needs to pay rent of more than Rs 1,00,000 annually, they will need to provide the PAN number while filing for the returns. If any employee pays the rental expense but does not get the HRA from the employer, they can claim it under Section 80GG of the Income Tax Act, 1961. This is also valid for self-employed individuals who do not receive salaried income but are paying rental expenses. What is an HRA Tax Exemption? As per the Income Tax Act of 1961, the HRA is exempt from the taxation of the employee. The rest of the amount will still be taxable. Certain criteria are met to understand how much allowance for house rent will be deducted from the salary. It is essential to calculate the deductions of income tax calculation. However, the HRA online can play an important part in making the right choice. A salaried employee will not be able to claim HRA if they live in a house of their own. The main purpose of allowance for house rent in the salary is to cover rented properties and not for properties you own. Compared to the old regime, significant changes have been brought to the new regime. As per the new regime, there won’t be certain exemptions that existed in the old regime. You need to file for the deductions properly. If you need help with filing for the allowance, you can get in touch with professionals. The accountants and financial experts are well aware of HRA deductions and can help you make the right choice in filing. How is the HRA Calculated? The House Rent Allowance, as stated above, is a major part of your salary. Certain factors will be considered while calculating HRA. Some of the major factors that will form to be an important part of the HRA include the following: Salary: The Dearness Allowance and Special Allowances of your salary will be important in determining how much HRA you can get from your salary. Rent paid: The rent you pay for living in the expense is one of the main factors to consider for HRA online claims. You can only claim the HRA if you have sufficient proof. You will need the bank statement, rent receipts, and lease agreements to provide that the rent is being paid every month from time to time. HRA from Employer: How much HRA does your employer provide you? You will only be able to make claims if you’re familiar with these factors. Residence: The place of residence will have a huge impact on HRA. Anyone living in a metropolitan city should have an HRA of at most 50% of the basic salary. For the ones living in a non-metropolitan city, the limit is around 40% of the basic salary. Can I Claim Hra If I’m Also Claiming Home Loan Deductions? You must know the eligibility requirements if you consider claiming home loan deductions on your tax return. If you meet the requirements, you can claim HRA and home loan deductions on the same tax return if it’s an eligible deduction. Here’s a guide to calculating your HRA deduction: HRA Exemption You may be eligible for the HRA exemption if you’re an Indian employee contributing towards your income tax liability. This exemption is a provision in the Indian Income Tax Act that allows employees to contribute up to Rs 2 lakh towards their income tax liability. To qualify for the exemption, the employee must earn more than Rs 6,000 per month and have been with the company for at least six months out of the past 12 months. If you need help calculating your HRA eligibility, don’t hesitate to reach out to us. HRA Exemption When Employer Refuses to Provide Deduction Benefits If your employer refuses to provide deduction benefits, it is easy to calculate your own HRA. This can be done by using a calculator or online calculators available online. The amount you get back will depend on the type of employee you are and the size of your employer. Be sure to speak to an accountant if you have any questions about calculating your HRA exemption. HRA Exemption When More Than 1 Family Member Pays Rent If you are the only one paying rent in your house, you are exempt from having to pay HRA. This exemption also applies if more than one family member pays rent for part of the year – they will be considered tenants and, therefore, liable to pay HRA. Make sure to keep all official documents, such as leases, receipts, etcetera, to prove this exemption is applicable. If you still need official documents, you can claim an exemption by proving that the other family members are not occupying the property full-time. [B-02] Conclusion In this comprehensive guide, we have explained everything you need to know about the HRA exemption. From the meaning of the exemption to the various ways to save tax using the HRA, you will be adequately equipped to claim your exemption and save tax as required. You can schedule an appointment with Piramal Finance professionals to clarify any doubts.
08-11-2023
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Personal Loan

10 Useful tips to manage your car loan emi

Does your vehicle drive you up the wall regarding its EMIs? Let’s try to find a way to make this drive a smooth one. Vehicles have long since shed their luxury label and become a necessity. Financial planning before purchasing a car is critical for ensuring that the loan is properly acquired, EMIs are scheduled, and repayments are made over the loan’s duration. This will avoid hassles and debt. Digitalisation offers numerous options for managing your car loan. One such application is the car loan EMI calculator, which will guide you at the pre-purchase stage. While all this sounds easy on paper, let’s see how you can tackle your car loan EMIs. [B-01] Plan your purchase basis your lifestyle The prospect of owning a car can be both exciting and frightening. A fair assessment of your finances, savings, and spending pattern is a must. You can put together a list of all your loan commitments, and how it is impacting your monthly income. This will give you a sense of how much residual income is left for you to spend on the EMI of your dream car. Set aside a Budget Setting aside the money you are willing to allocate for this big buy helps you plan for the future. After deciding your monthly EMI commitment, you also need to decide the duration of this car loan. Here, the car loan EMI calculator assists you in determining your monthly payouts. This tool calculates an approximate EMI sum at current interest rates as well as different tenure options based on your allocated budget and car preference. The interest rate and the term of the loan are key factors that will impact your car loan journey. Research Lender options The Indian car market is booming today, with retailers offering a lot of interesting offers along with the vehicle, from easy repayment options to additional car accessories. The buyer stands to gain with multiple incentives being offered. Spend adequate time researching loans offered by several banks and NBFCs. To assist you in deciding the source of your loan, compare several offers and schemes after considering all value-adds. You can undertake this research easily through the online medium, and browse through relevant websites; most of these financial institutions have a car loan EMI calculator on their official websites to help speed up your decision. Choice of EMI scheme The EMI option you choose is directly proportional to the rate of interest and the duration of the loan. This means that a higher monthly EMI means a quicker closure of the loan, on the other hand, a longer tenure would mean paying more interest. Choose wisely, a shorter duration can help close the debt cycle faster as compared to a longer tenure. Pre-planning the loan schedule With the help of the car loan EMI calculator, you can decide your monthly payouts, and the spread of the loan duration, which helps you adjust the loan amount conveniently. The car loan EMI calculator helps you decide whether it is in your best interest to opt for a down payment along with applying for the car loan. Such planning with a car EMI calculator takes off your future worries without impacting your financial goals negatively. Timely payments You must honour your monthly payouts and try your best to avoid any defaults. This not only attracts a penalty but also impacts your creditworthiness. Multiple non-payments against your name will affect your future loan applications. Hence, always plan ahead and avoid defaulting on your EMI schedule. With a cellphone that is always handy, it is easy to set up reminders so as not to miss the EMI date. Tax Benefits You must take note that if you have taken the car loan for business purposes, you can claim a tax deduction against the interest paid. This will bring down your taxable income, thus resulting in savings. Furthermore, you can claim benefits on the depreciation of the car and other maintenance expenditures. To successfully make such claims, the car should be used for the purpose of running a business and registered in your name or the name of your enterprise. Pre-payment options When looking for a lender, always look for sources that allow you to make part payments on your car loan. This may be subject to some charges, find out what the cost of such pre-payments is. Additionally, you can also foreclose your loan before the tenure is over, this too will attract some charges from the loan provider. Make a note of all such expenses while making a decision on the car loan. Refinancing your car loan Sometimes you may be in a situation where you are unable to pay the loan as per your current agreement with your lender or lending institution. Worry not; you have the option to rework your loan terms to either rework the interest rate or extend the tenure, as may be the case. With the help of your lender, you can modify the loan agreement appropriately once you meet the eligibility criteria and get better commercial terms on the loan. Consolidating your loans Living in a day and age where we work tirelessly to fulfil most of our dreams in one lifetime, we do end up taking on several loans. In this scenario, keeping track of the EMI schedule of different loans such as personal, education, credit card, etc. becomes challenging. One way to efficiently manage your finances is to take out one major loan to pay off all the other pending loans. This loan may come with a lower interest rate and favourable payoff terms. This helps reduce your financial burden considerably. [B-02] Parting words Last but not the least, any loan is a debt until it is paid off, it is always in your best interest to try and minimize your expenses, make informed choices, and plan judiciously to avoid getting into a debt trap. To know more about car EMI calculators, loan applications, and managing your finances better, log on to https://www.piramalfinance.com.
08-11-2023
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How To?

How to Check the Performance of your Mutual Fund Investments?

Mutual funds are a new investment method. They give better returns than other investments. A mutual fund is a type of investment that converts the money of many investors to buy stocks, bonds, government securities, gold, and other goods. These investments aim to get more money back than what was put in. Asset Management Companies or Fund Houses oversee putting together money put in by individual investors. They promote mutual funds and manage investments. They make it easy for investors to do business with each other. When examining mutual fund performance, you should look at more than just how it did in the past. The past mutual fund performance might not tell you exactly how it will do in the future. But it might help you find the right group of companies trading within the market now. [B-01] Why is it vital to observe mutual fund investments often? When buying shares in a mutual fund, you often hear the phrase “subject to market risk.” It is because mutual funds invest in a wide range of markets. So you should analyze the best-performing mutual funds before putting money into them. Regular review of your investment plan is very vital. It could help you allocate your assets more evenly. How to check mutual fund performance? When determining the performance of a fund, it can be helpful to review its fact sheet for additional information. In the financial report, you can see an overview of the progress of all the plans offered by your financial institution. This also includes your investments. The following is a step-by-step procedure to check mutual fund performance. Step 1: Decide what to do with your invested money. Step 2: Research the past performance statistics of the mutual funds. Step 3: check how the fund’s fees are set up. Step 4: Do the calculations to get the risk-adjusted returns. Step 5: Check the results and performance with indexes like BSE and Nifty. The best-performing mutual funds in India Putting money into mutual funds could be one of the best ways to build wealth over the long term. Choose the type of mutual fund and the way to invest. These will help you meet most of your financial needs. Factors influencing mutual fund performance Before deciding the best-performing mutual funds to include in your investment plan, check the following factors: Purpose When you put money into a mutual fund, keeping your goals in mind is vital. A goal may have a short time frame, like going on vacation to a different country, investing in a house, or buying things for the house. It could also be a long-term goal, like saving money for retirement or saving for education. Risk The risk comes from the fact that you don’t know everything about what you’re getting into. It is well known that mutual funds are conditional to market risks. Before deciding on a particular mutual fund, an investor needs to think carefully about how much risk the investment involves. Return on assets If you are an investor, you should always think about when you want to buy your next thing. If you need the money quickly, you should put it in liquid funds instead of equity funds. Methods for investments The way that fund companies decide how to spend their money is an investment strategy. During the liquidation process, you will have to sell your assets for less than what you paid. Performance of funds Measuring a fund’s performance ensures that its investments have held up through different market cycles. Because of this, it would be able to give a steady return on investment over time. Costs comparison The expense ratio is a term for the fee or commission that investors must pay for their investments to be taken care of correctly. To invest, you should look for mutual funds with the lowest fees. Taxes According to the Income Tax Act, you must file and pay taxes on any profits or returns you get from your investments. Direct plan or regular plan A person who wants to buy shares in a mutual fund can either buy shares directly or buy shares through a regular plan. Investors can buy the net asset value units directly from a fund house when doing direct transactions. In the case of a regular plan, you can only buy the units with the help of a commissioner or broker. Most of the time, direct mutual fund returns are higher than indirect ones. This is because they don’t include commission costs. How to understand mutual fund performance? A plan’s net asset value (NAV) shows mutual fund performance. The NAV is reported once a week for closed-ended plans and once a business day for open-ended plans. You can buy or sell open-ended funds at any time. On the other hand, you can only buy closed-ended funds when they first come out. You can sell them when the investment period is over. All mutual funds post their Net Asset Values on their official websites. As part of their regulatory responsibilities, there should be a report on mutual fund performance every six months. These results must include the fund’s returns and yields over time, ever since the scheme started. Because of how these things affect the yield, investors can also look at other details, like how much of the total assets go to expenses. Many newspapers and digital publications, offline and online, regularly report on best-performing mutual funds. Investors need to read these reports and stay up-to-date on mutual fund performance. An investor can figure out what mutual fund performance is doing by looking at how other mutual funds in the same category are doing. You can also use several benchmarks, like the BSE Sensitive Index and the S&P CNX Nifty, to compare the performance of equity-oriented schemes. When deciding when and how much to invest in mutual fund schemes, investors need to conduct the required research before going forward. [B-02] Conclusion Knowing mutual fund performance when trading on the stock market or making investments is essential. Put your money in mutual funds that meet your needs. After you’ve invested, keeping a close eye on how it’s doing on the market is vital. Regarding trading and investments, using mutual fund analysis to track where you stand in investing and the stock market can help you make better, more educated decisions. Check Piramal Finance to learn more about mutual funds.
08-11-2023
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Personal Loan

Know how to Repay Education Loan Online in India

Education is one of the basic pillars of one’s life. One’s education defines their future. It holds great importance in whether a person will lead a happy life. That is the reason why parents in India invest greatly in their children’s education. Great importance is given to education even if the family does not have much money to spend. To educate their child, many families or individuals use education loans to cross the financial barrier. Once the course is completed and the student finds a proper job, he/she can then repay the loan to the bank or lender. [B-01] What is an Education loan? An education loan is a sum of money borrowed to finance education at the undergraduate level. These loans can cover tuition fees, living expenses, books and other educational needs when a student is pursuing a degree. The education loan is deferred while the student is pursuing their degree in college. In most cases, there is a ‘grace period’ of over 6 months after the degree ends. This ensures the student has enough time to get a job and then start paying back the education loan amount with their salary. How do education loans work? Students can avail of education loans from banks by filling out a free application form. This form requires them to fill out details such as name, address, bank details, etc, and submit it to the bank. In India, banks give loans up to INR 4 lakhs without collateral. Beyond that, they would ask for one. Collateral in the form of land papers, house papers, etc. can be submitted to the bank to get a bigger loan amount. Education loan interest rates in India hover around 6.75% to 12.9%. The State Bank of India, for example, has an education loan interest rate of 6.85%. Types of Education Loans in India In India, student education loans are classified into three categories based on the location of education, course and collateral included. 1. Location-Based Loans Domestic Study Loans As the name suggests, this loan type is for students studying in India. The university must also be recognised by the lender to take an education loan from them. Study Abroad Loans These loans are created to help students bring their dreams of studying abroad to fruition. Similar to domestic loans, the foreign institution must also be recognised by the bank to get the loan. 2. Course-Based Loans Indian banks also provide education loans based on the course. These are the most popular ones. Bachelor’s Degree The most common educational degree in India is a Bachelor’s degree, e.g. BTech or MBBS. This course is done after one’s higher secondary education. This is why a vast number of Indian students take an education loan for financing their Bachelor’s degree. Higher Education Many students also do higher studies after their Bachelor’s degree. This is done mostly to broaden their horizons and qualify for advanced roles with better pay packages. Hence, an education loan for higher studies is also quite popular. Professional Education Some may also wish to pursue courses like PhDs or Executive MBAs to take their professional career to greater heights. Hence, education loans are vital here as well. 3. Collateral-Based loans Secured Loans Education loans which are for higher amounts require collateral to be submitted to the bank. Students can pledge assets like houses, land, and other similar valuable things to obtain an education loan. Unsecured Loan Many Indian financial institutions also offer unsecured loans if the student doesn’t provide collateral. How to repay educational loan online in India Most banks usually provide a minimum of 6 months as the grace period after the completion of the education loan so that the degree holder has enough time to get a job and start repaying the loan. Upon the completion of the ‘grace period’, the education loan has to be repaid to the bank. Although the steps of repaying an education loan online would be slightly different for each bank, the basic principle remains the same. Let’s look at how one can repay their education loan online in India. Select the BankThe process of repaying the loan online includes choosing the bank that one has taken it from. For this, they must go to the official website of that bank and go to the loan section. Provide the Loan DetailsIn the next step, provide all the details of the education loan such as loan number, phone number, and bank account number. After providing the details, one will be asked to provide the required amount against the ‘Amount payable’ on the website. They must fill in the amount of money they want to repay and click on ‘Pay now’. Confirm PaymentUpon filling in the details, they will need to enter their internet banking authentication details to start the payment process. They must then choose the amount they would like to pay against their education loan repayment. After clicking ‘Pay now’, the money will be debited from their chosen bank account instantly. Receive Online ConfirmationThe payment confirmation will be sent through SMS and email. The same process can be repeated multiple times whenever one wants to make the payment against their education loan. [B-02] Tips on how to manage student loan debt. Plan a monthly budget and follow it ardently. To reduce the principal amount faster and pay less in interest, foreclose the education loan if possible. This will minimize the loan duration and the interest accrued. One must plan and understand monthly cash flow and make necessary changes to their budget to repay the education loan on time.
08-11-2023
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Tax

All you need to know about what is and how to pay service tax in India

Service tax in India was introduced in 1994. The tax for the first time was levied on telephone services and services relating to insurance, other than life insurance. It was also levied on the services provided by Stock Brokers because service constitutes a significant part of the country’s GDP. The number of services brought under service tax has increased over the years. As of 2011, 119 services are taxable in India. The initial rate of service tax was 5% of the gross value of the service. This was increased to 8% by the 2003 financial budget. In 2004, it was increased to 10% and at present service, tax is 12% with an additional 2% cess on education. Section 66 of the Finance Act of 1994 details the authority that can charge service tax in India. [B-01] Who pays service tax? It is usually the service provider who has to pay service tax. On the other hand, the government can also direct a person, other than the service provider, to pay for it. The service receiver is asked to pay service tax in situations like simplifying the administrative process, or escalation of the cost of collection. If you are an insurance agent selling insurance policies, you are not levied the tax. Instead, the insurance company incurs the service tax. If you buy a service from a service provider located abroad, the service tax is to be paid by you not the seller based outside India. If you are a consignor or consignee of goods carried by the Goods Transport Agencies, you are liable to pay service tax under a special category mentioned under notification No. 24/2005-ST dated 7.06.2005. How much is the service tax? Service tax was summed at 15% in June 2016 under Section 66 of the Service Tax Act. There was also an additional 0.5% Krishi Kalyan cess and a 0.5% Swach Bharat cess. The calculation is done on the charges that you paid or received for a service you bought or used. While most of the services on the list are taxed following the same rule, there are also some exceptions. In the case of air transportation, there is an exemption of 60% on air transportation. There is a 70% exemption on some services offered by tour operators. There is a 30% exemption on chit funds. There are many more under the exemption list. Service tax is charged on the percentage amount left after exemption. How to pay service tax in India? The first step to pay service tax in India is that you submit an application to the Superintendent of Central Excise in Form ST-1 and register yourself. You must apply within a time of 30 days from the date from which the service tax is levied. You can also register within 30 days of the commencement of your business. You can consider whichever of these two conditions is later to apply for registration to pay service tax. The good news is that you don’t have to pay any registration fee. In case you are applying for more than one taxable service, you can do that in a single form. Do enclose a copy of your PAN card, address proof, partnership deed, company constitution, etc. along with your application form. Usually, you get the registration certificate within seven days of filing your application. If the business has been sold or acquired by another party, they need a fresh registration. If you are a registered assessee and start a new service for the premises of the old one, you need not apply for re-registration. You can fill out Form S.T.1 and submit it to the jurisdictional Superintendent for making amendments to the existing information. Self-assessment and payment You can do a self-assessment of your taxes and file tax returns with the jurisdictional Superintendent of Central Excise as per rules mentioned in Section 70, Finance Act, 1994. Many think that service tax is paid on the amount billed to a customer of a taxable service. That is not right. You need to pay service tax for the value of the taxable service that you provided during a stipulated period. In the case of corporates, service tax must be paid for a calendar month. The service tax must be paid on or by the 5th of the next month. For non-corporate services, tax is payable every quarter. Service tax must be paid on the 5th of the month following the quarter. For each financial year, a non-corporate taxpayer will pay service tax in all four quarters of the year. Service tax is paid through the TR6 challan in the designated banks. You can also pay service tax via a cheque. There is also an interest and penalty levied in the case of delay or failure to pay service tax on time. Can service tax be paid online? You can also file your service tax online. For online tax payment, you must first register yourself in the CBIC-GST portal. To pay service tax online, you will also need to enter the 15-digit code allotted by the jurisdictional Commissionerate. Once the code validity is established, all your details like name and address will be displayed on the page. You can now begin the process of online tax payment. From the ‘Services’ menu on the website, you can start the process of online payment of service tax. You can then fill in the necessary details and generate the Challan which remains valid for 15 days. To make the online tax payment, you will be redirected to the ICEGATE portal. The ICEGATE portal will display your unpaid challan. Select the challan for online tax payment. You can make a digital transaction and pay service tax online. You can also take a printout of the challan and make the payment at the nearest bank branch. [B-02] While making an online tax payment, always wait for the confirmation message displayed on the portal. This means that your online service tax payment was successful. The words tax or service tax baffles many people. You just need the right information to do away with myths and become a pro at filling your tax returns including online tax payment. You can read and learn all your need to know about service tax and its payment procedures from many reliable online sources like the Piramal Finance website.
08-11-2023
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Business Loan

Important Factors You Shouldn’t Miss While Applying for Business Loan in India

Gone are the days when applying for a business loan looked like a tough nut to crack. Due to the digital age and the government’s offers for “ease of doing business,” getting a business loan has become much easier. The write-up will guide you smoothly through the process. It will let you know about all the necessary factors. It would be best if you didn’t miss these while applying for a business loan in India. To turn your business idea into reality, you require funds. So, you are thinking of applying for a small business loan. You are puzzled by the numerous loan options as you search the internet. You must undergo a lot of paperwork and procedures while applying for business loans. You don’t need to worry anymore. Let us understand the important factors you shouldn’t miss while applying for business loans. [B-01] Which Loan Do You Require? This is the basic question to ask while applying for a business loan. Two business loan categories are working capital loans (cash credit and overdraft facilities) and term loans. Working Capital Loan This loan is for the operational activities of a business, like the purchase of raw materials, expenses for sales and marketing, product development costs, payment of salaries and wages, etc. These loans are generally available against collateral such as hypothecation of stocks, fixed deposits, immovable property, etc. Term Loan As the name suggests, these loans are repayable within a stipulated term or period. For example, if your business requires capital investments in the form of plant and machinery, equipment, vehicles, or the construction of a factory shed or office. In this case, the lender provides term loans to finance these capital costs. Hybrid Loan This is a mix of the above two loans. Depending on your business, you will need to figure out the type of loan that will serve you the best. For example, if you are a manufacturer, you may need to set up factory sheds and buy capital machines and equipment. Hence, you may opt for a term loan or a hybrid loan. You may not require capital machines if you are in the service sector. Hence, operational costs are the main factor. Then, the working-capital loan would be the best option. Decide the Loan Amount Check the loan amount you’ll need before applying for a business loan. It should not lead to a shortage or excess of cash. There’s an easy way to evaluate this. Create a complete budgeting statement. It should include your business’s anticipated annual running costs, capital expenditures, and any surplus cash you may have. This will give you a good idea about the fund, working capital, or capital cost needs. Moreover, it will help ensure that you are on the right path. Know Your Lender Different lenders offer different features. While applying for a small business loan or a larger one, it is better to be aware of the numerous terms and conditions. This will help you get the best deal. Here are some factors one should keep in mind: Interest rates play a significant role when choosing a business loan. Low-interest rates ensure lower EMIs, reducing the loan’s total cost. The interest rate also depends on the duration of the loan and the principal amount. Thus, these factors, too, have to be checked. Despite the low interest rate, the lenders may levy unreasonable processing fees and other hidden charges, thereby increasing the cost of borrowing. So, you’ll need to read the agreement cautiously to determine such surprising costs. Flexible Repayment Conditions: To maintain your creditworthiness, it is essential to repay the loan EMIs on time. Hence, choosing a lender that offers easy repayment options is vital. Application Process: Who doesn’t like a hassle-free loan? Online lenders often have a simpler application process as compared to traditional ones. They have the benefits of minimal paperwork, faster loan sanctions, etc. Piramal Finance has a simple application process that allows you to choose a business loan easily. Ensure a Good Credit Score A credit score is an assessment of the loan and interest repayment history of an individual. It is used to ascertain the creditworthiness of a person or business. If you borrowed loans from multiple institutions (personal or housing), the lenders would examine how well you had repaid them. The lenders generally rely on a CIBIL report (also known as a Credit Information Report) to determine your credit score. The score ranges from 300 to 900 points. A score above 700 is usually deemed good. Always ensure that your credit history is good before applying for a business loan. Other Factors There are several aspects a lender will examine before granting a business loan. It is vital to have some documents and information ready before applying for a business loan: Tax Returns Generally, the lenders will ask for the latest 3-year income-tax returns and the current GST returns. This helps them determine the financial performance and status of your existing business. The lenders examine the annual sales, the position of receivables and creditors, inventory valuations, etc. Hence, make sure these figures are correctly reflected in your financial statements. Project Report A project report is a blueprint for your business idea. The report will contain the exact nature of your business idea. Also, the marketability of your products or services and financial forecasts for the next 3 to 5 years The lenders will study the project report to determine the viability of your business. Hence, make sure the project report is realistic and detailed. Other documents to be submitted include a PAN card, address proof, business proof or trade license, rent or lease agreement, etc. [B-02] Summing up The demand for business loans is rising as start-ups and entrepreneurs increase. Hence, the above factors must be studied carefully while applying for a business loan. This will help you to get an ideal loan suited for your business. Several loans are available without any collateral or security. Piramal Finance offers non-collateral business loans ranging from Rs 3 lakh to Rs 10 lakh.
08-11-2023
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Home Loan

Complete guide on house loan emi calculator for beginners

A home loan is a substantial loan. It frequently lasts more than twenty years and keeps the borrower in debt until the principal loan amount and interest are fully paid off. Since it is among the most significant loans ever taken, one must assess their finances and affordability before applying for a home loan. To help you understand the nature of EMIs, you can use a free online tool known as the house loan EMI calculator. You can use the calculator as many as you like for no cost on most loan sites. Let’s look at what an EMI calculator for a home loan is, how to use one, and the many benefits of doing so before applying for a loan. [B-01] Factors Determining Your Home Loan EMI Here are some of the factors that determine your home loan EMI: Principal Loan Amount: The principal is the money you borrow. If you want to buy a home for 50 lakhs, enter your down payment and the borrowed amount. If you are able to repay a 25% down payment on a 50 lakh house, the principal loan amount would be 37.5 lakhs. Interest Rate: You have to pay interest on the home loan amount given to you. Each lender has a different minimum interest rate, which you can find on the website of the lender you’re interested in. When calculating home loan EMI, you must at least take into account the interest rate offered by the lender you select and plug in the numbers accordingly. Tenure: You must also put in the number of months for the loan. Since home loans are for large amounts of money, you can get them for anywhere from 15 to 20 years. But keep in mind that a long-term loan long term will have high-interest rates. House Loan EMI Calculator House loan EMI Calculator helps you figure out home loan payments or EMI. It’s an easy-to-use calculator that you can use to plan how much money is needed to buy a house. Equated Monthly Instalment is what EMI stands for. Repaying your mortgage entails both the principal and interest accrued up to the current balance. The monthly instalment might be reduced by taking out a loan for a longer period (up to 30 years). How To Calculate EMI On Home Loan The EMI formula is a method of calculating the monthly loan instalments for a home loan. It is calculated by multiplying the principal value, rate of interest, and the number of EMIs. The formula for EMI calculation is P x R x (1+R)^N / [(1+R)^N-1] whereP stands for the principal loan value, N stands for Loan tenure in months and R stands for monthly interest rate Your loan’s interest rate (R) is calculated monthly. Rate of interest (R) = Annual Interest Rate/12/100 If R is 6.2% p.a. then R = 6.2/12/100 = 0.005 Manually calculating the EMI using the formula can be time-consuming. A house loan EMI calculator can help you easily calculate your loan EMI. How Can A House Loan EMI Calculator Aid In The Planning Of A Home Purchase? The house loan EMI calculator provides a clear picture of the money that must be repaid towards the EMIs. It aids in making an informed decision about the monthly outflow toward the home loan. This aids in evaluating the loan amount available as well as calculating the personal contribution requirements and property cost. As a result, knowing your EMI is essential for calculating house loan eligibility and better planning your home-buying journey. Advantages Of A House Loan EMI Calculator There are numerous benefits to using the house loan EMI calculator tool: Simple Process: Only the home loan amount, interest, processing fee (if applicable), and duration should be entered. There are no hard calculations or challenging math. The house loan EMI calculator will calculate the rest. Obtain A Breakdown Of The Finance Charges: The EMI calculator helps you understand the financial expenses connected with your EMI, such as total interest payable and processing fee amount. Since they are shown as a percentage of the total loan amount by banks and financial institutions, knowing the actual value might help you comprehend the exact loan value. Choosing An Appropriate Tenure: Computing EMIs using a home loan calculator can help you determine the correct loan tenure. If you can pay a larger EMI, you can prefer a short loan term and pay off the loan as soon as possible. Otherwise, you can pay a lower EMI and extend the duration of home loans. Aids In The Validation Of Information: When discussing a home loan with your bank, you can confirm its repayment duration. The repayment table information provided by the home loan calculator might be helpful. Keep in mind that the figures can occasionally differ. This is because lenders may incorporate additional fees in their EMI calculation. Aids In Loan Management: When you have excess money beyond your EMI payment, you can use it to repay the loan principal. Use the house loan EMI calculator to review your finances and determine if and how making prepayments can impact your ability to repay the loan in full before the end of the term. Home Loan EMIs: Tax Benefits Taking out a home loan can be costly, but it has certain advantages, particularly when it comes to taxes. The government provides tax breaks on EMIs paid each year through the Income Tax Act of 1961. These are the following: Section 80C: Every year, you can claim a tax deduction of up to Rs 1.5 lakh on the principal value paid towards your property loan. Section 24: You can claim a deduction of up to Rs 2 lakh on the interest component you pay each year under this clause. Section 80EE: This section allows you to claim up to Rs. 50,000 in additional interest per year. This is in addition to the sums specified in Sections 80C and 24. Certain limits and conditions apply to this deduction. [B-02] Summing Up With a house loan EMI calculator, you can easily calculate the amount you need to repay for a home loan every month. It is a simple and free process that only takes a few minutes. To read more finance-related articles, check out the Piramal Finance website right away.
08-11-2023
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