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Tax

What is Value Added Tax and How to Calculate It?

All of you have probably visited a nearby market or store to purchase food and other supplies for your daily lives. The price you pay when making a grocery store purchase is not the one that has been issued as the item’s actual retail price. Each stage of the selling process is subject to value-added taxes. From the producer to the supplier, then to the retailer, and at last to the consumer, VAT is paid at each stage. So, it is important to do VAT calculations. Any form of taxation is when the government imposes fees on goods, services, and transactions. It is among the greatest powers that each government in a nation has. A variety of taxes, including VAT, are levied at different points during the sales of goods or services. The government earns money through these taxes. [B-01] What is VAT (Value Added Tax)? Value-added tax, or VAT, is a type of indirect tax that is charged on goods and services for the value added at every step of the production cycle, from the raw materials to the final retail sale. On April 1, 2005, VAT was put into place. Under it, at each step, the sum of value added is first calculated, and then tax is put on that amount. In the end, the full VAT is paid by the person who buys the goods, while vendors at earlier stages of the process get their tax money back. VAT is also called a consumption tax because the whole tax is paid by the consumer. VAT Calculation VAT is an indirect tax that can only be paid to the government by the companies that make the goods and services. Since VAT is not a direct tax, it is important to do VAT calculations correctly and precisely for a clear tax payment process. It is easy to calculate VAT: just subtract the input tax amount from the output tax. VAT = Output Tax Amount – Input Tax Amount This formula is a simple way to figure out VAT. You can also use an online VAT calculator to do VAT calculations. How An Online VAT Calculator Works You can calculate the VAT amount and the tax payable using the online VAT calculator. All you need to know to calculate VAT is the VAT rate. You can figure out exclusive and inclusive VAT with the aid of the online VAT calculator. Exclusive Of VAT The price you enter in this case is the actual cost of the good or service, without regard to any additional taxes. When you choose an exclusive of VAT, the formula below will be used to calculate the VAT rate. Taxable Value = VAT Rate/100 Inclusive of VAT In this case, VAT is included in the amount or price quoted. So it includes both the price of the product and the VAT. The VAT amount can be calculated using the following formula when the price given is inclusive of VAT: VAT amount = Value inclusive of tax *tax rate/ (100 + tax rate) Taxable Value/Price = Value inclusive of tax*100/ (100 + tax rate) What are Input VAT and Output VAT? The input VAT and output VAT concepts form a large part of the base of VAT. Let’s use examples to understand it. Output VAT Output Tax is the name given to the tax derived from the sale of products or services. Traders, for instance, sold goods for Rs 1,000,000 plus 5% tax. The 5,000 tax that A Traders has been collecting is an output vat. Input VAT Input Tax is the name for the tax that is paid when goods or services are purchased. For instance, a distributor sold goods to traders for 50,000 plus a 5% tax. The 2,500 tax that A Traders paid as an input tax. How is VAT payment calculated? Although VAT-registered businesses must pay VAT, this does not mean they must pay all of the VAT that was gathered from sales. The formula to use in calculating the VAT owed to the government is shown below. VAT Payment = Output VAT minus Input VAT Calculate the total output VAT that was received during the taxable period and the total input VAT that is eligible for reimbursement. Apply the formula above after calculating the input VAT and output VAT. The difference would be the amount of VAT due if the output VAT is higher than your input VAT. If the output VAT is lower than the input VAT, the difference will be reimbursed, and no VAT will be due as a result. Benefits of VAT Only a small number of nations classify VAT as a tax. Only a few nations, including India, treated VAT like a tax. Since goods and services are now taxed even at the local level thanks to the advent of VAT, a transparent system for paying taxes has been formed. Here are some of the many benefits of the Indian VAT system: The fact that VAT is charged at every point where goods and services are bought and sold makes it difficult for people to evade taxes, which helps in promoting transparency. A sizable portion of tax revenue is collected when VAT is applied consistently. It improves tax policy and closes the fiscal policy gap. Out of 193, a total of 160 nations use the VAT method for taxation. A good relationship with other nations is encouraged by the widely accepted tax system known as VAT, which promotes international trade. The process of paying taxes is made more effective and simple because VAT keeps a close eye on all transactions. [B-02] Conclusion One of the most efficient tax systems is VAT. As a consumption tax, it generates significant revenue for governments in developing and underdeveloped countries. Tax evasion is more difficult to avoid with VAT than with sales tax. It brings the country’s tax system into balance. It also ensures the process’s fairness and consistency. Also, you should calculate your VAT by using an online VAT calculator. For more details, you can visit the Piramal Finance website and explore their products and services.

08-11-2023

Electronics

Top 10 Benefits of Buying a Laptop on EMI in India

A laptop with a fast processor and enough RAM can help you complete your daily tasks more efficiently. You can work with more tabs, run multiple software, and even play games when bored on a good laptop. However, such laptops are usually pretty expensive. And forking out such a large amount of money at once can mess up your personal finances. To solve such issues, you should buy a laptop on EMI. Purchasing a laptop on EMI. This article will show you the top ten benefits of buying a laptop on EMI in India. Let’s get started! [B-01] You No Longer Have to Empty Your Savings When you buy a laptop on EMI, you don’t have to bring out a large chunk of money upfront. Instead of doing that, you can buy it first and settle the payment in multiple manageable EMIs. As the EMIs will be deducted from your registered bank account or your salary account every month, you don’t have to touch your savings. It Gives You the Freedom to Buy More Things The EMI option allows you to buy expensive items like laptops, refrigerators, or large-screen LED TVs immediately without having to pay the whole purchase sum. After all, no matter how large your salary is, it’s still limited. You might not be able to afford an expensive laptop for your child’s education needs with one or two months’ salary. The EMI option allows you to buy the laptop right now and still have money to buy other new stuff. This gives you the freedom to buy more things without putting too much stress on your finances. EMIs Have Flexible Repayment Periods Depending on an item’s cost, the EMI tenure can be set to any limit, ranging from 3 to 36 months. And most finance companies allow you to choose an EMI repayment tenure you are comfortable with. The longer the EMI tenure, the lower the amount of the monthly EMI is. As the laptop EMI can be smaller with longer repayment tenure, you don’t have to make big sacrifices to buy the laptop of your choice. You Don’t Have to Make Down Payments Taking loans from the bank to buy a laptop might require you to pay a set amount as a down payment. If you are availing of the EMI option from a good finance company, you can pay the whole purchase cost of your laptop via EMI. This way, you don’t have to spend a single cent from your pocket while buying the laptop. You Don’t Have to Go Through a Middleman When you pay for your laptop via EMI, the money goes directly to the lender. This way, the money you need to pay to purchase a laptop doesn’t have to go through multiple middlemen, increasing the overall cost of purchase. So, next time you make a purchase, make sure that you pay for the laptop via EMI (preferably, a no-cost EMI) to save money and avoid burning your whole salary on a single purchase. EMIs Go Easy on Your Wallet Thanks to the EMI option, you don’t really have to pay the whole buying cost or even the down payment from your wallet. You can talk to your financer and plan a solid EMI repayment tenure, distributing the total cost of the laptop over multiple months. This way, buying a laptop won’t put pressure on your wallet, and you can use the surplus money to invest in different investment options. You Can Improve or Build Your Credit Score If you just got a job a few months ago and have never used a credit card that is registered in your name, you probably don’t have a credit score yet. If it stays that way, you will have a hard time getting a home or personal loan in the future. Buying a laptop on EMI will allow you to slowly build or improve your credit score, which will benefit you in the future. You Can Make the Most out of the Seasonal Offers It’s no secret that many companies and e-commerce businesses offer huge discounts during festival sales. For example, during Diwali or Christmas, Amazon and Flipkart offer Prime day or Big Billion day sales that drastically slashes the MRP of many laptops. And these offers extend to the EMI options on those websites as well. For example, these companies may offer no-cost EMI during the festival season or may even offer discounts on the EMI itself. This way, you can get a super low laptop EMI that will save you plenty of money. You Get Quick Approvals When you buy a laptop on EMI using a credit or debit card, you can get EMI approval within a few minutes as long as you have a good credit score. You don’t have to take any extra steps, deal with confusing paperwork, or pay any upfront fees. The EMI request will be approved within minutes, and you can immediately take the laptop out of the store. It Allows You to Make Proper Payment Plans Let’s be straight. Without a proper money plan, your whole finances will be a mess. Purchasing a laptop on EMI allows you to calculate your repayment amount and tenure way ahead of the actual purchase. This will give you enough time to adjust the other expenses before purchasing your laptop. [B-02] Final Thoughts As you can clearly see, buying a laptop on EMI in India comes with multiple benefits. It allows you to plan your finances, save money, and it puts less pressure on your wallet. But before making any further plans, you must make sure that you qualify to secure the EMI option. You usually have to be older than 21 years old, have a stable inflow of money, and be an Indian resident to qualify. So, if you meet the criteria and want to buy a laptop, take the EMI option. Do you need quick yet reliable financial assistance even after going with the EMI option? Apply for a personal loan with Piramal Finance.

08-11-2023

How To?

Tips on How to Make a Career in the Stock Market

A stock market is a busy place where many people gather to buy, sell, or trade stocks. As long as you have proper skills and experience, working in a stock trading job can be quite a lucrative option. Do you love everything about stocks and how their values change over time? Do you find it intriguing to analyze different stocks and manage them? If you said yes to those questions, follow the steps we have mentioned in this article to build a solid career in the stock market. Let’s dig in. [B-01] How to Start Working on the Stock Market? Even though different stock market jobs require a different set of training and qualification, all of them need you to go through a few common things. If you want to work in these jobs, you must follow the steps below. Step #1: Complete Your Education An undergraduate degree in accounting, finance, or related fields might help you pave your path toward the professions related to stock trading. Some of these common undergraduate degrees include B.Com or BBA. What all these degrees have in common are math, statistics, and some form of qualitative analysis. A few companies also prefer to hire candidates who have an educational background related to management. Furthermore, completing a graduate (master’s) degree in finance, business, and other related areas will help you build a solid foundation for stock market jobs. Step #2: Join Specialized Courses in the Stock Market Joining specialized courses related to stock trading can help you land your dream job. These specialized courses often help you improve a specific aspect related to finance and trading. Some of the major specialized courses people pursue are: A finance and stock market-related diploma Courses regarding SEBI and NISM XV series Stock market technical analysis courses Research analyst diploma courses Equity dealer certification courses Courses related to fundamental analysis of the stock market Diploma courses in financial markets Please note that many brokerage firms in India desire candidates who have NISM or National Institutes of Securities Markets certification. Additionally, these specialized courses can also help you build a solid resume, making it easier for you to land your dream job. Step #3: Apply for SEBI (Securities and Exchange Board of India) Certification No matter what kind of job you want to pursue in the stock market, you will probably need a SEBI certificate. Once you complete your general education, you need to apply for a certificate of registration (CoR) via the SEBI web portal. Make sure you read all the criteria to submit the right documents to the SEBI portal. They will take a few days to review your application. Once they approve it, you will receive the acceptance letter along with your CoR. Only after receiving the CoR, can you start trading legally on behalf of your clients. Step #4: Get Your License The FIRA, or Financial Industry Regulatory Authority, needs every working professional who deals with stocks or securities to acquire a Series 7 license. On top of that, different states might need you to have different licenses to work in the stock trading industry. One state may need you to have a Series 63 license. Meanwhile, other states may ask you to get a Series 66 license before trading stocks. However, to get these licenses, you need to pass relevant licensing exams. Step #5: Further Your Study Many people often choose to get a master’s degree in finance and other related fields to boost their earning potential and skills. For example, you can go for the FRM or CFA courses and establish yourself as a financial risk manager or chartered financial analyst, respectively. Each of these courses is globally recognized and not limited to the Indian stock market. You can pursue a CFA certificate just by holding a bachelor’s degree. You don’t need to have any relevant experience before joining the course. On the other hand, FRM certification needs you to have at least a couple of years of experience managing a financial risk portfolio. You can choose to further your study in a stream that aligns with your end goals. Step #6: Create Your Resume and Apply for Jobs Once you finish your education, get a proper set of skills, and acquire the relevant licenses, you can start creating your resume using this information. While creating the resume, it’s best to focus on your skills and certificates. You should also provide relevant info about your higher studies. For example, if you have joined a project related to stocks or stock trading, tell more about it on your resume. You should also check the job description properly and make suitable changes in your resume before applying for the jobs. Picking out specific key phrases from the job post and adding them to your resume will help you make it ATS-compliant. This way, your resume will easily pass the ATS or applicant tracking system. Making these minor changes can easily help you pass the first round, landing you a chance for a job interview. Once you create your resume, you just need to start applying for jobs. If you do everything perfectly and ace the job interview, you can easily get your dream job. Major Career Options in the Stock Market There are many career options in the stock market. Here’s a list of some of the major jobs in this sector that you can choose from. Broker Portfolio Manager Research Analyst Financial Advisor Stock Market Analyst Investment Bankers Stock Traders [B-02] Final Words A stock market is an amazing place where many people work day and night to grow a country’s economy. And just like any other job, stock trading jobs also have many ups and downs. Whether you succeed or not depends on your own abilities. Do you believe that the stock market is the right place for you? If you do, follow the steps we have mentioned above to make a solid career in this industry. Visit Piramal Finance to learn more if you need a loan to boost your career in the stock market.

08-11-2023

Tax

A Complete Guide on Calculating Your Tax Liability

If you are paying taxes for the first time, you may not know much about calculating tax liability. The process of calculating tax liability is straightforward. It can take time to understand all the details. This article breaks down the calculation process into steps. The content highlights everything you need to know about calculating tax liability. Calculate tax liabilityusing the tax liability formula. Before getting into the details, let us understand tax liability. [B-01] What is tax liability? The Indian Government taxes your income every year. However, you only have to pay the tax at the end of the financial year. Tax liability is the amount of money you owe the Indian Government at the end of the year. Tax liability is a term usually used by businesses. This is the amount your business is expected to pay at the end of the financial year. Various factors are involved in calculating tax liability using the tax liability formula. Businesses can also reduce their tax liability. Claiming exemptions or tax credits under the respective clauses are some ways you can reduce your tax liability. When calculating your business’s tax liability, you need to consider all sources of income. This makes it confusing for many people to calculate tax liabilities. The tax liability formula is simple. How to calculate tax liability? 1. Determine your income. To calculate your salary income, you need all your salary slips. You will also need form 16S. Calculate all your allowances, bonuses and compensations. Most full-time employees are provided medical. But you may also receive others such as house rent allowance, travel expenses, etc. Deduct the exemptions that apply to you. You are also allowed a standard deduction of 50,000/- on your annual salary. Deferred tax liability does not apply here. 2. Calculate your income from other sources. Calculate the income you receive from other sources. For example, if you have rented out your properties, the rent is considered income. You can also add other similar incomes. If you rent one or more rooms on your existing property, you should include that in the income. For example, some businesses may rent out one or more floors in their office building. 3. Calculate your capital gains. Capital gains are the income you earn from selling shares, mutual funds, or bonds. Capital gains can be either short-term or long-term. Short-term capital gain is the profit you make by selling shares, mutual funds or bonds less than one year after purchasing. You can claim any deductions under Section 54 and its sub-sections that you are applicable for. The remaining amount is the capital gains income. 4. Calculate your business income. If you run a profitable business, calculate the net profit. Deduct the expenses and allowances from the net total. Refer to the applicable allowances under the clauses of the IT Act. Deferred tax liability is the net difference between the company’s income and earnings before tax. Subtract your earnings before tax from your company’s net income and multiply it by the expected tax rate. 5. Determine if you are missing any sources of income. After calculating all income sources, determine if you have missed any sources. For example, declare if you have received any additional money. If you have won a lottery, you should provide the exact figure. Similarly, you also need to include if you have received money as a gift. Providing the correct amounts will help you simplify the process of income tax filing. 6. Calculate your total income. Calculate your total income by adding all the values you have calculated in Steps 1 to 5. If you earn income from only one source (for example, you are a salaried person), then you need not calculate all these. All money you earn in the financial year should be declared when you file your taxes. 7. Deductions you can claim under chapter VI A. These are the deductions related to investments under Sections 80C to 80U of the Income Tax Act. It includes: Public Provident Fund (PPF) Equity Linked Savings Scheme (ELSS) National Pension System Fund (NPS) Unit Linked Insurance Plan (ULIP) National Savings Certificate (NSC) Voluntary Provident Fund (VPF) Life insurance policies Health insurance policies. You can deduct this amount if you invest in any of these schemes. Before deducting, calculate how much money you invest in these schemes per year. For example, you may have life insurance policies and health insurance policies but not ELSS funds. You can also invest in these funds to get deductions. The total exempt amount allowed is INR 1.5 lakh. 8. Calculate your net taxable income. Your net taxable income is the gross income (step 6) minus deductions (Step 7). The final amount is the final taxable income. The income tax rate on this amount will be according to the amount. You have to check the income tax slabs. 9. Determine your income slab. You have to determine your income tax slabs. Using this slab, you can calculate the tax liability. Before using the income tax formula, understand your slabs. What are the income tax slabs? In the table below, find your category. For example, if you are a senior citizen whose net income of INR 4,00,000, the income tax rate is 5%. Use your net income (amount calculated in step 8) to determine your income tax rate. Tax rates for Individual (resident or non-resident) less than 60 years of age anytime during the previous year are as under: [B-02] Tax rates for Individual (resident or non-resident), 60 years or more but less than 80 years of age anytime during the previous year are as under: Tax rates for Individual (resident or non-resident) 80 years of age or more anytime during the previous year are as under: Note: 1. The rates of Surcharge under the tax regimes are as under: Tax slabs help you determine which income tax rate applies to you. Once you have added the rate, this is the tax payable to you. For example, in the above case, you have to pay 5% of INR 4,00,000. That is, your total tax is INR 20,000. [B-01] Conclusion Calculating tax liability is not very difficult. However, you have to remember to include all deductions and income sources. If you are filing taxes without the help of an expert, go through all calculations and amounts several times before submitting. Using the tax liability formula may seem like a complex task for a first-time taxpayer. Consult a financial advisor to understand whether you have included the correct amounts. Piramal Finance has comprehensive and accurate information on taxation, investment, personal finance, business finance and more.

08-11-2023

Tax Savings

Complete guide on how to save Income Tax in India

Tax saving is crucial to anyone since tax laws regularly change in India. If you are an Indian taxpayer and need to save income tax, several methods can help you do this. Here’s the list of the top income tax saving tips in India to maximise your savings and reduce your tax liability this year. [B-01] Piramal Finance’s Tips to Save Income Tax in India Regarding saving income tax in India, Piramal Finance offers several good options. Some of these tips include investing in NPS, locking in funds with monthly SIPs and getting tax benefits on education loans. Tax authorities consider home loan interest and HRA exemptions as good income tax saving options. Invest in PPF PPF (Public Provident Fund) is India’s most popular income tax saving option. It is a long-term investment option and allows you to save up to 15 years. It also entitles you to earn a tax-free return on your investment. A deduction of 1.5 lakh can also be claimed under section 80C for the amount invested in PPF. Further, the maturity amount is also tax-free. It is a great way to save income tax while simultaneously creating wealth. The minimum amount you can deposit in PPF every year is Rs 500, and the maximum is Rs 1.5 lakh. The money deposited in PPF earns a fixed rate of 7.1% per annum and is compounded annually. The government of India decides the interest rate, which is revised every year. Invest in ELSS Funds ELSS funds are one of India’s most efficient ways to save income tax. ELSS funds invest in a diversified portfolio of equity and equity-related instruments. They provide investors with good tax savings benefits. These funds are entitled to a tax deduction in Section 80C. They offer an effective way to save income tax up to ₹1.5 lakh in a financial year. Apart from providing a tax advantage, ELSS funds offer long-term capital appreciation opportunities as they are exposed to equity markets. They have a lock-in period of three years. It means that investors can benefit from both short- and long-term capital gains. Also, the risk associated with ELSS funds is low to medium since it is based on stock markets. Get Health Insurance For Indian citizens, one of the most efficient ways to save on income tax is to get health insurance. Section 80D of the Income Tax Act in India permits individuals and HUFs to claim tax deductions for their health insurance premium payments. It is vital to note that only premiums paid toward health insurance policies are eligible for a tax break under Section 80D. Any premiums paid towards other insurance policies, such as life, motor, or travel insurance, cannot be claimed as a deduction. Having health insurance also helps to protect you and your family from urgent medical expenses. It can help to ensure that your finances are not adversely affected by an unforeseen medical need. Invest in Sukanya Samriddhi Yojana Sukanya Samriddhi Yojana is a scheme designed by the Government of India. It encourages parents to save for their girl child’s education and marriage expenses. It offers high-interest rates, tax benefits, and flexible investment plans. This scheme is a great option to save income tax in India. Parents can open an account in the name of their girl child and deposit a minimum of Rs.250 every year up to a maximum of Rs.1.5 lakhs. The account matures after 21 years, and the withdrawals are tax-free. The amount sent into this account is fit for deduction under Section 80C for a maximum of Rs. 1.5 lakhs in a financial year. It reduces your taxable income and, thus, lowers your income tax liability. In addition, the interest earned from this account is also exempt from income tax. Use NPS to save taxes The National Pension System (NPS) is an effective way to save taxes in India. NPS offers an attractive tax benefit under Section 80CCD(1). This tax-saving provision enables the taxpayers to claim a deduction of up to 10% of their total income or Rs. 1,50,000, whichever is lower. It makes NPS an attractive option for taxpayers looking to reduce their overall tax burden. NPS offers many investment options, allowing individuals to build a portfolio that suits their needs and risk profile. Investors can choose from asset classes, such as equity, fixed income, government bonds, and corporate debt. As per your risk appetite, you can create a balanced portfolio to maximize your returns and minimize your risk. Apart from the tax benefit, NPS offers other benefits as well. It allows you to withdraw up to 60% of your savings at retirement. Then you can use it for any purpose, including medical expenses and a house. The remaining 40% has to be invested in annuity products. This will provide you with regular income during retirement. [B-02] Conclusion Saving income tax in India is a crucial task. Proper planning and the right steps can make it simpler and more effective. By taking benefit of tax deductions, exemptions, and credits, you can reduce the taxes you owe each year. Investing in a PPF or ELSS scheme is an equally good way to save on taxes. Additionally, keep track of your financial transactions, file your tax returns on time, and ensure you are up-to-date on the latest changes in income tax laws. For more information about how to save income tax in India, check Piramal Finance. They offer many articles and blogs that will help you learn newer finance skills to save on your taxes.

08-11-2023

How To?

All you need to know about meaning and how to calculate amortization?

If you dream of being a homeowner, you may have considered taking a loan at an affordable interest rate and with a convenient repayment mode. This financial situation may have led you to research and search for countless lenders. At this stage, it is important to understand all aspects related to amortization. If you are going through this process, this article explains amortization, how to use a loan amortization calculator and the importance of understanding these details when it comes to your loan repayments. [B-01] What Is Amortization Amortization is a widely used term in the world of banking and finance. It is an accounting method used in the course of loan repayments. Amortization is explained as a process in which the loan is paid off in regular instalments until it is fully repaid by its maturity date. Purchasing a home, buying a car, or studying abroad are some large expenses. These expenses require lump sum payments upfront. But for those who do not have access to finances, a loan is a great option. The loan that is taken is spread out in equal portions to be repaid over a time period that includes the money borrowed and the interest. What Is An Amortization Calculator The loan that you take needs to be repaid in regular instalments until the loan debt is fully repaid. An amortization calculator is a tool that helps to estimate the periodic instalment due on a loan based on a standard formula. An amortization calculator helps assess and spread the loan amount in equal portions over a period without burdening the borrower and preventing the lender from losing any money. What Is An Amortization Schedule An amortization schedule is a chart that details or breaks down the loan amount into instalments. It also includes the interest that needs to be paid over the full term generated by the amortization calculator. An amortization schedule details the principal balance, the interest charged to the borrower, and the remaining amount to be paid. This gives the borrowers an idea of how much they have to repay. The Parameters Of An Amortization Schedule There are three parameters that an amortization schedule depends on for the fair division of loan amount. These are: The loan amount The tenure of the loan amount The interest rate How Is Amortization Calculated Amortization is calculated following a standard formula that is used by financial institutions when lending money to their borrowers. The formula for amortization calculation is as follows: A= P i (1+i)^n / (1+i)^n-1 Where: A = periodic payment amount P = principal amount n = total number of payments i = periodic interest rate The formula above stands true only for yearly calculations. While calculating monthly payments, the periodic interest rate (i) should be taken as i/12. Several amortization calculators that are available online follow the formula above to arrive at the result. What Loans Come Under Amortized Loans? Most types of loans come under amortized loans, including vehicle, student, personal and mortgage loans. These are calculated based on a mortgage amortization calculator. The borrower clears the outstanding balance by paying off a series of payments. This includes a portion of the loan amount and a certain percentage of interest. How Does Loan Amortization Work? If you have made up your mind to take a loan for your financial commitments, you might be thinking about how the amortization process will take place. Suppose you have taken a loan of Rs. 30,00,000 for a tenure of 25 years at 5% interest per annum. Here, you will be required to pay around Rs. 17,567 a month, approximately. The principal amount of Rs. 30,00,000 will amount to Rs. 52,00,000 in total by the end of the term, which includes the interest of Rs. 22,00,000 as well. This means the regular payment of Rs.17,567 a month for the next 25 years will clear your debts. It is important to note that the above calculation may not stand true with every financial institution. Benefits Of Amortization Loans Years before the mortgage amortization calculator was devised, people had to pay a large chunk of money to buy homes or personal vehicles. Even if they took a loan, they had to pay half of the amount of it, and another half was to be paid in a span of 5 to 7 years. The emergence of financial institutions following loan amortization calculators to disburse loans has brought great relief to many people. Loan amortization is a great way to track the portions of the loan amount that needs to be repaid. It helps the borrower make informed decisions about the financial institution from which they want to take the loan and understand the payment breakdown. Amortization of a loan with the help of a loan amortization calculator benefits the borrower. It helps them understand how the loan works and shows them the different parts of the loan. It offers a clear setup of the monthly payment without confusing the borrower. Calculating the different aspects in advance helps borrowers make an informed decision about taking loans. It also helps them plan their expenditure and other payments better. Furthermore, it prevents them from making payments earlier or even making any extra payments toward the loan amount. [B-02] Conclusion Taking loans has become common nowadays, as they help us make big purchases, which otherwise may not be possible. For getting loans, it is essential to understand how they work and what are the drawbacks of it, if any. A loan amortization calculator calculates the exact figures, and the schedule provides the proper breakdown of repayment of the loan amount. For more information on amortized loans and mortgage amortization calculators, visit Piramal Finance, for more helpful articles on making informed decisions regarding loans.

08-11-2023

How To?

Complete Guide On How To Claim HRA In Current Year

Are you a salaried person and want to claim your HRA in the current year? Here is a complete guide to applying for House Rent Allowance. But if you are a non-salaried person or your salary structure doesn’t have an HRA exemption, this exemption can also benefit you. If you are here, then you must already know about the tax benefits on rented commodities. It is the expenses that are given to the employee living in a rented house by his/her employer. Many people are unaware of the benefits of tax exemption from these expenses. Read on for a complete guide to claiming the HRA in current years. [B-01] What Is The House Rent Allowance? According to the Income Tax Act of 1961, section 10(13 A), along with the rule to 2A, a grant exemption of any house rent received by the employee from their employer subject to certain basic conditions. Sounds complicated? Let me explain in very simple words. HRA, or the house rent allowance, is a part of the salary given by the employer to their employees. It includes all the expenses incurred towards rented accommodation like house rent. So, you can claim the HRA exemption only if you are living in a rented house. You have to show your rent receipt or rent agreement papers to HR to take the benefits of the House Rent Allowance. What Is The Importance Of House Rent Receipts/Slips? The rent receipt is documentary proof of the transaction happening between the landlord and the tenant. So, you must submit your rent agreement document to the employer to claim the house rent allowance. Keep in mind that you will get tax benefits only if you pay rent of more than Rs. 3000 in a month. But what if you own a house but live in another city on rent due to work? In this condition, you can claim the tax benefits against the principal amount of your salary, and this is also beneficial if you have a home loan. Documents Required To File HRA Online The house rent receipt and the rent agreement are the most crucial papers you need to submit while claiming the HRA exemption benefits. If your annual rent is more than 1 lakh, the PAN number of the landlord is also required. If your landlord doesn’t have his/her PAN card, you are allowed tax exemption when your rent is less than 1 lakh. According to circular No. 8/2013, dated October 10, 2013, your landlord must sign a self-declaration form stating he/she doesn’t have a PAN card. Else it is a mandatory document to submit; otherwise, you will not get any tax deductions. The tenants paying NRI landlords need to deduct TDS of 30% before making the payment of the rent. So, these are the papers you need to avail of when filling out HRA online or even in offline condition. This will help you get an exemption in form-16 and avoid future problems when filing income tax returns. What If You Don’t Receive Any HRA From Your Employer? HRA is a part of the salary, but in some cases, it may not be included in your salary structure. Some non-salaried individuals might be living in other cities in rental houses. In this condition, section 80 (GG) of the income tax act offers help to claim the tax exemption on rent. But it includes some conditions that you need to fulfil to get eligible for tax deduction benefits. If you have a house in the city, you will not be able to claim the deduction. If you have your own house and living in another city, you can claim for HRA. There should be no house in the name of a Hindu Undivided Family (HUF), minor child, or spouse running his/her business in the city. So, these are the requirement if you don’t have any rent-related allowance in your salary or you are self-employed. Check these conditions before claiming any tax exemption from your employer to avoid any embarrassment. Requirements While Filing HRA Online In Your Tax Return You need to mention the salary amount in the declaration form provided by your employer at the start of the financial year to claim the exemption. If you are unable to claim through your employer, you can apply it through ITR-form online, filling out your tax returns. The tax department has now synced the ITR-1 with the form-16 to make the HRA exemption easier. Form-16 includes all the details of TDS (Tax Deduction on Sources) charged by the employer, along with HRA and other details. You need to submit this TDS certificate at the time of Income-tax return filling for tax benefits. If you don’t find any TDS documents from your employer, you can also submit rent-related documents like rent receipts and rent agreements while filing tax returns online. But people usually don’t have these documents in hand, which may create some issues. If you don’t have one, do not worry; you can still claim your House Rent Allowance benefits by manually submitting the rental amount in IT returns. [B-02] Bottom Line So, this is the complete guide on House Rent Allowance that you need to keep in mind while claiming in the current year. If you find any difficulty filing HRA online, you can consult a financial expert to help you out. A salaried person can get help from their HR or the employer and get all the documents required in income tax return filing. If you are self-employed or running your own business in other cities, consult experts for your HR Allowance benefits. Visit Piramal Finance to learn more about the HRA and its benefits. There are many articles and blogs that will help you improve your finance skills.

08-11-2023

Mutual Funds

Complete guide on how to do SIP investment

A SIP, or systematic investment plan, is a type of mutual fund investment scheme in which you invest a fixed amount periodically. The SIP investment has been quite popular among Indian mutual fund investors. A SIP allows you to invest money in a controlled manner without caring much about market performance and volatility. So, let’s see how to make a SIP investment and its benefits. [B-01] How to start investing in SIP: Investing in SIPs becomes relatively easy, once you understand how much and how often you should invest. For investing in a SIP, you will require an investment account with completed KYC. You can make your account KYC-compliant by submitting the documents to the investment agency. KYC process for SIP: Before beginning the SIP investment, you will require the following documents for a successful KYC process: PAN card Address Proof (Voter ID, Aadhaar, Electricity Bill, or Driving License) A passport-size photograph Chequebook (for bank details) Now that you have all the necessary KYC documents, it’s time to start the KYC process. Start by visiting the respective website where your funds are housed. Click on the eKYC process. Now, fill in all the required details, like name, DOB, and other information. You will be required to upload documents such as your PAN card, address proof, and photographs. Once you have completed the above-mentioned steps, go for the in-person verification. You will be required to ascertain your identity on a live video chat. You must show your PAN card on the webcam during the live verification process. Alternatively, you may also use your Aadhaar card for KYC verification. The Aadhaar verification option is an easy process. To use the Aadhaar verification option, follow these steps: Enter your Aadhaar number and request an OTP on the registered mobile number. Enter the OTP and click on “submit.” All essential details will be filled in automatically. However, if you have opted for Aadhaar verification, the yearly investment limit is only Rs 50,000. To increase the yearly investment limit, you must provide the PAN details. Once you have completed the KYC process, you can invest in any mutual fund scheme by registering for it. The registration process for SIP: After completing the KYC process on the platform of your choice, go for the SIP of your choice. For this, visit the website of the chosen fund house and locate the link for opening a new account. After clicking on the link, you will be taken to a new page where you must fill out the details and complete the registration process. You may also be asked to choose a user ID, password, and bank account details for automatic debit. After completing the registration process and receiving confirmation, you can start investing in SIPs. Select the right SIP plan for you: Choosing the perfect SIP requires some research and consideration. Before choosing a SIP mutual fund, you must consider factors such as your income, expenses, financial goals, and funds available for investment. Benefits of investing in SIPs There are several benefits of investing in SIP mutual funds besides being a disciplined way of investment. Let’s see some benefits: Rupee Cost Averaging: One of the best features of investing in SIP is rupee cost averaging. With this feature, you buy more units when the market is low and sell them when it goes up. Traders believe the rupee cost-averaging feature helps lower the overall investment cost. Moreover, it also lowers the risk of investing at the wrong time in the market. Flexibility: A SIP mutual fund gives excellent flexibility to investors. With a SIP investment, you can avoid investing in schemes such as the Public Provident Fund or unit-linked insurance funds. SIP investments are open-ended, meaning you can withdraw the funds at your convenience. Moreover, you can also withdraw partially or fully without incurring any financial loss. Start low and go with the flow. You can begin investing with as little as Rs 500 per month using a SIP investment plan. The investment amount is flexible, meaning you can increase or decrease it as you like. However, you must remember that the longer you invest, the more you will get. Higher Returns and the Power of Compounding: A SIP mutual fund creates wealth by compounding the principal investment amount. This compounding accelerates profit generation and helps you grow your portfolio. Moreover, compared to traditional investment methods such as fixed deposits (FD) and recurring deposits (RD), the returns from SIP are double. Types of SIP investments: There are 5 types of SIP investment plans; let’s see each of them briefly. Regular SIP: A regular SIP is the most basic form of a SIP investment plan. In this scheme, you can invest either monthly, bimonthly, quarterly, or half-yearly. Moreover, you can also choose the duration, amount, and frequency. However, once you have decided on the contribution amount, you can’t change it later. Flexible SIP: A flexible SIP, or “flexi SIP,” is quite similar to a regular SIP; however, you can change the amount of contribution whenever you want. Top-Up SIP: Also known as the Step-Up SIP, this plan allows you to increase the investment contribution at pre-decided intervals. Trigger SIP: A trigger SIP invests in a mutual fund only when a specific event occurs. The events could be anything from market movements to NAV. Perpetual SIP: A perpetual SIP has no fixed duration and goes on until you decide to stop contributing to it. You will need to send a stop instruction to the fund house to stop a perpetual SIP. [B-02] Conclusion: Investing in a SIP mutual fund is among the safest investment options. Investing in a SIP mutual fund may be your best option if you want to secure a safe future. However, check for the best SIP investment plans to get a better return before investing. Moreover, Piramal Finance has you covered if you are looking for a personal loan. You can get more financial information and insights from the Piramal Finance blog, so check out our financial blogs now.

08-11-2023

Business Loan

Salient Features of Business Loans in India You Should Know

Business loans are available to companies for a very long time. These loans may be used for anything, from expansion and cash-flow improvements to day-to-day operations and anything in between. The market is rife with many types of loans, and you should be able to find one for your needs by carefully evaluating the need for a business loan for traders before agreeing to take one out. If you need more money, consider looking into other financing possibilities. In India, there is a wide variety of business loans to choose from, each with its eligibility restrictions and suggested use cases. To simplify matters, we have included a brief overview of many common types of business loans for traders and their benefits. [B-01] Long-term borrowings A term loan entails a single, large upfront payment from the lender, which is repaid with interest throughout a certain period. It’s common sense that a small business with stellar credit would benefit from the lower interest rates and longer repayment terms of a term loan. There are a few situations in which you could want a term loan: For machinery and other equipment to use in the manufacturing activities. Investing in a new factory or land to accelerate or increase production. Means of diversification and growth via acquisition of a new company. Lending a firm the money for its daily needs. Access to credit for businesses Revolving credit allows businesses to borrow a certain amount of business loan as and when needed rather than all at once. The lending company might set a maximum amount. Withdrawals up to this limit may be made at any time to meet financial commitments or maintain operations. The built-in adaptability allows you to withdraw a predetermined sum without doing it all at once. Since you’ll only be required to pay interest on the actual amount borrowed rather than your whole credit line, you won’t feel as pressured to repay huge amounts. Equipment financing Equipment loans are lucrative for business owners for machinery, equipment, or commercial vehicles. The fixed asset itself secures the loan. Therefore, the necessary machinery, equipment or vehicle is leased and serves as security for the loan, making equipment financing a secured business loan for traders. If the lessee fails to make lease payments, the company may recoup its losses by selling the leased item. If there is a lot of debt or sketchy credit history and have problems obtaining the money to finance the purchase of an item, this is the best option for you. Paying invoices using money from finances If you’re especially in the industrial sector, you may need to give your clients generous credit terms and payment plans that spread out their payments over 90 or 180 days. It’s possible, however, that you’ll need to make a hasty payment to your vendors. You’ll need funds to keep operations running smoothly and fuelling expansion. With invoice financing, you may use your invoices as collateral for a loan. Capital expenditures on commercial real estate Commercial real estate loans are similar to funding for machinery or other equipment. While conventional mortgages are used to finance the purchase of residential properties, commercial real estate loans are used to finance the acquisition of commercial properties like warehouses, stores, and factories. The collateral for the loan is the company’s physical assets. Factors taken into consideration for a business loan When traditional lenders aren’t an option, you may utilize your funds or find angel investors to back your company. Get the business loan for traders’ application if you need it. You must follow several deliberate steps to apply for and get authorized for this loan. Lenders think about whether your business will bring in enough money to pay the EMI on schedule. Therefore, having a solid credit history and sufficient annual revenue is crucial. You should consider these three factors when asking for a company loan in 2022. Determine the amount of loan Spending on things like sales, growth, new product launches, marketing initiatives, and so on requires careful consideration of cash flow. Since these are questions the lender is likely to ask, answering them accurately is vital. You need to know the exact business loan for traders amount to know whether you’ll be short or over on funds. The latter might lead to increased loan rates, but the former will make it difficult to run your business. As different banks have varying maximum loan sanctioning limitations, knowing the actual amount can help you pick the lender. Researching the reputability of the lender and other viable possibilities You need to think about the following three things to get the best possible loan. Enterprises often choose conventional lenders despite their long application and approval processes and stringent eligibility standards. Consequently, the loan amounts will be distributed later than expected, and the procedure will be time-consuming and cumbersome. Nowadays, it is possible to get a loan from a non-bank lender, and many of them have streamlined online applications and few documentation requirements. The process of obtaining these loans via lending businesses is less complicated. Pick a business loan for traders that gives you some leeway in how quickly you have to pay them back. Making your payments on time is crucial to maintaining a good credit rating. Some businesses additionally put a premium on the EMI date because of its significance in the company’s cash flow cycle, payroll schedule, etc. In addition, if you go for a lender that offers prepayment options, you’ll be able to pay off your debts ahead of schedule. Consider the lender’s standing very carefully. Despite these limitations, online reviews may be used to evaluate a lender’s reliability. If you go with a poor lender, your business assets and funds might be at risk. Time required for financial transactions It’s important to shop around and see how long it takes different lenders to credit your loan. Disbursement times vary among lenders. Some recipients may apply for funds instantly, while others may take days, weeks, or even months. Verify if it satisfies the standards of your organization. Finding a lender who can accommodate your timeline is important for immediate requirement. [B-02] Conclusion There has been a dramatic improvement in the availability of business loans over the past decade, and thanks to the proliferation of NBFCs that provide such loans to companies at advantageous rates. An eligibility calculator for a business loan for traders will help to determine how much of a loan you might get based on your income after taxes. You may adjust the monthly EMI, interest rate, and loan term using an online business loan eligibility calculator. You may consult an expert from Piramal Financing House, a reputed institution, if you have any doubts, and they are willing to guide you.

08-11-2023