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The Smartest Investment with the Highest Returns: Options for the Best Investment Plan in India

Nothing can beat a smart investment strategy. And investing your hard-earned money to enjoy a higher return is pretty sensible indeed. However, you must make the best investments that ensure a stable return without much risk. Now, the question is where to invest. For starters, there are tons of investment options wherein you can apply and reap the benefits in the form of returns. But, deciding and picking one option is rather daunting. This is why we are here to help you! Let’s discuss some of the most lucrative options for the best investment plan. Keep scrolling to know the options. [B-01] Top Choices for the Best Investment Plans in India Long-term Plans Take a look at the long-term investment opportunities ranging between 7 to 10 years. Direct equity It is a no-brainer that more risk fetches you higher returns. A direct equity market is a risky option, but the extent of returns it can give is amazing. Investing in direct equities is one of the most popular investments people pursue. In this, the prices of some stocks may go up steadily and even fall at once. So, it is essential to think and invest in the shares of reputed organizations. Though, 100% accurate prediction is impossible. In that case, you must have the heart to bear losses if you want to enjoy the returns of equity investments. Gold Gold is the safest asset to invest in nowadays. It is a good option even during times of financial crisis. A common symbol of wealth, this yellow metal can give great returns to its investors. If you buy gold physically in its metal form, you need to bear the expenditure of making charges. So, you have the option to buy this asset through exchange-traded funds or mutual funds nowadays. Gold is an investment worth considering since it doesn’t allow inflation to affect it drastically. Small Saving Schemes Small saving schemes can take you a long way in terms of financial strength and stability. Public Provident Fund, Kisan Vikas Patra, and the Senior Citizens Savings Scheme are some of the best options for a safe yet smart investment. Though the returns may not be as high as options like equity, it bears zero risk. PPF and NPS (National Pension Scheme) are two plans that focus on aiding you financially post-retirement. Also, ULIPs are a mix of investment and life insurance. In this, you can also invest some part of your premium in assets. Medium-term Plans Below, we have listed the investment avenues to cater to your financial goals. They are about 3 to 5 years long. National Savings Certificates The post office National Savings Certificates (NSC) are safe investments focusing on financial goals of about 3-5 years. They work just like regular fixed deposits in banks. The key difference is that the amount is payable only at the end of the entire period, which is termed maturity. NSCs are promising investments since the Indian government backs them. The rate of interest you can expect is 6.8% per annum. So, if you are ready to block your funds for as long as 5 years, NSC is for you. Post Office Time Deposits Products offered by the post office are considered to be safe and trustworthy. This is because the Government of India supports them. These time deposits are just like bank fixed deposits. Many invest here because they usually offer better interest rates than banks. Furthermore, there is almost no risk involved in investing in post office time deposits. You can lock your money for short periods. Also, you can even let it grow over a longer time. Medium-Term Debt Funds There is a huge list of options when it comes to debt funds. Each type carries different leverages, like returns and the plan’s tenure. Therefore, you need to research and decide on the best investment plan in case of debt funds that matches your needs. We give you three categories between excessive and zero risk for a medium-term plan. They are the Short Duration Fund, Banking & PSU Fund, and the Corporate Bond Fund. Banking & PSU funds lend to public sector companies and banks. On the other hand, Corporate Bond Funds deal in shares of private companies. Short-term Plans The following choices serve the immediate financial needs you must fulfil within a year. Bank Fixed Deposits Fixed deposits are the most common and safest investments, period! In this, you deposit a certain sum of money and lock it into an FD account for a specified period. By the end of the tenure, you get to enjoy the principal amount and accumulated interest over the years. However, it has the disadvantage of blocking your funds for that lock-in time. You must bear a penalty if you need to withdraw your money before maturity. Also, the post-tax fixed deposit returns cannot beat inflation. Short-Term Debt Funds As we’ve mentioned earlier, debt funds are available in different types—each of the three caters to a certain need. Short-term debt funds are meant to support your immediate financial needs. In this case, the three options that suit well are Liquid Funds, Money Market Funds, and Ultra-Short Duration Funds. One advantage of these investments is the low risk they carry. Additionally, you don’t need to block your money for much longer, like in the case of fixed deposits. Money Market Funds focus on investing in highly-liquid instruments. Ultra-Short Funds allow you the option to invest for as less as 3 to 6 months. [B-02] To Wrap It Up If you were clueless about the best investment plan in India, we are sure you got that out of the way. Remember that the right investment can take you way ahead financially and allow you to reap its benefits to the fullest. Don’t forget to check out Piramal finance for more detailed and in-depth insights on every kind of financial service and product, from personal loans to investments in stocks.

08-11-2023

Tax

New Income Tax Rules for NRIs

Almost 30 million NRIs are living across the world in countries mainly Canada, Singapore, the UK, the USA, and more. There are certain new rules introduced for Income Tax for NRI as per the Finance Act 2020 and 2021. [B-01] What Is the Residential Status as a Part of Income Tax Rules for NRI The criteria of residential status concerning NRIs is determined under Section 6 of the Income Tax Act, 1961, Income tax rule. It includes an income threshold of Rs 1.5 million which is considered for determining whether an individual gets residential status in India or not. From When the New Income Tax Rules Are Effective The new income tax rules for NRI became effective from Financial Year 2020-21. The government has introduced new rules to simplify the tax reforms for NRIs in India. Rules Implemented NRIs are mainly Indian citizens residing abroad and persons of Indian origin who visit India for less than 182 days in the whole financial year. But as per new income tax rules, the government reduced the tenure from 182 days to 120 days for all those NRIs whose annual income exceeds Rs 15 Lakhs. At present, the government has asked NRIs to fill ITR 2 and ITR 3. But at a later stage, they are planning to introduce voluntary compliance for NRIs by making simple ITR forms for them. What Does FEMA Say? As per the definition laid down by FEMA (Foreign Exchange Management Act), an NRI is liable to pay tax in India if only they spend a minimum of 120 days in India. The taxation is determined, and the Income Tax Department calculates whether the NRI has stayed in India for a minimum of 365 days in the last 4 years from the present financial year. If they are meeting the above mentioned criterion, an NRI can hold the residential status and become liable to pay taxes. If you are a resident of India, then the global income is taxable in India as per new income tax rules. If you are a non-resident Indian, then only the income you are generating in India is taxable. Other Rules Introduced for NRI as per the Finance Act 2020 and Finance Act 2021 As per the Finance Act 2020 and Finance Act 2021, a few more rules were introduced for NRI. Here’s a list of them. Double Tax Avoidance Agreement The Double Tax Avoidance Agreement is also known as DTAA. It is a treaty between countries so that an NRI doesn’t have to pay double taxes on earned income. If you already pay taxes in India, then even if you are residing outside India, you don’t have to pay taxes in that country. There may be a difference in tax slabs, in that scenario, you are required to pay the difference as residual taxes in the country where you are living. For example, if you are required to pay 20% tax in the USA on an income of 16 lakhs. There may be a possibility that India is charging 15% on the same income. But this does not mean you are exempted from the 5% tax. You have to pay the difference as residual tax in the USA. In case, you are residing in the Gulf region, there are no taxation rules, in that scenario, even India cannot imply tax on your earnings. The Documents Required to Avail of Tax Benefits Under DTAA as Part of NRI Tax Have a look at the important documents required to avail of tax benefits under DTAA as a part of NRI Tax. Self-attested PAN card copy Self-declaration indemnity format Self-attested passport and visa copy Tax residency certificate Important Facts to Know An Individual cannot claim any benefit of relief under a double taxation avoidance agreement without submitting a tax residency certificate to the deductor. For obtaining a tax residency certificate, you are required to apply Section 90A and Section 90 of the Income Tax Act, 1961. Once the application is completed, you will get a tax deduction certificate which will be issued in form 10FB. NRI Income Tax Slab Rates The income tax slab rates of NRI TAX are diversified according to the earnings of the individual. The NRI Income Tax is the percentage of the annual earnings of an individual. Here is the Income Tax Slab of NRI Income Tax SlabTax RateUp to 2.5 LakhsNIL2.5 Lakhs-5 Lakhs5%5 Lakhs – 7.5 Lakhs10%7.5 Lakhs-10 Lakhs15%10 lakhs-12.5 Lakhs20%12.5 Lakhs-15 Lakhs25%15 Lakhs and above30% Tax Exemptions for Non-Resident Indians at the Time of NRI Tax Here’s a list of exemptions for non-resident Indians at the time of NRI tax: The salary getting from a job in India, fixed deposits, capital gains, and income earned from a savings bank account all are taxable in India. Any Income that is earned outside India is non-taxable. Any interest earned from the FCNR or NRE accounts is tax-free. Many NRIs are engaging in buying and selling immovable properties in India. Sometimes gifted to them by their parents or inherited themselves. In case an NRI is planning to sell the property, the buyer in that scenario will deduct 20% TDS. As a seller, if NRI wants the buyer to deduct TDS on the capital gain amount, he or she is required to apply for a lower tax deduction certificate from the Income Tax Department of India. An NRI can claim tax exemption under Section 80G of the Income Tax Act for making donations. One can claim tax exemptions under Section 80TTA for interest earned on a savings account is INR 10,000. Getting any long-term capital gains on the property being NRI for 36 months is usually taxable, but one can claim NRI tax exemption if one buys another property in India or purchases any bonds. Deductions that take place according to Section 80C of the Income tax act are tax exempted. Life insurance Premiums, payment of tuition fees, loans taken from India, investments made in ULIPs, or any deductions from house property income are part of Section 80C. [B-02] Bottom Line The Non-Resident Indians are also required to follow the tax norms defined under Income Tax Act 1961. The NRI tax covers every aspect of taxation rules be it property tax, wealth tax, or income tax.

08-11-2023

Other

Learn the basics of Margin Trading

Have you ever thought of how exactly margin trading works and how you can use it to your benefit? With this article, we aim to answer all the questions about margin trading and define margin trading for you. Before we move to margin trading and all about it, let’s first understand what margin means and how is margin trading defined. A ‘margin’ is known as the equity amount of an investor. Buying with margin or to margin refers to using a sum that a person may buy from a broker to buy or invest. Through this method, an investor can buy and invest in more things than the initial sum in their account. A margin account is made for the broker, which lends the investor the money needed to buy more securities. Smart use of margin in buying can give you more financial stability and security. At the same time, the initial sum in your account acts the same way as collateral for a loan. The losses and profits that involve margins are often felt in excess. [B-01] What is margin, and what is the definition of Margin Trading? Margins are often used when buying securities that provide more financial benefits and profits than the interest that needs to be paid. Margin trading refers to buying stocks that one may not be able to afford. The broker then pays the margin to buy that particular stock or security. With regards to investors, Margin Trading helps them hold more stocks and places within the market. These may add to the places in the market, they owned before. In the matter of margin trading, investors are free to buy an investment or security by paying only a certain amount of the actual value, the rest of which is paid by the broker. Margin trading helps the investor earn a higher profit. Losses, if experienced by the investor, are also excessive due to margin trading. The margin is then returned with interest to the broker when the profits are earned. Margin trading also proves very helpful when an investor hopes that the investment’s earnings, i.e. the ROI, is more than the interest paid on the loan amount. Why Margin Trading is Good In simple words, if an investor has an initial margin need of 70% for their margin account and wishes to buy securities worth ₹10,00,000, then their margin would be ₹7,00,000 and the rest, i.e. 30% or ₹3,00,000 could be borrowed from the broker. Margin trading can prove profitable in the following ways: Flexible Trading: Flexibility in trading is possible when an investor can expand and look for more investment opportunities, even with a limited amount. This can, to a great extent help investors if they take up timely market opportunities and invest in them. Expand and diversify the portfolio: Margin trading helps an investor diversify their portfolio. This can be done when the investor holds a lesser stock position and can use the margin buy. Simplify the process: No extra fees or paperwork is needed to use margin trading. Tax deductions: Margin loans need a certain interest rate set by the broker and the investor. These interest rates may be deductible as taxes against the income from the investor’s net investment. Taking the help of a tax advisor can prove helpful in this case. Increase in current income: Cash inflow is more, in turn increasing the investor’s current income. Risks involved in Margin Trading Some risks that come with margin trading are: Bigger losses: Margin trading may have big losses as it involves investment by more than one person too. More charges: The investor may need to pay separate charges in the form of interest and account fees. Margin calls: Margin calls are made when a Margin account runs out of some account balance. This is common with trading accounts that incur heavy losses due to an investment. These also need more investments to ensure some account balance is always maintained. Liquidations: Suppose an investor fails to keep their end of the bargain and maintain the agreement. In that case, brokers are given the right to take any lawful actions like liquifying the investor’s assets to cover the sum of the margin first paid by the broker. Some practices to adapt during Margin Trading While there may be risks that come with Margin Trading, here are three things that can help one gain from Margin Trading: Be picky about investments: Investing wisely is an essential part of margin trading. One must be careful as losses and profits are affected by margin trading. Investing wisely refers to investing in opportunities that will provide a larger ROI than the investor’s interest amount on the loan. Margin calls must also be considered when investing in opportunities. Start small: When margin trading, an investor must be mindful not to borrow the full amount limit from the broker. The investor must try testing the investment with a small amount first, calculate their profits and then decide whether to continue the margin trade with the broker or not. Consider the period of the margin trade: Margins are like loans; an investor must pay interest on the amount borrowed from the broker. Margin trading for a shorter time to avoid paying high interest on it is viewed as a best practice for financial profitability. [B-02] Final Thoughts By now, you must have gained a better understanding of margin trading. When margin trading, it is best to plan and look for profitable investment opportunities. Market knowledge and expertise are also good add-ons. Financial experts at Piramal Finance are trained to provide guidance and help one make the best decisions to help achieve their financial goals. Make sure your financial knowledge is up to date on essential services and products, such as personal loans and stock trading, by reading the informative blogs on our website.

08-11-2023

Other

All you need to know about ATM pin generation

A 4-digit ATM PIN is for purchases at an Automated Teller Machine (ATM). The bank gives the PIN and expects it to be changed and kept secret by ATM card users. You can change and create a new ATM card PIN as you wish. A PIN is a short form for a personal identification number, which is unique to each ATM card. This PIN code verifies that the cardholders are paying out the transactions and that they are genuine. You can divide ATM PIN generation into two categories: those using actual paper mailers and those using green PINs. Green PIN encompasses the creation of ATM PINs via SMS and net banking. [B-01] How to Generate an ATM Card PIN After the bank sends you the temporary PIN, you must go to an ATM to get a new ATM card PIN. Paper mail with temporary ATM PIN codes Banks send account holders or cardholders a sealed letter with the PIN. It might come with a welcome package that includes all bank paperwork, such as passbooks and account information. Banks may deliver the initial ATM card PIN separately in a paper pin mailer. Use the ATM card and enter the temporary PIN to log in. Banks will issue a one-time password (OTP) to the registered mobile number. You have to put in information like your bank account number or a mobile phone number that is registered with the bank. Once the request is verified, you may generate the 4-digit PIN. You can re-enter the updated ATM card PIN. Your ATM PIN generation is complete, and you may use it to execute ATM transactions. SMS delivery of a new ATM card PIN via Green PIN The other option is to use a green PIN to go paperless. Banks transmit an ATM PIN code via SMS. Banks are using green PINs to address environmental issues and improve security. It saves paper and time, and bank workers are not responsible for the physical care of the printed mailers. You may receive a new PIN text on your registered mobile number after a few hours of receiving the ATM. A green PIN might be a PIN or an OTP that expires in a few minutes. For PIN generation, follow the procedures below: Insert your card into the nearest ATM. Once you have selected the language, you may choose ‘Forgot/Create PIN. You can provide information such as your account and registered mobile phone number. You may also be asked to choose between “generate OTP” and “validate OTP” at some bank ATMs. An OTP is given to your registered phone number after you are verified. Enter the OTP, and you will be allowed to generate a new four-digit PIN. Set up a new PIN and confirm it before using it for future transactions. Using the Net Banking option Net banking allows you to generate your ATM PIN from the comfort of your own home. You do not need to visit a local ATM to finish the transaction. You must have online banking enabled on your bank account to generate ATM PINs using net banking. You can either sign in to the online banking site or the phone app, or proceed as follows: Enter your username and password to access your account. Then, under the “e-services” tab, pick “ATM card services.” Look for the phrase “ATM PIN generation.” You will have two options: a one-time passcode (OTP) or password. Choose one of these PIN generation options. The OTP choice will send a code-encoded message to your registered phone number. Enter the amount in the appropriate column. Choose the bank account to which your ATM is connected. Then click ‘Continue.’ Now choose the ATM card. Enter the first two numbers of the new PIN. The last two would be through SMS to your mobile number. Enter the two numbers you chose before and the two numbers you got through text on your registered number. To generate your ATM PIN, click “Submit.” The procedure for changing an ATM PIN using a personal PIN is nearly the same. However, new SBI cardholders may only generate a PIN using net banking after registering the card via the “ATM Card Services” link under the “e-services” option. An Introduction to Personal Identification Numbers Personal identification numbers are usable with debit cards connected to a person’s bank account to give additional protection. When a person receives a card, they must select a unique PIN that they must input every time they want to withdraw cash from an ATM and, in many cases, when they make a payment at other merchant businesses. PINs are similar to passwords in several other applications, including home safety and mobile phones. A PIN is any number used to check a person’s identification. Personal Identification Numbers and Card Security PINs are six digits long and are frequently sent to cardholders in addition to the associated card or input at a local office when creating an account in person. When selecting a PIN, it is best to choose one that is tough to guess yet simple for the account owner to remember. Simple PINs or numbers that are easy to predict are not tolerated. Account holders must use extreme caution when sharing or releasing information. Personal Identification Numbers and Electronic Transaction Processing Digital payments with vendors are slightly more complicated than ATM transactions. As a result, by demanding an extra layer of verification from the buyer, the use of a PIN can make transactions safer. PINs are usually needed as the final step in a payment, granting a retailer permission to accept a payment card. Once a card gets verified for processing, communication is sent to the retailer’s acquiring bank, which allows payment settlement. [B-02] Conclusion After receiving an ATM card and a PIN from the bank, you must establish a new PIN. It increases security because the PIN is only known to you. You must also update it over time for security reasons, so if someone mistakenly learns the PIN generation, they cannot misuse the ATM card. Read more related blogs on the Piramal Finance website to explore our financial products and services, especially if you need any help with personal loans, credit cards, or financial calculators.

08-11-2023

Tax

What Is The Tax Rate On Gold Investments In 2022

Gold investment has sentimental value for all of us. You always bought gold jewellery and coins on festival occasions. Your wife also received some gold as Stree dhan at the time of your wedding. Traditionally, you invest in gold in the form of jewellery or gold coins. Nowadays, you can invest in gold in different forms. Apart from physical gold, digital gold, sovereign gold bonds and gold mutual funds, gold ETFs etc., are also available. Youngsters today prefer to invest in these other forms of gold rather than physical gold. For most people, gold investment is a safe option with stable returns. Returns of other assets like equity and bonds may fluctuate a lot. Gold investments are subject to a gold tax rate. [B-01] What Are the Types of Gold Investments? You may invest in different kinds of gold investments. These include:- 1. Physical Gold like Jewellery and Gold Coins You gain returns on this type of investment through capital appreciation in the market price of gold. 2. Digital Gold You may invest in this type of gold through online e-wallets like Paytm, Google Pay, etc. You invest in 24-karat pure gold online. The gold is held in secure bank-grade vaults. You buy pure gold at market rates. You can make investments as low as Re 1. You can redeem at maturity either in cash or in pure gold. You pay a one-time levy of 3% GST. You can sell at any time after 72 hours. You earn returns through capital appreciation. 3. Sovereign Gold Bonds (SGBs) These are gold bonds issued by the government. These bonds pay an interest of 2.5% p.a. Your investment in sovereign gold bonds matures after 8 years. You may redeem these bonds at maturity. You will realise the market value of gold. You do not have to pay making charges for this type of investment. 4. Gold Mutual Funds These are mutual funds investing purely in gold. You invest and redeem at the Net Asset Value (NAV). The NAV is calculated based on the market price of gold. You need to open a Demat account to trade in gold mutual funds. 5. Gold Exchange Traded Funds (ETFs) You can trade in Gold ETFs through a Demat account that you open, online or offline. The NAVs of the ETFs depend on the market value of the underlying gold investments. You can trade these investments like equity shares. What Are the Different Gold Tax Rates? The tax on gold that you pay depends on the nature of your investment. The taxation method differs depending on the underlying gold investment. The different gold tax rates are as follows:- 1. Tax on physical gold When you sell physical gold, you pay short-term capital gains or long-term capital gains tax. If you hold physical gold for less than 36 months, you pay short-term capital gains tax. This gold tax rate is calculated according to your income tax slabs. In case you hold physical gold for more than 3 years you pay long-term capital gains tax. The long-term tax rate on gold is 20% tax of your return + surcharge at the rate which applies to you + cess at 4%. Before this gold tax rate is calculated, indexation of the gold price from your purchase date is done. Indexation calculates the effect of changes in the Consumer Price Index between your sale date and purchase date. The appreciation/depreciation in the CPI Index is used to adjust your purchase cost. This becomes your effective cost of the purchase to calculate the net return percentage after tax on gold. At the time of your purchase of physical gold, GST is added to the purchase price. 2. Digital Gold In the case of your investment in digital gold, the gold tax rate applied to your return depends on your holding period. Suppose you held the investment for less than 36 months. In this case, your returns will be taxed at your applicable slab rate. If you held the investment for longer than 36 months, your tax on the gold rate is 20.8% (tax rate of 20% + cess at 4%). Indexation will be applied to your cost of investment. Your return will be calculated after adjusting the effect of any changes in the CPI Index. The tax on gold investments rate is 20.8%. 3. Tax on gold held in mutual funds and Gold ETFs The taxation policy on both these investments is similar to the taxes you pay on your physical gold holdings. When you hold for less than 3 years, you will be taxed at your applicable slab rate. When you hold for a longer period beyond 36 months, you pay taxes on your gold investments at 20% + surcharge + 4% cess on your returns. You pay fund management charges which vary between 0.5% to 1% p.a. of your gold investments at 20% 4. Tax on Gold held in the form of SGBs If you redeem your investment in SGBs before 8 years but after 5 years of holding them, you pay long-term capital gains tax according to the following formula: 20% +4 % Cess. You also get an indexation benefit. There is no tax on gold investments in SGBs after 8 years. The interest you earn on SGBs is taxable under the head ‘income from other sources’. You are taxed on the interest income at your applicable income-tax slab rate. Return Calculation With Indexation Example Let us say that you purchased gold in 2013. The CPI Index level was 104.6. You sold your gold investment in 2019. The CPI Index in 2019 was 141.1. The purchase value of your gold investment in 2013 was Rs 50,000. The growth in the CPI Index is 34.89% during this period. Your adjusted cost after indexation is calculated a: 50000X (1.3498) = Rs 67447.42. You sold your gold investment in 2019 at Rs 75,000. The tax calculation will be as follows:- ParticularsAmountCost of gold purchase in 2013 (1)Rs 50,000Sale value of the gold investment in 2019 (2)Rs 75,000The effective cost of gold after indexation (3)Rs 67,447.42Net return applicable to tax after indexation 4 (2-3)Rs 7,552.58Long-term capital gains tax payable (4)X 20.8%Rs 1,570.94 [B-02] In conclusion Gold is a precious metal and highly valuable. Gold prices appreciate over time. You gain considerable benefits by investing in gold. You should understand all the tax implications on different forms of gold investment. If you liked this blog, visit Piramal Finance to learn more about different forms of investment.

08-11-2023

Other

The complete process to generate a new ATM PIN

Most people use an automated teller machine (ATM) to get cash from their bank account or to deposit cash or checks. A few people use an ATM to get information about their accounts, such as their balance, or to transfer money between accounts. But whether you use an ATM for cash or information, you must use a personal identification number (PIN). This number is secret, like a password, and should be known only to you. In this article, we will guide you through the complete process of how an ATM pin is generated. [B-01] Why do we need an ATM PIN? An ATM PIN is a four-digit code that is used to access your bank account at an ATM. The PIN is unique to you and is used as a security measure to ensure that only you have access to your account. You may be wondering why you need an ATM PIN. There are several reasons why you need an ATM PIN. Firstly, it ensures that only you can access your account and withdraw money from it. Secondly, the PIN is a security measure. that protects your account from being accessed by anyone else. If you do not have an ATM PIN, then you will not be able to access your account at an ATM. Therefore, it is important to ensure that you have a PIN before you try to use an ATM. Most people use an automated teller machine (ATM) to get cash when they need it. You need a personal identification number (PIN) to use an ATM. Your PIN is your electronic key to your bank account. It lets you get cash, check your balance, and make other transactions at ATMs. You should never give your PIN to anyone else, not even bank employees. If someone else knows your PIN, they could use your card to get cash from your account without your permission. What are the benefits of having an ATM PIN? Having an ATM PIN is a great way to protect your personal information. It’s important to keep your card and PIN safe, as they’re the only things that can be used for a transaction. So, if you lose your card or it gets stolen, all you need is the number on the back of your card to get money from an ATM. But if someone steals your PIN, they’ll be able to access all your financial accounts without any additional information. That can put you at risk for identity theft. With an ATM PIN, you’ll be able to make transactions without worrying about who has your card or what they may do with it. How does a new PIN generation take place? The PIN Generation should be done by card owners only. A new ATM PIN must be generated in a secure place. Here are a few steps on how a new ATM PIN generates: Put the ATM card in, then sign in with the temporary PIN the bank offers. You can choose “Change PIN” or “Generate New ATM PIN.” Banks will issue an OTP (one-time password) to the registered mobile number to verify. You may need to submit information from time to time. Such as a bank account number or a registered cell phone number. You can create the 4-digit PIN once the request has been verified. And you might be required to confirm it by entering the new ATM card PIN a second time. And now, your ATM PIN generates, and you can use it to conduct transactions starting now. FAQs How frequently should my PIN be changed? At least once a year, or every three to six months, you should change your ATM PIN. You might receive an OTP on your registered cell phone number each time. You change your PIN as confirmation. For security purposes, it shouldn’t be changed regularly, only occasionally. Can I use the same ATM PIN that the bank has provided? Yes, you can use the same ATM PIN that the bank has issued for ATM transactions. However, a new ATM PIN is recommended that is unique to you. Nobody knows the PIN code, not even the bank. Even if banks’ PINs are secure and private, you still need to create a new PIN. They suggest that PIN generation should be done by cardholders only. Is it possible to use my ATM card without entering a PIN? Without entering the PIN, you cannot use the ATM card. Is it possible to generate or update my ATM card PIN without going to the bank? You don’t need to go to the bank branch to generate an ATM PIN because you can do it by SMS, net banking, calling customer service, or physically visiting an ATM. What happens if I don’t get the OTP? Due to a poor network, you might not receive the OTP; in such cases, you can try again later. Ensure that incoming messages are permitted on your mobile. [B-02] Conclusion An ATM PIN is a four-digit code that is used to access your bank account at an ATM. The PIN is a security measure that ensures only you can access your account. It lets you get cash, check your balance, and make other transactions at ATMs. It’s important to keep your ATM card and PIN safe. If someone steals your PIN, they’ll be able to access all of your financial accounts without any additional information. At least once a year, or every three to six months, you should change your ATM PIN to increase security. It shouldn’t be changed regularly, only occasionally. The PIN generation should be done by cardholders only. Read more related blogs on the Piramal Finance website to explore our financial products and services. If you need to know more about personal loans, credit cards, and financial calculators, visit us now!

08-11-2023

Know More

Top 5 Best Tax Saving Options in 2023

One way to achieve financial security is to look for extraordinary gains. But not everyone can endure the risk factors that it poses. That’s why a simple and effective plan is needed for personal financial stability. Once you have ensured financial stability, you should take risks, but only according to your appetite and wallet. However, as you retire, you want to build more and more on your financial security if you have enough saved up already. Relevant tax savings are a helpful way to manage your finances. For example, income tax rules tell you when and how much tax to pay. In addition, income tax provisions help reduce your tax burden using tax deductions. [B-01] Hygiene factors that affect tax savings Before investing in the tax savings scheme of your choice, there are some hygiene factors that you must consider. First, evaluate the tax regime best suited to your needs. For example, some tax regimes are lower on taxes but don’t allow you to apply for benefits or exemptions. Others are higher on taxes but will allow you the flexibility to take advantage of the benefits of tax deductions and provisions. Another hygiene factor to consider is filing your taxes on time, or else you become liable for penalties and fines. Top Five Tax Saving Schemes The top 5 tax saving investment options given here not only reduce your tax burden. They also help manage your finances by ensuring you don’t bleed your tax earnings. Tax-saving benefits of health insurance Health insurance comes with three-pronged health insurance benefits for you or the insured. First, it covers not only hospitalisation costs but also pre-and post-hospitalisation charges. Second, it features a no-claim bonus, i.e., if you do not avail of the benefits or do not make a claim in the policy period, your insurance cover sum insured will increase without paying extra. In addition, the (health insurance) investment has a tax-saving aspect. As per Section 80D of the Income Tax Act, when you buy health insurance for yourself, your child or your spouse, you can claim a deduction on premium payments of up to Rs. 25,000. This can also be extended up to Rs. 50,000 for senior citizens, meaning the policyholder can get a deduction of up to Rs. 75,000 from the taxable income. If the age of the proposer and his parents is more than 60 years, the amount can increase up to Rs. 1,00,000 (Rs. 50,000+Rs. 50,000). Tax savings on home loan You can claim tax benefits from home loans from banks, financial institutions, and housing finance institutions. Under section 24(b), if you pay interest on home loans, you can claim a deduction to a limit of Rs. 2 lakhs on the interest paid. However, there is no upper limit if the property is let out. For the principal part of the loan you can claim Section 80C deductions of up to Rs. 1.5 lakhs. This includes stamp duty and registration charges. In case of a jointly borrowed home loan, each joint holder can avail of a deduction of maximum Rs. 2 lakhs on the interest paid. Under 80EEA, you can claim a deduction only if it is Rs. 45 lakhs or below. Also, the loan should have been sanctioned between 1st April 2019 and 31st March 2022. Unit Linked Insurance Plans (ULIP) For individuals who prefer long-time financial planning, this is the ideal choice. It provides tax-deduction benefits of maximum Rs. 1.5 lakh per year under Section 80C of the Income Tax Act. It comes with a lock-in period of five years, and the risk is moderate to very high. Senior Citizen Savings Scheme (SCSS) Launched in 2004, this government-sponsored savings plan is made for people over 60 years of age. Under Section 80C of the Income Tax Act, one can get a tax deduction of up to Rs. 1.5 lakhs. This extremely low-risk scheme comes with a lock-in period of 5 years. Other tax-saving instruments Did you know a tax-saving investment can also help you generate wealth? The government offers deductions up to Rs 1 lakh 50 thousand under Section 80C of the Income Tax Act for investment in specific schemes. The following are some instruments eligible for this tax exemption: National Pension Scheme: As a subscriber or investor in the NPS, you can avail of benefits on a limit of Rs. 150,000 according to Section 80C of the Income Tax Act. An NPS subscriber can claim an additional deduction of up to Rs. 50,0000 in a financial year under Section 80CCD(1B) of the Income Tax Act. Fixed deposits with a tenure of 5 years or more: An individual can get a tax deduction of up to Rs. 10,000 on the interest rate, whereas for senior citizens and HUFs, the deduction is up to Rs. 50,000. Employee’s Provident Fund (EPF) or Public Provident Fund (PPF): Under Section 80C, both EPF and PPF qualify for tax deduction of maximum Rs. 1.5 lakhs per annum. Sukanya Samriddhi Yojana: Investments in Sukanya Samriddhi Yojana or SSY are tax deductible up to Rs. 1.5 lakhs under Section 80C. The annual interest rate is also exempted from the tax under Section 10 of the Income Tax ACT, as are the proceeds received on maturity or withdrawal. Equity Linked Savings Scheme (ELSS): Under Section 80C of the Income Tax ACT, it is possible to claim a deduction of maximum Rs. 1.5 lakhs per annum, saving up to Rs. 46,800 in taxes. [B-02] Wrapping Up Start your tax planning activities at the start of a new financial year. Those lucky to start initially can select suitable tax-saving instruments that fit their personal finance goals. Also, the PPF and ELSS schemes are set up to earn you more interest if you start at the beginning of a year. In case of doubts, consult a financial expert like Piramal Finance for customised loan solutions for business owners and professionals.

08-11-2023

Mutual Funds

Understanding SIPs and using a SIP calculator

You can understand all about SIPs, the different types and the advantages of SIP, using SIP calculators, etc. [B-01] Steps to Calculate Your SIP Returns With Calculator Systematic Investment Plans, or SIPs, are a way to invest in mutual funds or stock shares. You make regular payments for this type of investment. Over time, your overall investment grows. Depending on your financial savings, SIPs can be made weekly, monthly, or quarterly. The benefit of SIP is that it promotes long-term wealth growth. If you have a sizable amount of funds, you can also invest in lump sums. SIPs have many advantages compared to lump-sum investing. This is explained in the following sections: Types of SIPs Equity SIPs or mutual fund SIPs can be of two types: 1) Regular SIPs: You invest a constant amount periodically over a long period. 2) Step-up SIP: Let’s say you were just promoted to your current position. This may come with a pay raise. You might wish to increase the size of your SIP. You can raise the SIP amount by carrying out a step-up SIP. Using a SIP Calculator You will find many SIP calculators online on different broker sites. A mutual fund SIP calculator can be used in the following ways: Step 1: First, enter the SIP amount that you invest Step 2: Enter the period you want to invest in the SIP. This period is the investment tenor. Note that this has to be a correct figure. This period is the period up to the maturity date. Step 3: Enter the expected return rate on the mutual fund. It is the interest rate if it is a debt mutual fund SIP. For an equity mutual fund SIP, use the 5-year historical rate of return for the return percentage. Step 4: Click Calculate now The total cumulative amount from your SIP will be calculated using the SIP calculator. This includes the accumulated principal plus interest or returns thereon. Advantages of using a SIP calculator: 1) A SIP calculator is a reliable tool to estimate the total value of your investment. 2) A SIP calculator is a commonly available online tool. You can easily access a SIP calculator on any broker’s site or online site selling mutual funds. 3) A SIP calculator accurately estimates the accumulated investment from your SIPs over long periods. 4) You don’t need any assistance. The data inputs that a SIP calculator needs are available to you. There are no complicated steps. Step-up SIP calculator There are other online step-up SIP calculators available to calculate your total investment. The same fields are present in a step-up SIP calculator as in a SIP calculator. In the output cell, a step-up SIP calculator also shows the following data: the total accumulated amount, an estimated return, a growth table of how your SIP contributions are growing, a growth chart for your reference, the step-up SIP shows you a pre-estimate of your step-up SIP amount. The formula applied for calculating SIP returns FV= P X (1+i)^(n-1)X 1/(1+i)^I where FV= Future accumulated value of your SIP investments P = SIP instalment being invested by you i/r = compounded rate of return n= investment tenor r= expected rate of return “i” converts “r”, the expected rate of return, into a compounded rate of return. This SIP return is known as the compound annual growth rate of returns. The formula does not need to be manually calculated. This challenging calculation is made using the SIP calculator. Why should you start a SIP in equities or mutual funds? 1) A SIP does not call for large savings. You can start a SIP with amounts as small as Rs. 500 a month. 2) A SIP helps you meet multiple financial goals. You can start separate SIPs one after the other. 3) It is the first step in achieving your goal of maximising your money. Everyone is familiar with the story of the crow holding a tall jar filled with water at the bottom. To ultimately get to the water and drink it, the crow drops several stones, one by one. This is how starting a SIP works. You make tiny investments initially to gain a huge investment over time. Benefits of a SIP Doing a SIP has multiple benefits: It teaches financial discipline. You can do a SIP regularly over a long period of time. SIP reduces the average cost of your investment. Doing a regular SIP over a long period reduces the weighted average cost of your investment. This technique is called rupee cost averaging. When you make a lump-sum investment, you invest at the market NAV. With every SIP you do, you buy mutual fund units at lower and higher NAVs. This method brings the average cost down. SIP returns make you understand investments better. Suppose your fund is not performing well. You can always switch investments to another fund that performs better. By doing SIPs, you can choose the best investment options. Your risk-return profile defines these options. SIP returns use the principle of compounding returns. It helps your investments grow at a faster pace than inflation. [B-02] Most of us have a habit of investing in mutual funds or the stock market. The best way to increase your long-term wealth is to develop a SIP habit. It is better to begin a SIP when you are younger. SIP investments are intended to be made over a longer period of time. Your wealth increases as a result of compounding. Before picking your investment, please visit a financial advisor. Use a SIP calculator on any broker’s website before performing a SIP. It is basic, straightforward, and simple to use, as was already noted. *Please note that the formula for calculating a SIP may show as plagiarism as it is a generic formula present on many websites.

08-11-2023

Know More

Learn About Tax Exemption On Insurance: 2023 Edition

What is Tax Exemption? Tax exemption is a legal right to eliminate some or all of your income from taxation set by the government. Majority of taxpayers can reduce their taxable income, provided they know the correct ways. Be careful, these are not to be confused with tax deductions. There are many types of tax exemptions in India. Let’s learn about tax exemption on insurance. [B-01] Term Insurance Tax Benefit: Explained Term insurance is a safe protection plan that provides coverage for the term that you are insured. In case of an unfortunate incident such as death, your nominee will receive the sum assured. There are many tax benefits of term insurance plans. Let us have a look at some of them. Deductions under Section 80C: The money you invest in term insurance plans allows you to save money as tax benefits. With this, you can get deductions of up to Rs. 1,50,000. Benefit under Section 10D: As per the updated Section 10D, if the premium of ULIP (collective or singular) exceeds Rs. 2,50,000 per year, tax exemption will not be applicable on the sum received. However, the exception is the death of the policy holder, in which case the sum assured on death will be exempted from the tax. For all other term insurance plans, the maximum premium amount should not exceed Rs. 5,00,000 per year in order to enjoy tax exemption. Health Insurance Tax Benefits: Explained Medical coverage is one of the best financial choices you can make. It covers unexpected medical expenses. Medical charges are very high in case of hospitalization. So, if paying the minute cost worries you, think about the huge bills. This is why the government provides tax benefits on medical insurance. This encourages more people to add medical insurance to their portfolio. Mediclaim Deduction: Section 80D Section 80D offers money deductions on health insurance. It is a great investment for tax planning. The types of mediclaim deductions in Section 80D include: Money spent on maintaining health Money spent as a premium for the policy Let us have a look at the various deductions. Preventive healthcare Below 60 years- Rs. 5000 Above 60 years- Rs. 5000 Self, spouse, and children Below 60 years- Rs. 25,000 Above 60 years- Rs. 50,000 Maximum deduction Below 60 years- Rs. 50,000 Above 60 years- Rs. 1,00,000 Parents Below 60 years- Rs. 25,000 Above 60 years- Rs. 50,000 Exclusions under Section 80D Certain deductions cannot be claimed under Section 80D: If you choose to make the premium amount in cash. If the premium paid is by the third party, other than you, such as your uncle or aunt. Group health insurance, unless the taxpayer chooses to make extra payments as add-on to avail of tax deduction. Siblings or relatives who are not financially dependent on the taxpayer. What To Know Before Buying Medical Insurance For Claiming 80D Deduction Sister, brother, or relative of the taxpayer cannot claim a deduction for tax benefits. If the payment is done by you and your parents, you both can claim the deduction. If the premium is paid for working children, this cannot be claimed. The deduction excludes the cess portion and service tax from the premium amount. Premiums made on behalf of the company cannot be claimed for deduction. If the premium is paid in cash, they are not allowed for deduction. But, by any other mode of payment, deduction can be claimed. Attractive Tax Planning Benefits Let us have a look at the long-term benefits of tax planning: Tax planning helps minimize tax liability There are many tax planning investment programs today. With the help of these plans and programs, you can reduce your tax burden to a great extent. Tax planning reduces tax disputes Proper tax planning at the beginning allows you to stay stress-free. You won’t have to worry about it in the future. It helps protect you from legal liabilities. Tax planning helps secure future The best benefit of tax planning is that it helps you secure your future. It allows you to redirect money to income-generating tools. Tax planning ensures economic stability Planning tax allows you to contribute to the country’s development. You can manage finances well and avoid worrying at the last moment. [B-02] Tax planning and exemptions Disabled individuals can claim deductions on medical expenses or health insurance premiums as per the Income Tax Act. The amount of deduction is Rs. 75,000 per year. People with severe disabilities can claim a deduction of Rs. 1,25,000. For more information, visit the official Piramal Finance website.

08-11-2023