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Early Payment: How to use your surplus money optimally

Individuals should utilize their surplus money to prepay long-term debts such as credit card balances, personal, vehicle, and mortgage loans at a time when fixed income products are yielding lower yields and stock markets are still exuberant.

use your surplus money

Experts advise that if a person can earn a better post-tax return than the current interest rate on a home loan. In this case, he should invest the extra cash. They claim that equity the valuations inequities are stretched and the returns may be muted. Furthermore, investors who begin investing in equities now should not expect substantially higher returns. Before prepaying loans that will help you grow an asset in the long run. Be sure you have enough emergency money to cover a year’s worth of expenses, as well as enough life and health insurance. Otherwise, if the person faces any financial instability it might push them for a personal loan; which has a significantly higher interest rate than a home loan.

However, it is preferable to pay off a vehicle loan with extra cash because a car loan has a higher rate of interest than a home loan. It has no income tax benefits, and, finally, a car is a depreciating asset. Whereas a house is normally an appreciating asset.

Prepay home loan

In cases where equity investments have produced higher returns, earnings can be booked and a portion of the home loan can be prepaid. According to experts, the best strategy in this bull market is to stay invested while taking partial profit bookings. As well as transferring some earnings to fixed income or prepaying higher-interest loans. Prepaying a house loan is perfect now that interest rates have fallen in the last two years; as a jump in the interest rate will burden the borrower even more.

use your surplus money

If a person is unable to make a lump-sum payment, experts advise that they take a systematic withdrawal plan from their mutual fund assets. Then the user shall use the surplus monthly income to increase the EMI. Users can request an increase in their ongoing EMI, at any time; it is generally free of any fees. Stepping up the EMI for a salaried employee also helps as the borrower advances in his profession. Furthermore, they receive better pay packages, resulting in more disposable cash.

Clear credit card dues

Any surplus money must be utilized to pay off credit card dues. Rolling the credit by paying the minimum amount due is not a good idea; as banks charge an interest rate between 35% and 45% per annum depending on one’s spend, payback, and utilization patterns. In fact, rolling credit is a lot more expensive than even a personal loan, which can be availed at 13-15% per annum. For more such updates, keep watching this space!

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Swiggy and Zomato to pay GST to Centre says FM Nirmala Sitharaman

The GST Council today voted to levy a tax on online food-delivery services like Zomato and Swiggy, while also extending the concessional tax rates on some coronavirus medications for another three months, till December 31.

According to FM Nirmala Sitharaman, Food delivery platforms will now pay GST on restaurant services provided through them; and the tax will be levied at the moment of delivery. Swiggy and Zomato will bear a 5% GST at the point of delivery, according to the Union Finance Minister.

Previously, restaurants were responsible for paying the tax. However, the GST Council has decided that henceforth aggregators like Zomato and Swiggy will bear the tax. She claimed that this step will help in revenue protection. These apps are currently registered as TCS (Tax Collected at Source) in GST records.

45th meeting gst council

Is there any new taxes announcement?

Following the GST meeting, Revenue Secretary Tarun Bajaj stated that no new taxes will be imposed. Furthermore, only the GST collection location would merely be relocated. “Let’s say you order meals from the aggregator, and currently the restaurant is paying taxes. However, we discovered that several restaurants were not paying. We are now stating that if you place an order, the aggregator will collect from the customer and pay the authorities rather than the restaurant “According to the Revenue Secretary.

swiggy and zomato to pay gst

Bajaj went on to say, “There is no new tax…”.

Among the major issues, the panel discussed the topic at the 45th meeting of the GST Council in Lucknow on Friday. The meeting was helmed by FM Sitharaman and attended by state finance ministers. Finance Minister Nirmala Sitharaman and her state colleagues agreed to extend concessionary pricing on some new coronavirus medications till December 31. It also voted to exempt fuels, such as gasoline and diesel, from the GST. “The GST Council did not believe it was the right moment to include petroleum items in GST,” Sitharaman explained.

The panel decides to levy an 18% GST on all types of pens. The GST rate on biodiesel for use in diesel blends clipped from 12 percent to 5%. From January 1, 2022, the Council also recommend new textile and footwear tariffs. For more such updates, keep watching this space!

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Your Money: Five tips to get the right two-wheeler loan

Do you want to buy your dream bike but aren’t sure how to come up with the money? Set aside your concerns. You can get a two-wheeler loan to help you fund your goal of owning a bike. Here are five things to think about before you apply for a two-wheeler loan to make sure you get the best offer.

two wheeler loan

Conduct research about the two wheeler loan

The loan terms and conditions vary depending on the banking institution. In addition, interest rates, maximum loan amounts, and loan-to-value (LTV) ratios vary by financial institution. Be ready to pay various expenses associated with two-wheeler loans, such as processing fees, when applying for a loan.

Check with different lenders for hidden provisions that may affect your loan application form. You might even locate a financial institution that charges minimal or no costs for loan processing or portion prepayment if you do your homework.

Loan Amount

Many financial organizations provide loans up to 90% to 95% of the value of a motorcycle. The LTV ratio is determined by a variety of factors, including the type of two-wheeler and the applicant’s background.

Varying lenders provide different LTV ratios and loan amounts. You don’t want to find yourself in a scenario where your chosen bike is worth Rs 1,00,000 but the lender will only grant you Rs 20,000. As a result, choose one that disburses a loan quantity that is suitable for your requirements. The loan amount should never be over-leveraged when choosing a financial institution. You can find yourself in a situation where the available loan amount exceeds your requirements. In such circumstances, the lender may try to get you to buy a more expensive bike by requiring you to take out a larger loan. Going overboard with your spending, on the other hand, can cost you money in the long run. You may find it difficult to repay your monthly EMI, causing a blemish on your credit report.

loan facilities at low interest rates for two wheelers

Affordable interest rate of the two wheeler loan

The applicant’s income, age, employment status, and credit history are used by financial institutions to evaluate loan eligibility and interest rates for two-wheeler loans. Although you do not always need a good credit past to get a two-wheeler loan, having a good credit history will assist you to get a two-wheeler loan with a low-interest rate.

Compare the Annual Percentage Rate (APR) offered by various financial institutions, as it includes the prices and expenses associated with obtaining two-wheeler financing. As a result, it is advisable to select a financial institution that provides a two-wheeler loan at a reasonable interest rate.

Repayment options

Examine the many repayment alternatives offered by various lenders. The larger the interest component, the longer the tenure. Choosing a plan with flexible loan EMIs will help you to pay off the loan swiftly while never missing an EMI payment. For more such updates, keep watching this space!

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Points to consider while getting a personal loan for higher education

With the rising cost of living, loans have become increasingly important in many people’s lives, including paying for school. These personal loans are beneficial to everyone who wishes to further their education. In general, lenders do not provide education loans to students on their own. Most lenders want a co-applicant, usually one of the parents. So that they have some recourse if the loan goes into default.

personal loan

To apply for an education loan, one must have a letter confirming the admission to a course. Lenders would not give an education loan without confirmation. These loans are often used to finance tuition and accommodation expenses. As well as the cost of books and, in some cases, computers. Some lenders have set limits on the amount of money they will provide for specific courses.

A different option for personal loans

Personal loans, on the other hand, give borrowers more flexibility. “A more convenient option would be to go for a personal loan instead,” says Gaurav Jalan, CEO, and Founder of mpocket.

Because lenders do not ask for reasons for the personal loan such personal loans for education can be used to cover any education-related expenses; such as course fees, lodging, travel, living expenses, course material, and even smaller miscellaneous charges that may arise. A personal loan application is also less time-consuming, requires less paperwork, and has a speedier disbursal period.

Gaurav Jalan, CEO, and Founder of mpocket

“Such unsecured personal loans do not require collateral and do not require a co-applicant,” he continues. This kind of loan, on the other hand, will normally have a lower maximum loan amount. And higher interest rates than an education loan.” Parents can apply for small-ticket or large-ticket personal loans on behalf of their children or students, depending on their needs at the time. “Personal loans can assist reduce the financial burden of schooling in today’s society; without all the stress associated with applying for an education loan,” Jalan adds.

Regardless of whether they apply for a personal loan for education or an education loan, experts recommend that all borrowers take notice of all repayment alternatives, loan length, and interest rate. “The borrower must analyze all options before making a final selection on a certain financing option,” Jalan continues. Only take out a loan if you’re certain you won’t be able to pay for these fees out of pocket”. As a result, carefully analyze your needs and request a specified loan amount. For more such updates, keep watching this space!


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How to calculate tax on your property

Immovable property has traditionally been a secure mode of investment, especially for long-term investors. The acquisition of this type of property is for personal use or solely for rental and appreciation purposes. While taxation on property appreciation is on the basis of capital gains at the moment of sale. The taxation on rental benefits is on an annual basis in the hands of the owner.

Tax on Rentals

While taxation on rental income is normally under the heading of ‘housing property’. Income from property sub-letting is often taxed under the heading of ‘other sources’. In the case of jointly owned properties, the tax incidence is proportionately distributed on each owner’s share of the property. Up to a limit of two houses, a house property owned for the purpose of residing by self and family is exempt from taxation; nevertheless, rentals from a commercial property are always subject to taxation. Notional rent is taxable in the hands of an individual over and above two self-occupied residences; even if the property is not actively on rent.

property tax

The Income-tax Act of 1961 enables various deductions under this head of income for calculating the income payable from such rents. Aside from the municipal taxes paid by the property owner during the year; a standard deduction of 30% of the net yearly value of rent is available, regardless of the actual expenses incurred.

This basic deduction is available for all property owners to compensate for general maintenance and repair expenses; without the requirement to keep any accounting for such expenses. However, beyond this standard deduction, there is no allowance for additional deductions for expenses like maintenance fees in society flats, property insurance, etc.

tax on your property

Interest paid on home loan

The Act also exempts taxpayers from paying interest on house loans taken out for the acquisition, construction, repair, renewal, or reconstruction of real estate. In the event of a self-occupied property, the maximum limit for interest deduction is Rs 2 lakh; any interest exceeding this monetary limit will lapse; however, the Act does not specify a monetary limit for claiming interest deduction in the case of a rental property. For more such updates, keep watching this space!

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Your Queries: Loans – You need to submit proof of renovation for a top-up home loan

Are you planning to apply for a loan, or you have an ongoing home loan and need some better cost-saving suggestions? In this article, we will address some of the FAQs we have received.

01. Shubham Kumar

After ten months, my house loan EMI will come to an end. I'd want to apply for a second loan to help me renovate my home. What are the terms of a top-up loan, and should I obtain a loan against my home once my present loan is paid off?

When it comes to interest rates, a top-up loan is a better option because a loan against a property normally has a higher interest rate. Take a home renovation quote and submit it to your current loan provider right away. The loan will be sanctified according to the same procedures that apply to residential loans. Once you obtain such a loan, you must provide proof of completed renovations.
home loan policy

02. Manoj Patel

I took out a home loan for a building that is still under construction. Construction took eight years to complete. Is it possible to claim a tax deduction on a home loan after I have taken possession? Can I shift the loan to another bank and then claim the exemption if that is not possible?

Even if the loan is transferred to a different service provider, the construction period will continue at eight years. Because the construction period is longer than five years, the prior-period interest will not be deductible under Section 24. Only when you have taken possession of the property will you be entitled to receive the benefits on both the interest and principal paid under Sections 24 and 80C.

03. Aditya Khurana

What are the other choices for borrowing ten lakh for a short duration at a lower rate, given the high-interest rates on personal loans?

Personal loans are, indeed, unsecured loans with no collateral, making them costly. If you have any financial assets, such as stocks, mutual funds, classic LIC policies, or bank FDs, you may be able to borrow against them. They'll be less expensive than a personal loan.
Personal Loan

04. Alok Chauhan

My son receives offers from fintech companies for loans with no collateral requirements. Should he apply for a loan using the app?

A loan should only be taken when absolutely necessary. Your kid could take out a loan if he has a specific buy-in mind for which he does not have immediate finances. I would also avoid leveraged investments, which involve taking out a loan to invest in riskier assets.

For more such updates, keep watching this space!

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Life insurance: Upward trend in premium growth of private players

Individual annualized premium equivalent (APE) growth has been gradually improving over the last few months; with August 2021 up 39% y-o-y, July 2021 up 31% y-o-y, and June 2021 up 16% y-o-y. All this growth comes from a low base of 6% y-o-y decline in August 2020 and a 7% y-o-y decline in each of July 2020 and June 2020.

As a result, high growth is supported by a low base and improved month-over-month (m-o-m) trends. Individual APE CAGR grew to 14 percent in August 2021 from 10% in July 2021 and 4% in June 2021; reflecting better month-over-month trends. Unit-linked insurance plans (Ulips) are reviving, thanks to buoyant capital markets, and non-par savin continues to gain traction.

As the base impact fades, y-o-y growth is expected to slow slightly. However high demand for certain products is expected to keep premium growth strong in the coming months. As a result, overall growth trends are still positive. For private players, Group APE was down 1% year over year in August 2021.

Life insurers' performance

In August 2021, the overall individual APE of LIC fell 5% y-o-y (down 4 percent y-o-y in July 2021 and up 1 percent y-o-y in June 2021). However, the base is higher than that of private players. Individual APE CAGR over two years was -2 percent, compared to 14 percent for private counterparts. However, despite a strong 18 percent y-o-y increase in group APE, overall APE grew only 2% y-o-y.

premium growth

Despite its large base, HDFC Life stands up admirably. It reported a 17 percent year-over-year increase in overall APE. Helm by a robust 27 percent year-over-year increase in individual APE, despite a 32 percent year-over-year decrease in group APE. Individual APE CAGR over two years was 20%, which was higher than the average of private peers’ CAGR of 14%. The sharp drop in group APE is most likely due to a conservative approach to the group term business.

The recovery of ICICI Prudential Life is on pace, with a 36 percent year-on-year increase in overall APE. Helm by 34 percent year-on-year rise in individual APE and 59 percent year-on-year growth in group APE. Due to lower volumes in FY2021, the two-year individual APE CAGR was -2 percent (-10 percent to -11 percent y-o-y decline over the past two months and 15 percent decline in Q1FY22).

Max Life reported a moderate 9% year-over-year increase in individual APE; 10 percent two-year individual growth for August 2021 and 6% for July 2021 is lower than the private peer average of 14 percent and 10%, respectively. Even though Max Life has excelled in the sector in terms of growth since the outbreak began, it appears to have slowed in the last three months. For more such updates, keep watching this space!

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What is a top-up loan and when should you go for it?

A top-up loan, along with a personal loan, a credit card, and other loan options, is an excellent way to obtain emergency cash. However, experts advise that at first, you must understand what a top-up loan is. And, when should you go for it?

Banks, housing finance firms, and other financial institutions offer top-up loans; which allow borrowers to borrow a specific amount of money in addition to their home loans. As a result, they are financing choices for borrowers who already have a loan with the lender, such as a home loan. Borrowers are normally only eligible for a top-up loan in this situation if they have been paying their EMIs on time and without default for at least a year.

“A borrower’s track record of repayments is one of the primary determining elements for the eligibility for top-up loans,” says Gaurav Jalan, CEO, and Founder of mpocket. This type of loan normally comes with the same terms and conditions as the original.”

In the event of an emergency, most people will either take out a personal loan. Or they will liquidate assets such as gold and property to get money. Experts believe that in some cases, a top-up loan on an existing house loan is a preferable option. Since top-up loans are readily available and come with a low interest rate.

Why top-up loan is right for you?

The most significant advantage of a top-up loan is that the borrower only has to complete minimal documents. Simply put, their existing loan EMIs will increase in proportion to the increased borrowing. It eliminates the need for the borrower to apply for a new loan; because it is approved based on the borrower’s existing loan with the lender. This streamlines the procedure and speeds up disbursement. As a result, this loan is a considerable choice for immediate funding.

Top Up Loan

“This makes it a perfect option in case of an urgent need for money,” Jalan explains. These loans are available for similar use as the original loan, but with fewer restrictions”. A home loan, for example, can only be used for that specific purpose. However, because a top-up loan is tied to an existing home loan, the borrower is not obligated to use the money for refurbishment or house repair. So this kind of loan is a good choice to borrow funds for house repairs or furnishing; as well as larger needs like business expansion, kid education, medical emergencies, and weddings. In summary, top-up loans have no restriction for their use.

“These loans are a perfect alternative in case of unanticipated occurrences or whenever one requires a personal loan, a loan against their property, or even gold,” Jalan continues. It’s a more convenient and hassle-free option in such situations.

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Deadline To File Income Tax Returns Extended To December 31

The government announced on Thursday, that the deadline for filing income tax returns has been extended to December 31, due to the coronavirus epidemic and ongoing technical issues with the government’s website. Normally due by the end of July, the deadline was earlier postponed from May to September 30, owing to the coronavirus epidemic.

filing income tax return deadline

“In light of the difficulties reported by taxpayers and other stakeholders in filing Income Tax Returns. And The rise of various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961(the “Act”). The Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing Income Tax Returns. As well as, various reports of audit for the Assessment Year 2021-22,” according to the Finance Ministry.

Deadlines and schedules for filing Income Tax Return

“The due period for filing Income Returns for the Assessment Year 2021-22; which was 31st July 2021 under sub-section (1) of section 139 of the Act. As extended to 30th September 2021 by Circular No.9/2021 dated 20.05.2021. It is thus further now 31st December 2021”.

From November 30, 2021, the CBDT has extended the deadline for filing ITRs for businesses until February 15, 2022.

income tax return filing date extended

The deadlines for filing the tax audit report and the transfer price certificate got extended to January 15, 2022, and January 31, 2022; from the previous deadlines of October 31 and November 30 respectively. The deadline for filing a late or revised income tax return is also extended by two months, i.e., to March 31, 2022.

Concerning the tax portal’s difficulties, the finance ministry stated on Wednesday that it is working with Infosys to provide a smooth filing experience for taxpayers.

The CBDT released the paperwork for filing Income Tax Returns for the 2020-21 fiscal year on April 1. Under section 115BAC of the I-T Act, the government had given taxpayers the option of choosing a new tax regime for the fiscal year 2020-21. For more such updates, keep watching this space!

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RBI removes lending curbs on UCO Bank

The state-owned UCO Bank will no longer be subject to the Reserve Bank of India’s (RBI) harsh lending limitations. UCO Bank was under RBI’s prompt corrective action (PCA) restrictions, which were imposed in May 2017. The central bank announced on Wednesday that the lender is no longer under these restrictions.

rbi removes lending curbs on uco bank

Following the exit of UCO Bank, only two banks remain under PCA: Indian Overseas Bank and Central Bank of India. The PCA framework is used by the central bank to punish banks that have exceeded specific regulatory limits in terms of problematic loans and capital adequacy. Furthermore, PCA comprises limiting high-risk lending, increasing provisioning, and limiting management compensation.

How UCO Bank got out of the PCA restrictions?

According to the RBI, UCO Bank has given a written commitment to follow the minimum regulatory capital, net non-performing asset (NPA), as well as leverage ratio guidelines on an ongoing basis. The RBI also received information about the new structural and systemic adjustments implemented by the Kolkata-based lender; to meet its commitments.


“The Board for Financial Supervision assessed the performance of the UCO Bank; which is currently under the RBI’s fast corrective action framework. The bank is not in breach of the PCA standards, according to its disclosed results for the year ended 31 March 2021,” RBI said.

UCO Bank’s net nonperforming assets (NPA) ratio was 3.94 percent as of March 31; down 151 basis points (bps) from the same time last year. Under Basel III, its total capital adequacy ratio was 13.74 percent; up 204 basis points from the fourth quarter of FY20.

On August 6, RBI governor Shaktikanta Das stated that banks that pass the assessments are getting off from the restrictive framework.

“We’re still looking into that position. One public sector bank was recently got out from the PCA list. And if and when we receive the requests, we analyze them to see if they meet RBI’s regulatory criteria. And if we are certain that they are, the RBI will take action. As a result, we’ve been removing banks from PCA,” Das explained. For more such updates, keep watching this space!

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