Daily News

Dhanteras 2021 Gold Buying Guide: Is Digital Gold as Good as the Real/Physical Gold?

Gold remains one of the most popular investment options for many people, especially during festivals like Diwali and Dhanteras. There are a variety of ways to invest in gold. Purchasing physical gold in the shape of coins, bars, or jewelry is by far the most popular method in India. Digital Gold is another alternative, as is investing in gold through Sovereign Gold Bonds (SGBs) or Gold ETFs.

dhanteras gold buying 2021

Gold can be purchased in digital or physical form, allowing consumers to keep the golden metal in their own possession. In the case of SGBs and ETFs, the buyer/investor does not receive physical gold.

Because most Indians want actual gold in their hands when they buy during Dhanteras, we examine if digital gold is as good as real (physical) gold and what the best option to invest in gold during Dhanteras would be.

The Covid-19 pandemic, according to a World Gold Council (WGC) research, affected Indian gold sellers’ brick and mortar business model. The epidemic acted as a stimulus for increased sales through internet outlets. However, India’s online gold sector is still in its infancy, accounting for about 1-2 percent of total gold transactions by value.

Digital Gold vs Real Gold

Unlike physical gold, one can start investing in digital gold with as little as INR 1 and go up to Rs 200,000 every day. To obtain physical gold, the buyer must purchase a minimum of 1 gram of the metal. However, both means of purchase are taxed at the same rate of 3%.

gold investment

In the age, where alternative investments are becoming increasingly popular, gold remains one of the safest things to invest in. According to Kulkarni, gold is always an excellent method to diversify your portfolio. But only invest a modest portion of your portfolio in it (less than 10 percent of the total portfolio).

However, Kulkarni suggests instead of digital or physical gold, investors should consider SGBs and Gold ETFs as investment options to attract better returns.

Daily News

Your Money: Looking for a professional loan? Here’s how to get it

Personal loans are loans that you can take out for your own personal purposes. Borrowers who take out this loan utilize the funds to purchase items, pay tuition fees, pay for medical expenses and prescriptions, and supplement their monthly budget.

As there are no collateral requirements, this form of loan is easier to apply for. You can easily obtain a loan if you are employed and your salary falls under the loan’s eligibility criteria. Your credit score, in addition to your salary, is a consideration.

how to get loans

A good credit score can make the process go much more smoothly. A strong credit score is accompanied by good credit history. Lenders examine your credit scores and history to determine whether you are a responsible borrower. They rely on your payment history because there is no collateral.

Personal loans

Personal loans are generally smaller in contrast to Mortgages. You can’t use this loan to buy a house, a car, or other similar assets because the loan aims to cater to personal requirements. Personal loans may not be the best option if you need to buy assets other than what you need for your personal expenses.
You could also be asking who is eligible for personal loans. Unlike any other sort of loan that has restrictions on a specific class or group of people. Personal loans are available to anybody who is of legal age to borrow, is employed, and has sufficient documentation to show the lender. You can receive personal loans regardless of your financial situation as long as you meet all of the standards.

Professional loans

Unlike personal loans, professional loans are exclusively available to working professionals like accountants and doctors. You can’t get a professional loan if you work in another industry and don’t have a white-collar job designation.

This form of loan is customizable to the specific demands of working professionals. Professional loans, according to their definition, are designed to assist these individuals in funding or expanding their enterprises in order to practice their profession. For example, if you are a doctor who wants to start a clinic in India, you can apply for a professional loan to help you realize your dreams.

professional loan

This loan is ideal for working professionals because it is customizable according to their requirements. Your income and financial ability to pay are also considered by the lender. You can get large loans with low-interest rates for your needs, and the application can approve in as little as a day, depending on the lender.

How to get the loan?

The next step is to choose a lender to take out a loan from. But where do you look for one and how do you pick one? Previously, you had to go to the bank and go through a series of procedures before submitting your application. Everything can now be done online, thanks to technological advancements. Personal and professional loans are available from online lenders. These loans are available from a variety of online lenders. In reality, you can now apply online by simply uploading your paperwork to the lender’s official website.

Just make sure you evaluate numerous criteria when picking a lender, including the interest rate, possible fines, and penalties if you fail or pay late, and processing fees.

Daily News

Want to cut festive expenses? Here’s how to manage your spending urges

The first step in filling a pitcher and ensuring that it stays full when not in use is to stop any leaks. So, in order to have some money left over for investments, you must reduce wasteful festive spending in order to save more.

want to cut festive expenses?

“Managing finances, especially over the holidays and festive days, can be difficult due to our proclivity for overindulging. However, a little caution can aid in pulling the strings, allowing you to better manage your money and, of course, enjoy the festivities,” says Aditya Damani, Founder of Credit Fair.

Differentiate between Need Vs Want

Focusing on and distinguishing between needs and wants is the first step toward reducing your spending tendencies. When we say we need something, we’re implying that we won’t be able to live without it. “Wish,” on the other hand, implies that we can live without it; keeping these two characteristics in mind, focusing on what we need, and then shopping appropriately. It is critical that we alter our purchasing mindset.

Loan for shopping, but should we?

There will also be loan offers for buying, which is the ideal method to borrow to buy. If you are actually intent on shopping and have a lengthy list of things-to-buy or things-to-gift, it is advised to take advantage of the No-Cost EMIs that are available.

festive season buyings
Use Credit Card judiciously

You must have amassed a lot of reward points through your credit cards if you are a savvy shopper. Those who haven’t used their reward points on items like upgrades or travel should think about it while they shop for the holidays or festivals this year.

Avoid overspending

Keeping track of expenses throughout the festival season can be difficult at times. This is because we frequently spend more than we anticipate. Consider the following scenario: a person has spent Rs 1 lakh on his credit card and does not have enough funds to pay the bills. So, how does he handle things? In this instance, one can either pay the minimum amount required and then pay off the loan over time at a significantly higher interest rate – say, around 36%. On the other hand, one can take out a personal loan for debt consolidation at a rate of 14 to 16 percent interest and pay off all of one’s debts.

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Your Money-Mutual funds: How holding period impacts taxation

It is very crucial for a mutual fund investor to understand the tax implications of its investments. Mutual funds are taxed based on how long they’ve been held or invested. Long-term and short-term holding periods are the two sorts of holding periods. The definitions of a short-term holding period and a long-term holding period vary depending on the mutual fund type.

how holding period impacts : Mutual funds
Short-term holding period

Short-term investments are equity funds that have been held for less than a year. Debt funds to short-term investments, on the other hand, must have a holding period of fewer than three years.

Long-term holding period

Long-term investments are equity funds held for a period of greater than or equal to 12 months. Debt funds, on the other hand, are considered long-term investments if they are held for three years or longer.

Taxation on mutual funds

An investor gets a return on their mutual fund investments when the sale price of the mutual funds is higher than the purchase price. Capital gains are the phrase for this profit. Capital gains are further separated into long-term capital gains (LTCG) and short-term capital gains (STCG) depending on the holding time of an investment (STCG). These capital gains determine the tax implications of mutual fund investments.

Equity funds: Without the advantage of indexation, LTCG on equity funds is taxed at 10% per year. LTCG on equities funds with a value of up to ‘1 lakh per year is tax-free. STCG on debt funds is taxed at a rate of 15% per year.

Equity funds

Debt funds: LTCG is levied at a rate of 20% per year on debt funds, with the added benefit of indexation. STCG, on the other hand, is taxed according to the investor’s tax bracket.

Hybrid funds: Hybrid or balanced funds that invest more than 65 percent of their assets in equity and equity-related securities are taxed similarly to equity mutual funds. Hybrid funds that allocate more than 65 percent of their assets to debt funds are taxed similarly to debt mutual funds.

Securities Transaction Tax (STT)

On redemption, a securities transaction tax of 0.001 percent is imposed on equity and equity-related instruments. Investors receive their funds after the STT has been deducted, therefore it is not necessary to pay it separately.

Daily News

Now Google Pay users can buy SBI Arogya Sanjeevani health insurance plans for themselves and family on the go

SBI General Insurance has partnered with Google Pay to make the purchase of health insurance easier for consumers through the app. The online payment service app will provide its users the option to purchase SBI General’s health insurance, Arogya Sanjeevani.

google pay users can buy sbi arogya sanjeevani health insurance

SBI General said in a statement that this partnership is in keeping with its goal of expanding its distribution of general insurance solutions through digital channels. This is also Google Pay’s first partnership with the insurance business in India. The project aims to allow people to purchase health insurance on the go through Google Pay Spot.

As part of this project, Google Pay and SBI have created a health insurance purchase option on Google Play. Google Pay customers will be able to purchase SBI General’s health insurance, Arogya Sanjeevani, on Google Pay Spot.

Arogya Sanjeevani is a basic health insurance policy that offers basic coverage at a reasonable cost. Through Google Pay Spot, users will be able to purchase both individual and family plans under the Arogya Sanjeevani policy.

SBI general

Remarking on collaboration, Prakash Chandra Kandpal, MD & CEO, SBI General Insurance said, “Today’s consumers are highly informed and evolved about their wants”. The pandemic has increased people’s use of digital platforms for a variety of purposes. Moreover, The expectation of the new digital users for financial solutions has grown as well.”

“This collaboration is yet another attempt to meet the growing need for health insurance. The real aim of these projects is to bring a bigger number of people into the insurance fold”. Prakash Chandra Kandpal added SBI General will offer a regular health insurance plan on the this platform; these plans will be available at an affordable rate, as a result of this collaboration, Arogya Sanjeevani,”.

Daily News

INCOME TAX: You can adjust the basic exemption limit against LTCG/ STCG

According to Indian tax regulations, an individual has an obligation to file a return of income; only if their gross total income in a financial year exceeds the basic exemption ceiling.

capital gains tax
I am a B.Tech student with a tuition income of up to Rs 2 lakh and some LTCG and STCG. Which ITR form I must submit? My yearly salary is less than Rs 2.5 lakh. If my LTCG is less than Rs 1 lakh, will I have to pay tax on STCG?

Individuals are only required to file a return of income if their gross total income in a financial year exceeds the basic exemption ceiling. For the fiscal year 2020-21, the exemption ceiling for individuals under the age of 60 is Rs 2.5 lakh. We assume that Long Term Capital Gains (LTCG) and Short Term Capital Gains (STCG) are incurred by selling investment shares.

If such profits are above Rs 1 lakh in a financial year and you have paid Securities Transaction Tax (STT). In that case, any LTCG on the transfer of listed shares held for more than one year is comes under the tax at a flat rate of 10%. STCG, on the other hand, is taxable at the applicable slab rates for individuals. However, if short-term capital gains emerge on the sale of listed equity shares for which STT has been paid, the rate is 15%. After adjusting for other income, if any. A resident individual is eligible to modify the baseline exemption limit against LTCG/STCG.

long term capital gains

To arrive at ‘gross total income,’ tax must be calculated separately under each heading and then combined. You do not have to submit an income tax return if your gross total income (before any deductions under Section 80C/80D, 54, etc.) does not exceed the basic exemption level of Rs 2.5 lakh.

I resigned in July 2019 at the age of 58, but I have yet to release my accumulated EPF corpus, which receives tax-free interest. When will the taxability of the interest earned there to kick in, so that I can pay it as advance tax for that fiscal year?

According to a recent judicial decision, Interest on EPF to the extent of the amount earned after retirement is taxable. This is due to the fact that the exemption is only available to employees. When a person retires, he or she ceases to be an employee, and any interest received is subject to tax. As a result, you could potentially tax the full amount of interest earned after retirement. On accrued interest, you can discharge your tax liability once a year.

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YOUR QUERIES: You can take a personal loan from a bank against your fixed deposits

You can get a personal loan against your FD from the same bank without having to withdraw your money early. Your deposit continues to grow at a pre-determined rate without interruption.

personal loan
I have a total of Rs 20 lakh in bank deposits. Is it possible to put my FDs up as collateral for a bank loan at a lower interest rate?

Yes, you can get a loan against your FD from the same bank without having to withdraw your money early. Your deposit continues to grow at a pre-determined rate without interruption. For the duration of the loan, you pay interest that is a few basis points greater than the FD rate. If you do not return the loan by its due date, the revenues from your FD will clear the loan first, and you will receive the remaining balance.

Approximately half of my fixed-income investments are held in my SBI Overdraft Account for my home loan. It has a 7.7% interest rate (saves that amount from my loan). Should I keep it, transfer it to another instrument, or pay off the loan?

This offers fantastic cash flow management, interest payment management, asset allocation, and rebalancing. Continue with the status quo if your financial flow allows you to pay the EMIs. Only consider paying off the loan if you have a pressing need to do so.

housing loan
I intend to take a home renovation loan to supplement my existing home loan. Will I be able to deduct the loan from my taxes, and will the bank charge me any pre-payment penalties?

The home loan and top-up loan will be treated as a single entity for tax purposes under Sections 80C and 24B. Refer to the sanction letter for pre-payment charges and read the small print for terms and conditions. There are no prepayment charges on a floating rate loan, but they are charges on a fixed-rate personal loan.

I defaulted on a car loan a few years ago. I’d like to get a home loan from the same bank, but it’s turned me down. Should I go to other banks without telling them about the default?

Each Financial Institution reports personal loan default, which is present in the borrower’s credit score. If you have paid off all of your debts, have your credit score corrected at the same bank where you defaulted. If not, pay off your debts before applying for a new loan. Before approving a loan, financial institutions will do a credit check with CIBIL, Equifax, or Experian.

Daily News

Mutual funds: Why invest in multi-cap funds now?

Association of Mutual Funds of India (Amfi) stated that net inflows into multi-cap funds reached Rs 3,569 crore in September. Which is the highest level in the equity fund category. Because of the market’s volatility, individuals are increasingly investing in multi-cap mutual funds.

Mutual funds

Multi-cap funds invest in large-cap, mid-cap, and small-cap stocks from a variety of industries. These funds take advantage of opportunities across market caps to provide investors with the best possible returns. Last year, the markets regulator amended the investing requirements. Hence, requiring multi-cap funds to invest at least 25% of their assets in large-cap, mid-cap, and small-cap equities.

This was done in order to ensure that multi-cap schemes have a diversified portfolio of large-cap, mid-cap, and small-cap enterprises. By January 31, 2021, fund houses had to conform their holdings to these new constraints. Prior to the implementation of the new rules, multi-cap fund managers invested a greater percentage of their assets in large-cap funds.

The Securities and Exchange Board of India (Sebi) has launched a new category known as Flexi-cap. Flexi-cap allows for allocation across market caps with no restrictions. As a result, fund managers were able to avoid reshuffling their multi-cap portfolios, and many existing multi-cap funds shifted to the Flexi-cap category. Most Flexi-cap funds now have a bigger allocation to large-cap stocks than in the past.

Flexi cap funds
Should you invest?

In multi-cap funds, fund managers stick to the Sebi prescribed allocation. Meanwhile, dynamically allocating the remaining 25% according to the fund house’s unique investing methodology to optimize the overweight of large-caps, mid-caps, and small-caps. Typically, fund managers assess the company’s business environment, valuation based on fundamentals, and management’s ability to execute and grow up the firm.

During a bull market, multi-cap funds typically outperform large-cap funds since mid-cap and small-cap equities generally outperform large-cap stocks. Experts advise that an investor’s decision to invest in a multi-cap fund be based on his or her risk profile, financial goals, and investment horizon.

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Tax-Saving Infrastructure Bonds: Know how much tax to be paid on maturity and how to avoid TDS

The long-term infrastructure bonds that were issued in the Financial Year 2011-12 to offer deductions of up to Rs 20,000 from taxable income under section 80CCF of the Income Tax Act are set to mature in the Financial Year 2021-22.

tax saving infrastructure bonds

Although the bonds provided tax benefits under section 80CCF at the time of purchase. The bonds’ interest is taxable in the hands of investors.

As a result, the tax-saving long-term infrastructure bonds were not really tax-free bonds.

The annual interest payout option and the cumulative interest option were both available to the investors.

While investors who chose annual interest distributions have already paid tax on the amount of interest received. Those who chose the cumulative option would pay more tax in the year of investment than they saved in the year of investment.

Because the interest on long-term infrastructure bonds is taxable. The interest earned by the investors will be added to their taxable income. Where interest calculations are on a per annum basis for those who chose the annual option. Whereas it is aggregate on maturity for those who chose the cumulative option.

As a result, tax payable will be lower for investors in lower tax brackets and higher for those in higher tax brackets.

TDS

For Resident taxpayers who choose the cumulative option in physical format. The interest payment will be subject to a 10% Tax Deducted at Source (TDS) if the interest payment upon redemption exceeds Rs 5,000.

TDS- tax deducted at source

The TDS rate will increase to 20% if the bondholder does not have a valid PAN. The investor will same TDS rate if the investor has not submitted his tax returns for the last two years; where the total TDS and TCS in each of those years is Rs 50,000 or higher.

No TDS will be applicable to investors who hold bonds in Demat form.

TDS of 31.2 percent would be applicable to interest payouts for non-resident taxpayers.

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RBI imposes Rs 1 crore penalty on Paytm Payments Bank

The Reserve Bank of India (RBI) said on October 20 that Paytm Payments Bank Limited (PPBL) has been fined Rs one crore for several offenses.

RBI imposes penalty on paytm payments

The RBI noted in a news release that this is related to an offense of the type described in Section 26 (2) of the Payment and Settlement Systems Act, 2007 (PSS Act).

The central bank examined Paytm Payments Bank’s application for issuance of a final Certificate of Authorisation. The RBI found that PPBL had presented material that did not reflect the factual situation.

RBI sent a notice to PPBL for an infringement of the sort described in Section 26 (2) of the PSS Act. The central bank stated, that after evaluating the written responses and oral submissions made during the personal hearing. The RBI found that the aforementioned charges are legitimate. Hence, it justifies the imposition of a monetary penalty.

Meanwhile, the RBI fined Western Union Financial Services which is a money transfer service; cross-border inbound service (customer to customer only). Western Union will bear a Rs 27.8 lakh fine for not complying with master guidelines on the money transfer service scheme.

paytm payments

Western Union had reported instances of violating the 30 remittances per beneficiary ceiling during the calendar years 2019 and 2020. According to the RBI, the company had filed an application for compounding the violation.

After reviewing the compounded application and oral representations made during the personal hearing. RBI found that the non-compliance warranted the imposition of a monetary penalty.

Furthermore, the RBI said, this action only aims at regulatory compliance discrepancies. It does not intend to rule on the legitimacy of any transaction or arrangement between the businesses and their customers.

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