February 2021 – Page 88

A good approach to enhance your wealth is to invest, and in order to gain the best return on investment there are many high-return investing opportunities, such as Public Provident Funds, bank or corporate fixed deposits, post office savings schemes, FDs of small finance banks, and more. The preference of an investment option, though, varies according to your risk appetite, strategic objectives and liquidity. Fixed-income instruments such as fixed deposits are the ideal investment vehicles for investors finding lucrative returns and stability, along with the security of their principal.

A fixed lock-in term of 3 months falls with a Bajaj Finserv or Bajaj Finance Fixed Deposit. Although there is no penalty towards premature withdrawal of money, in terms of accrued interest one can lose money. Therefore, in the event of a monetary crisis or other emergency, the account holder can just attempt to opt for early withdrawal. Conversely, without missing out on the interest, one can apply for a loan against FD and get the necessary investment capital. Bajaj Finserv provides its customers a fixed-deposit scheme with competitive interest rates and high credit scores from the nation’s leading rating firms.

Key benefits of Bajaj Finance FD

It is of great significance to find the best financial institution to invest in a fixed deposit. Bajaj Finance Fixed Deposit is a perfect choice for those searching for a blend of stability and attractive returns by taking into account the benefits covered below:

It is best to be committed for the longer term while investing in a Fixed Deposit. For tenures of 36 months or more, Bajaj Finance provides the best FD interest rates. By holding for 36 months or longer, you can enjoy the profit of FD interest rates of up to 7.25 percent. Consequently, owing to the advantage of compounding, your yields are higher by selecting a longer tenure.

Bajaj Finance provides an additional rate advantage of 0.10 percent on online deposit for those under 60 years of age. This ensures that from the convenience of your home you can open an FD account and reap benefit from an added rate gain. Elderly people can also benefit from a 0.25 percent additional rate benefit, which lets them get better returns against their fixed deposit.

It is better to pick payouts at maturity for those seeking to increase their corpus with Bajaj Finance. Bajaj Finance proposes a better cumulative Fixed Deposit interest rate with payouts at expiration of the FD tenure. If you want to boost your returns with Bajaj Finance FD, pick auto-renewing your deposits and receiving an additional interest rate of 0.10 percent. Bajaj Finance helps you to deposit effortlessly and also provides the best security on your investment, with the highest ICRA and CRISIL scores, which ensures that your principal amount is secured.

It is incredibly convenient to invest in a Bajaj Finance Fixed Deposit. Just visit the online FD form for Bajaj Finance, and fill in your personal, banking and other required specifics. Via online banking, you can make deposits and earn your online Fixed Deposit Approval. You can get the Fixed Deposit Receipt by mail at your confirmed address.

Loan against FD

Bajaj Finserv gives its customers up to 75 percent of the amount deposited in a cumulative fixed deposit and up to 60 percent of the capital deposited in a non-cumulative fixed deposit in a fixed deposit system. Depositors can also take advantage of Bajaj Finserv online fixed deposit loans of up to Rs. 4 lakh.

Multi deposit option

You can also opt to contribute to several deposits with a single cheque payment when filling in the FD application form of Bajaj Finserv. Prefer for varying maturity periods for both of these deposits and patterns of interest payouts. Prefer for varying maturity periods for both of these deposits and patterns of interest payments. You can withdraw prematurely from a single deposit if you need immediate funds, without breaking any deposits. Contributing in a Bajaj Finance Fixed Deposit provides you a blend of easy investing procedures, up to 7.25 percent attractive interest rates, and deposit cover, making it one of the best investment opportunities for you to quickly improve your wealth.

Bajaj Finserv FD Rates

The positive effects of Bajaj Finance FD are competitive FD interest rates, flexible tenures, periodic interest payments, multi-deposit facilities, auto-renewal facilities, and convenient FD loans can be made. By investing online, those under 60 years of age can receive the higher rates of up to 7.10 percent, whereas elderly people can get fixed returns of up to 7.25 percent on a minimum deposit amount of Rs 25,000. This guarantees a hassle-free savings approach and the privilege of increasing your deposits with a decent fixed deposit rate. With effect from 01 Feb 2021 here are the current FD interest rates delivered by Bajaj Finance on cumulative deposits, with payouts at maturity, for those seeking to invest in an FD for higher and guaranteed returns.

Tenure ROI in % for deposits up to Rs.5 crore

12 – 23 6.15

24 – 35 6.60

36 – 60 7.00

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Tenure	ROI in % for deposits up to Rs.5 crore
12 – 23	6.15
24 – 35	6.60
36 – 60	7.00

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Budget 2021: How Interest Earned On PF Above Rs 2.5 Lakhs Is Going To Taxable?

February 2, 2021 root Personal Finance

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Personal Finance

oi-Vipul Das

|

Published: Tuesday, February 2, 2021, 12:36 [IST]

In introducing the 2021 Budget, finance minister Nirmala Sitharaman announced the tax treatment of interest on multiple provident funds where income is exempted. Actively, Section 10 of Clause (11) of the Act allows for a waiver from any payout from a provident fund to which the Provident Funds Act 1925 relates or from any other provident fund developed by the Government. Which implies that, currently, the income received on the EPF in the employee’s hands is entirely exempted from taxation. The current regime specifies that circumstances have come to the attention that certain employees contribute considerable amounts to these accounts, and under clause (11) and clause (12) of section 10 of the Act, any interest received on such contributions is exempted from taxation.

This is particularly significant in the field of employees who contribute towards VPF. Consequently, the FM discloses that it is provided that the regulations of clauses (11) and (12) of section 10 of the Act should be added, provided that the restrictions of such clauses do not extend to the interest earned on the holder’s account during the preceding year, to the degree that they refer to the amount or the gross amount of the deposit rendered by the individual in excess of Rs 2.5 lakh in the preceding year. The EPF’s rate of interest is now 8.5 per cent annually. For 2019-20, the government further reduced the Employee Provident Fund interest rate to 8.50 percent from 8.65 percent in the last year. The deposit towards EPF contributes to 12% of the basic wage.

That being said, the laws enable the contribution to be raised by up to 100 per cent of the minimum wage. Under Voluntary Provident Fund additional contribution also counts for tax deduction u/s 80C. Although the adjustment in the taxation of employer contributions in 2019 will have an effect on higher salaried workers, the adjustment introduced in the current budget in terms of interest received on the contribution by employees will seek a big influence. This ensures that the interest gained on the PF balance will be subject to taxation in the future if the investment crosses Rs 2.5 lakh per annum.

How to deal with it?

The 2021-22 Budget has loosened rules that take advantage of the available tax-saving investment opportunities for high-income employees. After that, interest gained above Rs 2.5 lakh on PF investments is subject to taxation. This rule extends to contributions which are rendered on or after 1 April 2021. This is a reinforcement of last year’s decision by the government to fix an annual ceiling of Rs 7.5 lakh for employer contributions, any contribution above which was made taxable, to the PF, National Pension Scheme (NPS). PF contributions were entitled to tax deductions up to a limit of Rs 1.5 lakh per year under Section 80C.

Interest earned and withdrawals are completely tax-free. Since it offers guaranteed returns close to the EPF, this is a prominent low-risk savings avenue among other low-risk fixed income investments, such as limited savings schemes of post offices and bank deposits. Since it offers guaranteed returns close to the EPF, this is a prominent low-risk savings avenue. Earnings on such low-risk fixed income investments, such as limited savings schemes of post offices and bank deposits, are related to the economy. That being said, it could be simpler said than done to stratify the interest on the current corpus accrued over the years from the one received on the contribution beyond Rs 2.5 lakh per year for tax reasons.

And after the expiration date of the deadline for filing IT returns, taxpayers were entitled, with interest and penalty fees, to file outstanding returns. In the event of any mistakes, taxpayers may still amend their returns submitted in a given year. The time period for the filing of amended returns was either at the close of the appraisal year or prior to the expiration of the previous appraisal. The Budget 21-22 stated that the date may be advanced by three months. It is now possible to file the amended return three months before the end of the applicable appraisal year or before the expiration of the assessment whichever is earlier. A higher rate of tax deduction at source (TDS) is also introduced by the Budget for the taxpayers who did not submit their tax filings in any of the preceding years. In the case of these kinds of individuals, their wages for the current year will be entitled to a TDS rate which is 5% or double the TDS rate usually applied to that profit, whichever is greater. For example, if the rental profit surpassed Rs 2.4 lakh in any year, the occupant was supposed to subtract TDS on the rent at 10 percent.

Currently, if you haven’t submitted your ITR in the last two years, the TDS limit on your rental profit was already 20%. The budget 21-22 has reinforced guidelines for the deposit of employee contributions by employees into different welfare schemes. Any lag on this consideration typically results in the employees’ diminution of income. In the process to facilitate the appropriate contribution by the employers of the employee’s contribution to these investments, it was recommended to clarify that the delayed contribution by the employer of the employee’s contribution should never be permitted as a tax benefit to the employer.

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RBI appoints external IT firm for special audit of HDFC Bank’s IT infrastructure

February 2, 2021 root Banking & Finance

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The Reserve Bank of India has appointed an external IT firm for carrying out a special audit of the IT infrastructure of HDFC Bank, which has faced a number of outages in its digital banking services.

“The RBI has appointed an external professional IT firm for carrying out a special audit of the entire IT infrastructure of the bank under Section 30 (1‐B) of the Banking Regulation Act, 1949 (“the Act”), at the cost of the bank under Section 30 (1‐C) of the Act,” HDFC Bank said in a regulatory filing on Tuesday.

Also read: HDFC Bank’s internet, mobile services hit for third day in a row

The bank shall accordingly extend its cooperation to the external professional IT firm for conducting the special IT audit, it further said.

Also read: HDFC Bank’s multiple digital outages are credit negative: Moody’s

RBI had on December 2 last year directed HDFC Bank to temporarily halt sourcing of new credit card customers as well as launches of digital business generating activities planned under its proposed programme ‐Digital 2.0.

The directive had come after a sudden outage at one of HDFC Bank’s data centres impacted its digital and mobile banking and ATM and payment services on November 21, 2020 and a similar outage in December 2019.

In an analyst call after its third quarter results, HDFC Bank had said it had submitted a blueprint to the RBI on how to address these digital outages. The bank had said the action plan will take 10-12 weeks for implementation, and further timeframe will depend on the RBI’s inspection.

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2 Comments Audit, Digital, external, hdfc bank, infrastructure, IT, IT firm, outage, RBI, special

Siddhartha Mohanty takes charge as MD of LIC

February 2, 2021 root Banking & Finance

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Siddhartha Mohanty took charge as the new Managing Director of Life Insurance Corporation of India on February 1.

“He was appointed as Managing Director vide Government of India notification dated January 20, 2021,” LIC said in a statement.

Also read: FM blows the privatisation bugle

Before this, he was Managing Director and Chief Executive Officer of LIC Housing Finance. He started his career as a direct recruit officer with LIC of India in 1985

Mohanty replaces TC Suseel Kumar, who retired on January 31, 2021.

LIC has four MDs and one Chairman.

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RBI appoints IT firm to audit HDFC Bank’s entire IT infrastructure, BFSI News, ET BFSI

February 2, 2021 root Banking & Finance

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HDFC Bank in an exchange filing has said that the regulator has appointed an external IT firm to carry out entire audit of the bank’s IT infrastructure.

Previously the bank had notified that with recent events of outages in the bank’s digital channels over the past two years in the bank’s internet banking and payment system on November 21, 2020 was due to power failure in the primary data centre.

The bank in the exchange notification said, “RBI has appointed an external professional IT firm for carrying out a special audit of the entire IT infrastructure of the Bank under Section 30 (1‐B) of the Banking Regulation Act, 1949 (“the Act”), at the cost of the Bank under Section 30 (1‐C) of the Act.”

It added, “The Bank shall accordingly extend its cooperation to the external professional IT firm so appointed by
RBI for conducting the special IT audit as above.”

The RBI had disallowed the bank to onboard new credit card customers and rolling out any new digital initiatives on the back of outages which had impacted customers and payment channels.

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Russell Gaitonde, Deloitte, BFSI News, ET BFSI

February 2, 2021 root Personal Finance

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Russell Gaitonde, Partner at Deloitte said, “This year’s budget was a fairly difficult act that the government had to achieve given that this year was a very unusual one with the global pandemic. The economy needed a lot of fiscal stimulus to get back on the path of recovery and i am glad that the hon’ble finance minister has gone down the path of giving the requisite fiscal stimuluses in terms of the investments proposed to be made in the infrastructure sector as well as the PSU divestments plans and recapitalisation of PSB banks. It is a road map that the FM has put out saying that the government intends to bring down the fiscal deficit to 4.9% by FY26. It’ll take around 5 years for the government to bring down the fiscal deficit but clearly there is an intention and path they have in mind.”

He added, “If you look at the budget in terms of balancing the books, the FM had to raise funds from somewhere. One option was to either increase the taxes or to effectively do it by way of a divestment plan. Had there been an increase in taxes which the FM has not done, there would have been a lot of human cry and created a negative sentiment. To balance that out the plan of the government is to go down the path of disinvestments which is the right thing to do.”

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Veena Sivaramakrishnan, BFSI News, ET BFSI

February 2, 2021 root Personal Finance

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The resolution framework for stressed assets has been in the works for sometime from the time of Project Sashakt itself and the AMC-ARC structure has been attractive leading to competition because there is now an expectation that there will be competition in this market so the price discovery would get better because NPAs don’t have a mechanism by which they’re traded.

Veena said, “AIFs coming into fray would allow other players to also enter into this market which is not permitted directly and certainly the first step in the right direction.”

On the framework, she says, “ARC purchases bad debt and looks at recovering directly from the borrower and is fairly limited. With an AMC coming into picture means there’s a specialist in the frame who can provide the know-how on actual resolution and outside IBC.”

An expert AMC will play a role in restructuring an account and therefore arrive at a resolution.

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Leave a comment amc, arc, banks, budget 2021, IBC, Shardul Amarchand Mangaldas, stressed assets

Govt to conduct 2 more G-Sec auctions in March

February 2, 2021 root Banking & Finance

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The Reserve Bank of India (RBI) will be conducting two more Government Security (G-Sec) auctions in March 2021 even as the size of the auction it will be conducting from now till the week ending March 12, 2021 has been increased by up to ₹7,000 crore.

With Finance Minister Nirmala Sitharaman announcing on Monday that the Government would need another ₹80,000 crore, the Government of India (GoI), in consultation with the RBI, decided to modify the indicative calendar for issuance of Government dated securities for the remaining part of the second half of the fiscal 2020-21 (February 1 – March 31, 2021).

Also read: Will Finance Minister’s gamble with market borrowing work?

According to the revised issuance calendar for marketable dated securities for the remaining period of H2 (February – March 2021), the government will be borrowing between ₹4,000 crore and ₹7,000 crore more every week than what it planned to borrow as per the calendar issued on October 15, 2020.

Also read: Now, SEBI may get to regulate G-Secs

The Government of India, in consultation with the RBI, reserves the right to exercise the green-shoe option to retain additional subscription up to ₹2,000 crore each against one or more security/ies indicated in the auction notification, RBI said in a statement.

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