Category: Personal Finance

Points to consider before applying for a Loan

You should verify your credit history before applying for a loan. Credit history is a record of any past loans you’ve taken out and how well you’ve paid them back. Before you apply for a loan, look into the interest rate. The interest rates on loans that need collateral are often lower than those on loans that do not. All types of loans are granted in as little as 48 hours based on the borrower’s income and financial history, as well as the collateral to be attached in some situations. You will almost certainly have to pay a processing and penalty cost if you miss the repayment. These fees are determined by the loan amount and vary with the bank.

Loan For Covid Treatment- Bank Loan

Individuals who are salaried, non-salaried, or retirees would be eligible for unsecured personal loans ranging from Rs 25,000 to Rs 5 lakhs from PSBs to meet Covid treatment requirements. Banks Like SBI and Canara bank are offering this unsecured loan. SBI is offering an interest rate of 8.5% with a tenure of 5 years.

Loan For Covid Treatment- Personal Loans

A personal loan is often one of the simplest ways to obtain funds for a variety of personal requirements. Perhaps more crucially, you don’t have to put up any collateral to acquire this loan, and you have virtually no restrictions on how you can utilize the funds. Borrowing money, however, comes with a price tag in the shape of interest payments, processing fees, documentation fees, and so on.

Loan For Covid Treatment: Gold Loan

A gold loan is another option for getting cash immediately. Typically, gold loans are available for up to two years, after which you can renew the loan. You must hold gold (in any form, such as jewelry, bar, or coin) as collateral for a gold loan. Banks will lend you up to 90% of the value of your gold.

Loan For Covid Treatment: Overdraft Against Fixed Deposit

A loan against a fixed deposit is a secured loan that allows you to use your deposit as collateral in exchange for a loan. You may be eligible for a loan of up to 90% of your deposit. You don’t have to break your FD to acquire a loan against it; instead, you can borrow against it.

Loan For Covid Treatment- Loan against Security

Loans against securities such as fixed deposits, mutual funds, Demat shares, or even insurance policies are also available. These loans have lower interest rates than personal loans. The loan amount can range from 60 to 90 percent of the surrender value of an insurance policy, 80 to 95 percent of a savings account, and 50-60 percent of the stock or mutual funds.

The benefit of pledging your securities is that you can access consistent cash quickly when you need it, and you will still be able to get the benefits of being a shareholder. This implies you can take advantage of your rights to dividends and bonuses while also profiting from price changes in the shares for which you have taken out a bank loan.

Loan For Covid Treatment- Mutual Fund Redemption

Mutual fund redemption, which simply implies selling fund units, is another approach to meet your immediate fund demand. Though experts advise against selling or withdrawing mutual fund units shortly, individuals can do so in the event of a medical emergency.

While there are certain disadvantages, including taxable capital gains, it is perfect for obtaining funds quickly in the event of a medical emergency.

To get a loan against a mutual fund, the holder of the mutual fund must fill out an application and send it to the bank together with any other required documentation. The loan amount will be a proportion of the value of mutual fund units owned at the time the loan is approved.

Loan For Covid Treatment- EPF loan

Employees with an Employees’ Provident Fund (EPF) account can withdraw funds or borrow money for medical reasons. Employees’ Provident Fund Organisation (EPFO) rules provide that those who want to withdraw money for Covid treatment can do so under the guise of a medical emergency for a spouse, a family member, a parent, or a kid. The member can withdraw the money if an employee, his or her parent, spouse, or children became ill as a result of Covid.

Loan For Covid Treatment- Credit card Loan

This may not be the best option but can consider it when you are in dire need of money. A loan against a credit card is similar to a personal loan secured by your credit card. These are typically pre-approved loans that don’t necessitate any additional paperwork. Depending on the lender, this can be converted into an interest-free personal loan after a set amount of time. Following that, it will generate a certain amount of interest. There is a processing fee connected with converting a pre-assigned credit limit to a loan.

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About Sovereign Gold Bond Scheme

Sovereign gold bonds are RBI-mandated certificates issued in exchange for grams of gold, allowing individuals to invest in gold without having to worry about keeping their physical assets safe. Because gold prices are less subject to market volatility, sovereign gold bonds are a safe investment option for people. The maximum amount of gold that can be purchased through gold bonds is 4 kg per investor every fiscal year. It is possible to nominate someone. Remember to amend the nominee information throughout the investing process, or you can do it afterward. Every year, the interest rate on gold bonds is 2.50 percent. Remember, this is in addition to the gold price increase. On the nominal value, interest is paid every six months or semi-annually. Gold bonds are issued for an eight-year period, with early withdrawal permitted beginning in the fifth year. Individuals can also sell their securities on the secondary market at the gold market rate.

Sovereign Gold Bond Scheme 2021-22 – Series III Details

The most recent scheme will be available for subscription from May 31, 2021, to June 4, 2021. Based on the simple average closing price published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity on the last three working days of the week preceding the subscription period, i.e. May 26, May 27, and May 28, 2021, the nominal value of the bond is Rs 4,889/- per gram of gold.

In collaboration with the Reserve Bank of India, the Government of India has agreed to grant a discount of 50/- per gram less than the nominal value to those investors who apply online and pay for their application via the digital channel. The issue price of a Gold Bond for such investors will be Rs 4,839/- per gram of gold.

Sovereign Gold Bond Scheme Series III Scheme

Price: Rs 4,889/- per gram

Discounted Price: Rs 4,839/- per gram

Subscription Date: May 31, 2021, to June 4, 2021

Tenure: 8 Years

Redeem: After 5 Years

Should you consider investing in Sovereign Gold Bond Scheme 2021-22 – Series III?

In comparison to actual gold, gold bonds offer a more safe option and benefits to investors. Gold bonds safeguard the value of the precious metal for which they were purchased. Gold bonds can also assist you acquire a loan from a bank, another financial institution, or a non-banking financial firm (NBFC). Physical gold comes with a cost and a risk of storage. Physical gold has its own set of characteristics, such as the cost of creating jewellery and the purity of the metal. SGBs, on the other hand, does not entail any of the risks that come with owning actual gold. On the bonds, there are no heavy creating or designing expenses or TDS. Additionally, no one can steal or change ownership.

1. If you are a Director in private or public limited or One Person Company (OPC) and not reported same in the ITR :

A Director as defined in the Companies Act 2013 has to disclose all its directorship in his/her individual ITR as mandatory information in the prescribed ITR Form. The column details that are required to be filled in are Name of the Company in which you are Director, Type of the Company, PAN of the Company, Whether the company shares are listed or unlisted and lastly your Director Identification Number (DIN).

A Director may be an Independent Director, Nominee Director, Alternate Director or Additional Director or any other Director as designated by the company.

Say Mr X is a Director in 10 Companies he has to disclose details of being Director in all 10 companies as a mandatory requirement of Income Tax Department.

2. If you are a shareholder of any unlisted company shares and not have reported same in the ITR.-

Income Tax has notified in its form to provide all the unlisted shares details in your ITR form to be disclosed which you have been holding. The form asks you details such as name of the company, Type of the company, PAN of the Company, Opening Balance of such company shares, shares acquired during the year, shares transferred during the year, closing of such company shares.

For Example: Mr X acquired Paytm shares which are unlisted currently or Chennai Super Kings (CSK) from the off market transactions he/ she would have to disclose same in its ITR. Taxpayers who have launched their startup companies, incorporated new companies holding unlisted shares should report the same in their Individual ITR’s.

3. If you have a share trading business.-

Even though there are 4-5 crores of active share trading accounts in India as reported by regulatory agencies very few people declare income from the share trading activities. For the same purpose Government of India has put the compliance burden on each Depository (CDSL & NSDL) which are now responsible to report for each share transfer activities which may include sale or purchase or transfer of any securities such as Units of Mutual Funds, Shares, Unlisted Shares, Bonds, Debentures, Preference Shares or any other class of securities as notified which will also be reflected in your 26AS.

Share trading business may include intraday transactions as speculative business, future and options trading, trading of securities. If you have not reported your FY 2019-2020 share trading business transactions in the Balance Sheets and under reported your profits, from now on particularly from FY 2020-2021 these transactions are being reported by the Depository which might get you a Income Tax Notice as some of your holdings will form part of your Opening Stock as shares or securities For FY 2020-2021 which you have not reported in previous ITR Fillings.

So you might need to give a clarification to the Taxation Department.

Many Housewives having PAN and doing Share Trading Business should consider viewing there 26AS and tax liabilities arising due to same.

4. If you have invested in shares and keeping them in your long term portfolio-

A person holding shares in his demat and not reporting its gains and losses should be careful to submit all information in a proactive manner as now Government of India has put the compliance burden on each Depository (CDSL & NSDL) which are now responsible to report for each share transfer activities which may include sale or purchase or transfer of any securities such as Units of Mutual Funds, Shares, Unlisted Shares, Bonds, Debentures, Preference Shares or any other class of securities as notified which will also be reflected in your 26AS.

Your submissions will help you classify your gains or losses in identifying long term and short terms gain or loss which can further be taxed and carried forward accordingly. So it would be best to revise your FY 2019-20 reflecting your share transactions, as FY 2020-21 onwards your depository shall report all sale purchases.

5. If you are a Partner in any Partnership Firm and have not disclosed the same while filing the Individual ITR –

Income Tax Payers often don’t report their Partnership Details which are asked in the ITR Form. While getting Partnership Deed Registered and obtaining PAN for the same the TIN (Tax Information Network) also considers PAN and aadhar of each partners as given in the deed. So the Income Tax Department has information of your Partnership Firm ITR that you have not disclosed your partnership details as mandatorily required to be reported.

Schedule IF details are to be filed which seeks following information S.No, Name of the Firm, PAN of the Firm, Whether the firm is liable to Audit, Whether Section 92E is Applicable, Percentage Share of Profit in Firm, Amount of Share Profit in Firm, Closing Capital Balance in the Firm as on 31st Mar.

6. If your Reported GST Data and Income Tax differs as per 26AS –

A Business person has to ensure that his/ her business outwards supplies as reported in GSTIN are in reconciliation with the Income Tax Turnover. Any difference in the reported supplies and income tax turnover may lead to issuance of Notice by departments.

7. If your deductions have not been claimed properly –

Deductions with respect to Chapter VI A which provides investment linked deductions u/s 80C medical expenditure deductions u/s 80D series and House Interest Deduction u/s 80EE, Interest Paid on Purchase of Electric Vehicle u/s 80EEB, Interest on FDR Deductions u/s 80TTB for senior citizen. Claiming these deductions properly with consultation from tax experts may even give you tax refunds.

8. If you have not reported Exempt Income Details –

Taxpayers often forget to disclose their tax free income such as PPF Interest, EPF Interest, Dividend Income (now Taxable), other allowance and exempt perquisites, profits from partnership firms, Incomes falling under the exempt category as per Sec 10 of Income Tax Act, 1961.

9. If you have not provided correct Agricultural Income Details –

In the case when your agricultural Income is Rs 5 Lacs(Net) or more during the reporting period you are required to provide additional details which are S. No., Name of District along with Pin code in which agricultural land is located, Measurement of Agricultural Land in Acre, Whether agricultural land is owned or leased, Whether agricultural land irrigated or rain fed.

10. If you have not provided Clubbing Income details of your Spouse, Minor Child etc in terms of Sec 64 of Income Tax Act, 1961

Any income arising to spouse by way of transfer income or to your minor child in form of interest or other forms of income should be clubbed originally to the income of transferor income. Schedule SPI in your Income Tax forms requires to furnish S.No., Name of the Person, PAN of the Person, Aadhar Number of the Person, Relationship, Amount in Rs and Head of Income in which it is included.

11. If you have not reported Investments made in Infrastrucure Funds, Real Estates Infrastructure Funds etc. –

Recently we have seen many InvITs and REITs being listed in the Secondary Markets. Subscribers to these units InvITs & REITs are required to report information under Schedule PTI (Pass through Income details) from business trust or investment fund as per section 115UA, 115UB.

The details asked in this schedule are Sl., Investment covered by section 115UA/115UB, Name of Business trust/ Investment trust, PAN of Business Trust/ Investment Trust, Sl, Head of Income, Current Year Income, Share of Current Year Loss distributed by Investment fund, Net Income/ Loss, TDS on such Income amount, if any.

The subcribers of IndiGrid InvIT, IRB InvIT, PowerGrid InvIT, Brookfiel REIT, Embassy Office, Mindspace REIT and other private INVIT’S & REIT’S have to report in this particular schedule.

12. If you have not reported all your bank accounts whether current, savings or dormant

– A person has to disclose all its bank accounts whether savings or current account in the ITR. He/ she may have to select in which particular account he or she wants to receive tax refund.

Conclusion

A person filing ITR must be diligent enough to ask all the information above and submit it in a correct manner to the department with full honesty. As the Income Tax Department in recent times have signed multiple data sharing agreements with regulatory bodies such as SEBI (Securities Exchange Board of India), MCA (Ministry of Corporate Affairs), GSTIN (Goods and Service Tax Information Network), CBIC (Central Board of Indirect Taxes and Customs) to capture maximum information about the taxpayers and correlate the information as provided by them to find any discrepancies which may lead to issuing of Notices to the taxpayers.

Investment

oi-Roshni Agarwal

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Updated: Sunday, May 30, 2021, 7:54 [IST]

Similar to stocks that offer dividend to its investors from the company’s profits, there are dividend yield mutual funds. Dividend income is an income over and above the NAV appreciation in case of mutual funds. While, dividend income for a mutual fund is not ensured, the nomenclature of the fund category largely specifies fund manager’s chosen strategy of providing regular income to its investors as dividend income.

Here for your reference we provide you with all the inputs regarding dividend yield mutual funds:

Advantages of Dividend yield paying mutual funds

These are less risky in comparison to the equity category.

Aim to provide a regular stream of payment to its investors and are best suited for retired folks who seek safe revenue source.

So, if you are considering to get dividend income by investing in mutual funds, here are some of the best ones, you can consider for investment:

Best Dividend Yield Fund With Their SIP Performance (Absolute Returns)

Dividend Yield Funds	AUM	NAV as on May 28	1 year	3 year	5 year
Principal Dividend Yield Fund- Growth	Rs. 201 crore	74.21	26%	38%	50%
UTI Dividend Yield Fund- Growth	Rs. 2624 crore	90.78	28%	39%	49%
Aditya Birla Sun Life Dividend Yield Fund-Regular Plan	Rs. 741 crore	218	28%	37%	37%

1. Principal Dividend Yield Fund- Growth:

The mutual fund by Principal mutual fund house is categorized a Thematic-Divided Yield fund from the equity category. The fund typically invests in stocks with a high dividend yield i.e. the amount of dividend paid in comparison to the stock’s market price.

SIP in the fund can be started with as less as Rs. 500 while the lump sum fund investment has to be for Rs. 5000. Not to ignore this is a CRISIL 3-star rated fund.

The fund announced the most recent dividend for which the record date was December 17, 2020.

Top holdings of the fund are in Infosys, TCS, Reliance Industries, UltraTech Cement, Navin Fluorine, ICICI Bank etc.

2. UTI Dividend Yield Fund- Growth:

The fund carries an expense ratio of over 2 percent. SIP in the fund can be started for Rs. 500 per month. Benchmark of the fund is NIFTY Div Opps 50 TRI.

Top holdings of the fund are Infosys, Tech Mahindra, HUL, ITC, Tata Steel, Mphasis etc. The fund declared the last dividend for which the record date was of March 22, 2021.

3. Aditya Birla Sun Life Dividend Yield Fund-Regular Plan- Growth:

The expense ratio of the fund is 2.5 percent. Also, the SIP in the fund can be started for Rs. 500. The fund’s investments are into ITC, L&T Infotech, ITC, NTPC, LVMH Louis Vuitton, Starbucks etc.

Taxation of dividend yield mutual funds:

Capital gains:

If the held units of the mutual funds are sold after a holding period of 1 year, then gains over Rs. 1 lakh per financial year are taxed at 10% rate. Gains up to Rs. 1 lakh are exempt from tax implication.

In a case if the units are sold within one year of adding the investment, then gains are taxed at 15 percent rate.

In respect of the dividends earned:

Dividend earned by the investor are added to his or her income and taxed as per taxpayer’s slab rate. Note if the dividend income for the FY exceeds Rs. 5000 then AMC also deducts the TDS at the rate of 10 percent before paying off the dividend.

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