The Department of Post has released new regulations for subtracting tax deducted at source (TDS) on gross cash withdrawals of more than Rs 20 lakh by account holders of Small Savings Schemes, including the Public Provident Fund (PPF). If a taxpayer has not paid income tax returns for the previous three assessment years, new rules under section l94N of the Income Tax Act 1961 will take effect on July 1-2020, for non-filing of ITR.
Know All About New TDS Rules Released By the Department of Post
1. In the case of non-ITR filers: If the gross cash withdrawal during a financial year crosses Rs 20 lakh but less than Rs 1 crore, the income tax due is 2% of the amount above Rs 20 lakh.
2. In the case of non-ITR filers: If a cash withdrawal crosses Rs 1 crore in a fiscal year, an income tax of 5% of the amount above Rs 1 crore will be due.
3. In the case of non-ITR filers: If in a financial year cash withdrawals surpass Rs 1 lakh. The amount above Rs 1 crore will be subject to a 2% income tax.
4. These adjustments have not yet been implemented, but CEPT has defined and retrieved the specifics of such depositors for the term 1 April 2020 to 31 December 2020 in order to assist Post Offices.
5. The statement will be forwarded to the relevant Circle/CBS CPCs of the respective circles, along with account details, PAN number, and the TDS amount to be withheld.
6. The circle’s in charge, CPC(CBS), shall forward the information to the relevant Post Office and allow TDS deduction from such customers/accounts without delay.
7. TDS will be deducted at the relevant Post Office. Such a deduction should be reported to the account holder in written format.
8. The concerned Postmaster will prepare and approve a voucher for the TDS amount, which will be circulated to HO/SBCO together with other SB vouchers.
9. It’s a legitimate provision, and the postmaster in action is personally liable for deducting TDS in compliance with the law.
10. Non-deduction of TDS can result in a penalty or recovery.
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Banks typically give women borrowers home loans at rates that are 50-100 basis points lower than those offered to men. Women will be able to repay the loan more easily as a result of this. While the interest rate subsidy is just 0.1 percent lower, it has a substantial effect on EMIs and makes long-term repayment easier.
If a woman took a home loan from the State Bank of India (SBI), today, she will only have to pay 6.80 percent interest on a loan up to Rs 30 lakhs. Men, on the other hand, have a 7% on the loan. Even if the difference does not seem to be significant, any saving is preferable to none at all.
Say, for example, a male home loan applicant paying an interest of 7% on a loan of Rs 31 lakhs for 20 years, would ultimately pay around Rs 57,68,224. In the case of a women home loan borrower, the loan is priced at 6.8%, the overall loan liability would be Rs 56,79,246.
Lower stamp duty charges
When a property is registered in the name of a woman, most Indian states charge a lower stamp duty. It is the fee that the buyer must pay in order for the property to be registered with the government. Stamp duty varies with different states. On the occasion of Women’s Day, the governments of Karnataka and Maharashtra cut stamp duty fees for women borrowers.
Extended Tenure
Women who apply for a home loan get a longer repayment period of up to 25 years. This allows women to lower their monthly EMI and lessen their financial burden. Women can even pay off their loans early without having to worry about facing foreclosure.
Stamp Duty in key Indian states
State
Stamp duty rate for men
Stamp duty rate for women
Delhi
6%
4%
Haryana
6% in rural
8% in urban
4% in rural
6% in urban
Uttar Pradesh
7%
Rebate of Rs 10,000 on overall charges
Rajasthan
5%
4%
Punjab
6%
4%
Maharashtra
6%
5%
Tax Benefits for women Applicants
On top of that, women get tax breaks on their home loan repayments. The maximum tax deduction on the principal sum is Rs 1.5 lakh, and the maximum tax deduction on interest repayment is Rs 2 lakh. Both husband and wife will assert tax deductions up to Rs 3 lakh if they are co-owners of the property and have separate sources of income. Both partners will be entitled to assert tax deductions on their earnings under Section 80C, Section 24, and Sections 80EE and 80EEA as a result of this.
Advantage of Government policies
The government has made it mandatory for property purchased under the Pradhan Mantri Awas Yojana (PMAY) to be registered in the name of at least one woman in the household. Women who take out a housing loan through the flagship program’s a credit-linked subsidy scheme (CLSS) get interest rate reductions. On housing loans of up to Rs 6 lakhs, women borrowers from the economically weaker segment and the low-income community (LIG) can get a 6.5 percent interest subsidy.
When it comes to tax-saving investments like bank FDs, National Savings Certificate (NSC), National Pension System (NPS) and so on, both the Equity Linked Savings Scheme (ELSS) and the Public Provident Fund (PPF) can also be considered as a smart bet by the tax-savers. But between the two there is still some uncertainty among investors while deciding which one to opt. Although PPF has long been a familiar investment strategy, due to higher returns, ELSS is cottoning up in the modern age. Furthermore, investors should be aware that the two strategies are not identical in terms of tax advantages. Since the asset class treatment of PPF and ELSS differs significantly, we’ve compared their characteristics here to help investors make an enlightened decision.
Equity Linked Saving Scheme (ELSS)
Equity Linked Savings Scheme (ELSS) is a form of mutual fund that counts for a tax exemption under Section 80C of the Income Tax Act of 1961. ELSS has been increasingly common in recent years thanks to higher returns and the shortest lock-in time in the tax-saving segment. Interestingly, it provides a better potential for long-term wealth creation, and it is favoured by those with a higher risk threshold. A large chunk of the capital invested in an ELSS goes into equity shares, and the returns are market-linked. As a result, the returns are influenced by market fluctuations. In the long term, it has proven to be worthwhile. Over the 5-years, the best ELSS funds have outperformed standard instruments like PPF and FD in terms of returns. Some key considerations of ELSS are as follows.
Returns: In the category of tax-saving investments, ELSS has generated one of the best returns. According to historical records, ELSS schemes have produced 14-24 per cent returns over 3 and 5 years according to the data of Value Research. ELSS returns, on the other hand, are market-linked and hence cannot be promised.
Tax benefits: Section 80C of the Income Tax Act, 1961 allows for tax deductions on ELSS investments up to Rs.1.5 lakh per year. ELSS returns, on the other hand, are taxable at 10% if the gain exceeds Rs. 1 lakh in the year, unlike PPF, which is tax-free at all stages.
Lock-in period: In the tax-saving category, ELSS investment has a three-year lock-in period, rendering it a comparatively liquid alternative.
SIP mode: The Systematic Investment Plan (SIP) allows you to start investing in ELSS with as little as Rs. 500 per month.
Risk: Because ELSS funds invest primarily in equity shares they are vulnerable to the intrinsic uncertainty of the market. This risk can be reduced by using the SIP mode to invest in ELSS.
Liquidity: ELSS provides more liquidity than other Section 80C tax-saving investment options because it has a three-year lock-in term. Although staying invested in ELSS schemes for the long term is always recommended, having the opportunity to redeem after three years gives investors more financial stability.
5 Best ELSS Funds In Terms Of Returns
Funds
3 year returns
Quant Tax Dir
22.28
Canara Robeco Eqt Tax Saver
20.26
Mirae Asset Tax Saver Dir
19.94
Axis Long Term Equity Dir
17.15
Kotak Tax Saver Dir
16.09
Funds
5 year returns
Mirae Asset Tax Saver Dir
24.53
Quant Tax Dir
23.39
BOI AXA Tax Advantage Dir
20.36
Canara Robeco Eqt Tax Saver
19.91
JM Tax Gain Dir
19.56
Source: Value Research
Public Provident Fund (PPF)
Public Provident Fund (PPF) is a long-term fixed-income scheme that comes with a tenure of 15 years and is backed by the government of India. As this tax-saving instrument is government-backed, the returns are assured and are not subjected to market-linked like ELSS or NPS. The government sets the interest rates on PPF every quarter. For the present quarter, the interest rates are capped at 7.1 per cent.
Risk: PPF is among the best tax-saving investments that not only provide assured returns but also tax benefits under section 80c. PPF comes with a sovereign-backed guarantee on both the principal and interest portion since it is regulated by the government of India. Despite its low returns, PPF has become a widely accepted investment choice because of its capital safety and guaranteed returns.
Tax benefits: PPF contributions fall under the exempt-exempt-exempt (EEE) classification, which means that PPF returns, maturity amount and interest earned are tax-free. Investors who make PPF deposits of up to Rs. 1.5 lakh are eligible for tax benefits under section 80C of the Income Tax Act.
Lock-in period: The mandatory lock-in period for PPF deposits is 15 years. The most serious disadvantage of a PPF is its scarcity of liquidity. PPF enables partial withdrawal and premature closure despite its long maturity period. Starting in the seventh year of subscription, partial withdrawals are only permitted once a year. After five years, the account can be closed early for the care of emergencies.
Returns: Every year, the interest rate on PPF deposits is fixed. On a quarterly basis, the government determines the interest rate. Currently, PPF is fetching an interest rate of 7.1% which is much higher than 5-Year FDs.
Deposit cap and withdrawal: PPF allows you to contribute a minimum of Rs 500 and up to a limit of Rs 1.5 lakh. You can deposit money into your PPF account up to 12 times annually. Just a few instances, such as acute illnesses, allow for the early closure. After 5 years from the end of the year in which the account was opened, partial withdrawals are permissible.
PPF Historical Returns
Quarter/Period
ROI in %
01.01.2021 to 31.03.2021
7.10%
01.10.2020 to 31.12.2020
7.10%
01.04.2020 to 30.09.2020
7.10%
01.07.2019 to 31.03.2020
7.90%
01.10.2018 to 30.06.2019
8.00%
01.01.2018 to 30.09.2018
7.60%
01.07.2017 to 31.12.2017
7.80%
01.04.2017 to 30.06.2017
7.90%
01.10.2016 to 31.03.2017
8.00%
01.04.2016 to 30.09.2016
8.10%
2013-14 to 2015-16
8.70%
2012-13
8.80%
01.12.2011 to 31.03.2012
8.60%
01.03.2003 to 30.11.2011
8.00%
01.03.2002 to 28.02.2003
9.00%
01.03.2001 to 28.02.2002
9.50%
15.01.2000 to 28.02.2001
11.00%
01.04.1999 to 14.01.2000
12.00%
1986-87 to 1998-99
12.00%
1985-86
10.00%
1984-85
9.50%
1983-84
9.00%
1982-83
8.50%
1981-82
8.50%
1980-81
8.00%
1979-80
7.50%
1978-79
7.50%
1977-78
7.50%
1976-77
7.00%
1975-76
7.00%
01.08.1974 to 31.03.1975
7.00%
01.04.1974 to 31.07.1974
5.80%
1973-74
5.30%
1972-73
5.00%
1971-72
5.00%
1970-71
5.00%
1969-70
4.80%
1968-69
4.80%
PPF vs ELSS Chart
The benefits and drawbacks of investing in ELSS and PPF are summarised below.
Factors
PPF
ELSS
Risk
PPF holdings are safe because they are backed by the Government of India.
Investments in ELSS are subject to market uncertainties.
Returns
Every year, the government announces the rate of interest for PPF investments. For the current quarter the interest rate is kept at 7.1%.
Since the returns are market-linked, they can differ based on the scheme chosen.
Tax benefits
PPF comes with an EEE (Exempt Exempt Exempt) status
If your returns surpass 1 lakh after a one-year holding period, you will be subject to a 10% LTCG tax.
Lock-in duration
It comes with a lock-in period of 15 years, after 5-years from the date of account opening partial withdrawals are allowed
Comes with a lock-in period of 3 years with no premature withdrawal option
Deposit cap
With a minimum deposit of Rs 500 up to a limit of Rs 1.5 lakh can be made either in a lump sum or installments
Deposits can be made through SIP
Our take
Generally, investors with a long-term financial goal consider investing in PPF. ELSS, on the other hand, has proven itself as an effective investment vehicle for the reasons of tax-benefits and long-term wealth formation, thanks to higher yields, liquidity, and convenience of investment. Over a longer time period, however, PPF provides significantly lower returns than ELSS. PPF is more advantageous in terms of tax gains and capital security; however, ELSS is a viable choice for higher and market-linked returns. Although both are beneficial in terms of tax savings, only PPF offers tax-free returns. PPF, on the other hand, has a much longer lock-in period than ELSS, which has a three-year lock-in period and promises better returns on investment compared to PPF. Besides that, the risk of investing in ELSS is greater than that of PPF, which offers a lower rate of return. Another thing to remember is premature withdrawal, which is approved by PPF after five years. However, ELSS does not accept partial withdrawals. While choosing which strategy to choose, consider all factors including risk apart from returns only.
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About 10 lakh bank employees and officers of the banks will participate in this two-day strike
Bank branches may remain closed for the next four days, including a two-day weekend holiday, and a two-day planned strike beginning Monday. The United Forum of Bank Unions (UFBU), an umbrella body of nine unions, will go on a two-day strike on March 15 and 16, 2021, to protest against the proposed privatisation of two state-owned banks. Starting tomorrow, banks are scheduled to be closed on March 13, 2021 (second Saturday) and March 14, 2021 (Sunday). Due to this, bank services are likely to be impacted for the next four days. However, ATM, mobile and internet banking will remain functional. Customers are advised to plan bank-related work accordingly today, in order to avoid any last-minute trouble.
Finance Minister Nirmala Sitharaman in her Union Budget 2021 speech announced the privatisation of two public sector banks (PSBs) as part of a disinvestment plan to generate Rs 1.75 lakh crore. In 2019, the government has already privatised IDBI Bank by selling its majority stake to LIC. Moreover, so far in the last four years, the government has merged 14 public sector banks. Conciliation meetings – before the Additional Chief Labour Commissioner on March 4, 9 and 10 – did not yield any positive result, PTI quoted All India Bank Employees Association (AIBEA) general secretary C H Venkatachalam as saying.
10 lakh employees to participate in strike
About 10 lakh bank employees and officers of the banks will participate in this two-day strike. Along with AIBEA the bank unions of All India Bank Officers’ Confederation (AIBOC), National Confederation of Bank Employees (NCBE), All India Bank Officers Association (AIBOA) and Bank Employees Confederation of India (BEFI), National Bank Employees Federation (INBEF), Indian National Bank Officers Congress (INBOC), National Organisation of Bank Workers (NOBW) and National Organisation of Bank Officers (NOBO), among others have given a call for a strike.
Work in SBI may be impacted
State Bank of India (SBI) has made all arrangements to ensure normal functioning in its branches and offices. However, in a BSE filing, SBI has informed that work in the bank may be impacted by the strike. “We have been advised by the lndian Banks Association (lBA) that United Forum of Bank Unions (UFBU) which comprises 9 major Unions….has given a call for all-lndia strike by Bank Employees on 15th & 16th March 2021,” it said in an exchange filing.
Canara Bank: Bank branches functioning may be hit
Earlier this month, Canara Bank also said that it has been informed by the Indian Banks’ Association (IBA) that the United Forum of Bank Unions (UFBU) has given a call for strike in the banking industry on 15 March and 16 March for the issues relating to industry level and not for any bank-level issues. It assured that the Bank has taken necessary steps for the smooth functioning of Bank’s branches/offices on the days of proposed strike. “However, in the event of strike materializing, the functioning of the branches/offices may be impacted,” it added.
Here’s all you need to about NSC and its benefits:
You will currently earn fixed returns of 6.8% annual interest and get a regular income. The interest rate on NSC is much higher than the interest rate of bank FDs, which is now as low as 5 to 6%.
There were two forms of certificates in the scheme at first: NSC VIII Issue and NSC IX Issue. NSC IX Issue was closed down by the government in December 2015. So far, only the NSC VIII Issue is available for purchase.
You can invest up to Rs.1.5 lakh in this government-backed tax-saving scheme to invoke the tax-deductions under section 80C.
You can make a deposit with a minimum of Rs.1,000 (or multiples of Rs.100), with no upper limit.
The current interest rate is 6.8% p.a., with the government revising it every quarter. It will be compounded annually and paid out at maturity.
National Savings Certificate (NSC) comes with a tenure of 5 years
By submitting the required documents and completing the KYC process, you can buy this certificate from any post office. It’s also simple to transfer the certificate from one post office or from one individual to another. To know more about the transfer process click here.
NSC is accepted as collateral or security by banks as well as NBFCs (Non-banking financial companies) or secured loans. To do so, the responsible postmaster must stamp the certificate with a transfer stamp and submit it to the respective bank or NBFC.
Both single type and joint type accounts can be opened for this scheme.
In the unfortunate event of the investor’s death, the investor can nominate a family member (even a minor) to claim the maturity amount.
You will be paid the full maturity value on the maturity date. Because no TDS is deducted from NSC payouts, the subscriber is liable for paying the relevant tax.
Premature closure of the account
In most instances, it is difficult to exit the scheme early. However, under specific circumstances such as the death of an investor or in case if court order premature withdrawal is possible. Only the principal amount is payable if an account is prematurely closed before the one-year from the date of account opening. In case the account is prematurely closed after one year but before three years from the date of deposit, the premature closure will be permitted, and interest on the principal amount will be paid at the rate applicable to the Post Office Savings Account from time to time for the entire months the account has been kept. The amount payable, inclusive of interest accrued for a deposit of one thousand rupees and at a proportionate rate for other amounts of deposits, if an account is prematurely closed after three years from the date of opening, is as stated in the table below.
The term between the account’s opening and its premature closure
Amount payable including rate of interest in Rs
Three years or more, but less than three years and six months
1221.61
Three years and six months or more, but less than four years
1263.05
Four years or more, but less than four years and six months
1305.9
Four years and six months or more, but less than five years
1350.2
Payment in case of death of the account holder
The eligible amount in the account is payable in the case of the death of the depositor of a single account or of all the depositors of a joint account. If a nomination is in effect at the time of the demise of the depositor of a single account or any of the depositors of a joint account, the nominee may send an application in Form-2 to the administrative department for payment of the eligible balance, along with proof of the depositor’s demise and, if any other nominee has also died, proof of such nominee’s demise. If there are two or more standing nominees, the eligible balance will be allocated in the proportion indicated by the depositor while making the nomination, or in equal proportion to all viable nominees if no such proportion or portion is stated. If a nominee dies, his designated portion of the eligible balance is divided among the existing nominees in the same proportion as their defined portions. If the surviving nominee is a minor, the payment will be made to a person designated by the depositor to receive that payment, or to the minor’s guardian if no such person has been designated.
Tax benefits on National Savings Certificate
A tax benefit of up to Rs.1.5 lakh can be received by investing in the National Savings Certificate under Section 80C. In addition, the interest paid on the certificates is credited back to its initial purchase, making it eligible for a tax exemption. For example, if you spend Rs.1,000 in certificates, you will be eligible for a tax refund on that amount during the first year. However, you can claim a tax deduction for both the NSC investment(s) and the interest received in the first year in the second year. This is how interest is accrued annually and added to the initial investment.
NSC vs other tax-savings investments
NSC is among the tax-saving investment vehicles under Section 80C that provide assured returns along with tax benefits. Below we compare other instruments with NSC for a better glance at a good tax-saving bet.
Tax-saving investments
ROI
Lock-in period
Risk
ELSS
14 – 22 % (3-year returns, source: Value Research)
This scheme is ideal for those looking for a secure investment alternative that helps them to save tax while generating a stable income and full capital security. However, unlike ELSS and NPS, NSC is unlikely to generate inflation-beating returns over the last 5 years. By making NSC available in post offices, the government has made it more affordable for potential investors. The National Savings Certificate is simply a fixed-income scheme that is backed by the government of India which makes it a secure bet for risk-averse investors, unlike ELSS or NPS. Seeing as you have understood what there is to discover about NSC and its advantages, you can confidently state that this safe and low-risk investment bet. This is the scheme to invest in whether you want your capital to be secure, or if you want to diversify your portfolio with an instrument that provides a fixed return as well as tax benefits.
States like West Bengal, Assam, Odisha and Maharashtra were facing maximum re-payment stress, according to credit bureau CRIF High Mark.
The early delinquencies rate in microloans remained 6% higher than the pre-pandemic level during the third quarter of this fiscal, although it improved by over 7% from the second quarter. States like West Bengal, Assam, Odisha and Maharashtra were facing maximum re-payment stress, according to credit bureau CRIF High Mark.
Releasing the Microlend Report, a quarterly update on the microfinance lending landscape in India, on Thursday, CRIF said, “High re-payment stress has continued from the previous quarter with PAR (portfolio at risk) 31-180 reaching 12.7%, having maximum stress in West Bengal, Assam, Odisha and Maharashtra.”
The report said early delinquencies by value (PAR 1-30 DPD) reduced by 7.4% coming into December 2020. NBFC-MFIs, banks and small finance banks (SFBs) witnessed greater early repayment stress in rural markets compared to urban.
“Eastern states of Assam and West Bengal witnessed very high stress with PAR 31-180 DPD reaching 23.1% and 22.8%, respectively coming into December 2020. PAR 180+ stood higher for Assam (7.9%) and Maharashtra (7.6%) compared to other states as of December 2020,” CRIF observed.
West Bengal and Assam, hit by the dual impact of the pandemic and natural calamities, have witnessed maximum repayments stress as of Q3FY21. The Assam Microfinance Institutions (Regulation of Money Lending) Bill, 2020 has been introduced to regulate operations of microfinance institutions (MFIs) and ease stress in the sector.
Notably, collection efficiencies for microfinance players fell sharply in Assam in January after passing of the Bill by the state Assembly in December last year and talks of a possible waiver of microloans ahead of the state elections. Around 47% of banks’ MFI portfolio is concentrated in eastern region, followed by 14% in south and 12.5% in west, CRIF added.
The process involves a call for other bids as public sector banks want to avoid being accused of malfeasance in taking substantial haircuts and handing back a company to its promoters.
A consortium of lenders led by Canara Bank has received a one-time settlement (OTS) offer of Rs 800 crore for bad loans worth Rs 1,428 crore from road asset developer HKR Roadways. SBI Capital Markets has sought matching or higher bids for settlement of the company’s outstanding loans.
In stressed assets where there are few other options before lenders, they have been taking the OTS route to exit the account. The process involves a call for other bids as public sector banks want to avoid being accused of malfeasance in taking substantial haircuts and handing back a company to its promoters.
HKR Roadways is owned by Gayatri Highways and Megha Engineering Infrastructure, who hold 37% each. DLF & Associates holds the remaining 26% stake, according to a bid document. As on November 1, 2019, HKR Roadways owed Canara Bank Rs 279 crore, Punjab National Bank Rs 281 crore, Union Bank of India Rs 323 crore, Indian Overseas Bank Rs 192 crore, IIFCL Rs 169 crore, Indian Bank Rs 94 crore and Bank of Baroda Rs 90 crore.
HKR Roadways is a special purpose vehicle incorporated on August 9, 2010 for design, construction, finance, operation and maintenance of four-laning of 206.858 km of the existing Hyderabad-Karimnagar-Ramagundam road (SH-1) in Telangana under design, build, finance, operate and transfer (toll) basis.
The company envisaged the project cost at Rs 2,209 crore, which was funded with a debt of Rs 1,525 crore, equity of Rs 230 crore and grant of Rs 454 crore. The original commencement of operations (COD) date of the project was August 12, 2013. However, due to delay in obtaining right of way approvals from railway authorities for over bridges and under bridges, the company approached the lenders to extend the COD. Based on the requests,the lenders accepted the revision in COD to March 31, 2015.
The project commenced toll collection from June 1, 2014. Subsequently, the company completed an additional stretch of 4.856 km, taking the total completed stretch length to 195.05 km. Post the toll revision in June 2016, the company has been collecting user fee for the stretch of 195.05 km. “There has been a significant underperformance in traffic and revenue vis-à-vis initial estimates from the first year of operations across various vehicle categories. The account has become NPA with all lenders,” the bid document said.
The State Bank of India (SBI) provides a wide range of loans to meet the financial needs of small and micro-businesses. SBI SME Gold Loan is a low-interest loan provided by the State Bank of India to help you develop your business.
The main aim of SME Gold Loan is to provide current SME units with hassle-free financial assistance against gold jewellery kept in the name of the proprietor for fund-based needs for general business purposes.
Gold Loan is your one-stop-shop for all of your urgent financial requirements. As gold rates have surged higher in recent years, you will get a decent amount as a loan. Whatever the purpose is, whether it’s for education, company growth, or anything else entirely.
A Loan Against Gold may be taken out at any time. Your monthly outgoings will be held within your budget thanks to flexible tenure and repayment options.
Now expand your business with SBI SME Gold Loan!
“Grow your business with SBI’s SME Gold Loan at very attractive rates. Apply now and avail of the loan. The process is simple and hassle-free. Visit our branch today!” tweeted SBI.
Grow your business with SBI’s SME Gold Loan at very attractive rates. Apply now and avail the loan. Process is simple and hassle free.
— State Bank of India (@TheOfficialSBI) March 9, 2021
Who are eligible for SBI SME Gold Loan?
Existing MSME Units that are proprietorship firm only, both borrowing and non-borrowing units of SBI customers, who wish to take out a loan against gold ornaments or jewellery are eligible. This loan is offered to assist borrowers in fulfilling any credit criteria, such as the purchasing of a store.
Benefits of SBI SME Gold Loan
Overdraft (OD) and Demand Loan (DL) for MSME
Loan Amount Rs 1 Lakh to 50Lakh
The competitive interest rate at 7.25 percent linked to EBLR
No financial documents required.
Only self-declared projected turnover to be submitted
Simple assessment and no balance sheet is required
Things to know
Processing Fee for a loan up to Rs 10 lakh: Rs 500 plus applicable taxes
Processing Fee for loan above Rs 10 lakh: Rs 1000 plus applicable taxes
Overdraft and demand loans can be availed for a max of 12 months
There is no charge for prepayment of the loan
The loan amount should not exceed the advance value of Gold
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Sovereign gold bonds were introduced in the year 2015 to channelize households spend on physical gold to financial investment in gold (i.e. risk free in respect of theft and other hassles such as storage cost) bearing an incentive of interest rate.
Sovereign Gold Bonds: All About Their Redemption
And these bonds issued by the RBI on behalf of the government of India have a maturity time frame of 8 years and redemption will also be in cash against the initial investment. Further upon maturity, investor will get the last interest payment installment together with the principal amount. When talking about the redemption price, upon maturity against SGBs individual will get price basis the simple average of closing price of last three business days of gold of 999 purity from the repayment date as published by the India Bullion and Jewelers Association Limited
What is the process involved in redemption at maturity of SGBs?
SGB investor will be given one month notice in advance on the ensuing maturity of the bond.
And on the maturity date, proceeds shall be credited into the bank account of the investor from which the investment was initially made or on record with the institution.
Further, in a case, there is change in any of the personal details such as e-mail, bank account etc. it should be promptly provided to the bank/Stock Holding Corporation of India Limited or Post Office.
Pre-mature withdrawal or redemption of SGBs
Now after the first two tranches were made available for early redemption, the ‘SGB 2.75% MAR 2024 TR-III’ (NSE symbol: SGBMAR24) is also due for early redemption on March 29, 2021.
Invested In SGB 2.75% March 2024 Tranche III- Available for premature redemption: What should you do given steep price correction of gold from record highs?
So, how should you deal with your investment in case in you invested in this third tranche of SGB: Here are detailed different aspects on the same:
Now simply, SGBs are bonds with a maturity term of eight years and a lock-in of 5 years. Though they can be traded in the secondary market after the end of the five year lock-in, the volume of trade in them is very low. So, to give a relaxation here or enable investors willing to redeem their investments prematurely, the RBI opens up the buyback window.
SGB Tranche
Buyback date
First SGB tranche (issued in November 2015)
November 20, 2020
Second SGB tranche
February 8, 2021
Third SGB Tranche issued on March 29, 2016
March 29, 2021
How to redeem SGB units?
For the redemption before maturity and after the lock-in period of 5 years is over, you need to inform the financial entity bank/PO/SGHCIL 10 days before the interest payment date and make a request for the same. And so now if you wish to redeem this particular third tranche that shall be available for early redemption on March 29, the request should be made by March 18, 2021.
And redemption price shall be decided as discussed above i.e. based on the average of closing price of gold of 999 purity of the last 3 business days from the repayment date as issued by the IBJA.
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The SBI Multi Option Deposit Scheme (MODS) is a form of term deposit that is linked to a savings or current account of an individual. Opposed to traditional fixed deposits (FDs), which must be completely liquidated whenever funds are necessary, MODS accounts allow you to withdraw funds in multiples of Rs 1,000 as required. The term deposit rates that were in effect at the time of the initial deposit will continue to apply to the deposit of your MODS account. The ten most important things to note about SBI’s Multi Option Deposit Scheme are mentioned below.
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