Category: Personal Finance

What you need to know about the Nifty PE change

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Whether the Indian stock market is in the midst of a bubble or in the midst of a strong bull run is the subject of furious debate today. One number that crops up often in such debates is the Nifty 50’s Price-Earnings (PE) ratio. Seasoned investors and professional fund managers often use the Nifty 50’s PE number to quickly gauge if markets are expensive or cheap. But the National Stock Exchange recently announced a change to the Nifty PE calculation that promises to reduce the index PE. Here’s how this will affect your investing decisions.

I read that Nifty PE will drop from 40 times to about 35 times on March 31, 2021. Does this mean Indian markets will become more attractive to buy?

This change in the Nifty50’s official PE ratio is due to a change in the method that the NSE uses to calculate this number. So far, the NSE has been calculating the Nifty PE ratio based on standalone earnings of the 50 companies that make up the index for the trailing four quarters.

Now, it plans to use consolidated earnings. According to Bloomberg, the standalone earnings of Nifty companies for the 12 months ended December 31, 2020 was about ₹371. When you divide the Nifty50 index value of 14,957 by this number, you get a PE of 40.3 times.

But Bloomberg puts the consolidated earnings of the Nifty firms at ₹420 for the same period. With this number, the Nifty PE ratio would fall to 35.6 times.

Now, this change does not make the Nifty50 more or less attractive because only the method of calculation has changed.

Had NSE used the consolidated PE all along, it would have been in the 35 range even now.

But we’ve gotten by with the standalone earnings for so long. Why this change now?

Because this is a more accurate representation of the true profitability and valuation of Nifty companies. Standalone earnings of a company reflect only the profits made by it alone, without considering the operations of its subsidiaries.

A decade ago, companies making up Nifty did not really have too many subsidiaries that made a material contribution to their profits. But this has substantially changed in the last decade, with many companies making large overseas acquisitions, and banking companies diversifying into new lines of business such as insurance and mutual funds.

These subsidiaries today make very material contributions to the parent’s performance. This has made it imperative for investors to track the consolidated earnings of Nifty firms more than their standalone earnings.

Today, Bloomberg data tells us that the consolidated earnings of Nifty are about 16 per cent higher than the parent’s earnings. In the last 10 years on the average, Nifty’s consolidated earnings have been 14 per cent higher than the standalone earnings.

What decides the gap between consolidated and standalone earnings?

Given that the global subsidiaries of Indian Nifty firms account for much of this gap, Nifty’s consolidated earnings are likely to be much higher than standalone earnings when the global economy does better than the India.

Now that we have a new PE calculation, how will we know if the index is expensive or cheap based on history?

If we average the monthly PE for the Nifty50 over the last 10 years using time series data from Bloomberg, the average based on standalone earnings is about 23 times. Using consolidated earnings reduces the long-term average PE to about 20 times. This may be the new benchmark against which you should measure the Nifty PE (after March 31) to gauge whether it is expensive or cheap.

Useful, but can we know the Nifty PE levels at which previous bull markets topped out? And where did it find bottom?

The dotcom bubble popped when the Nifty PE hit 26.5 times at an index value of 1,662 points on January 10, 2000. At that time, there wasn’t much of a difference between the Nifty’s standalone and consolidated earnings. The more recent infrastructure, real estate powered bull market from 2003 to 2008 topped out when Nifty50 hit 6,357 points. At this index level, Nifty’s official PE based on standalone earnings was 26.5 times. But reworking it based on consolidated earnings leads to a PE of 23.3 times.

After the dotcom crash, the Nifty bottomed out at about 850 points at an PE of 12.3 times – both consolidated and standalone. In the meltdown induced by the global financial crisis, the Nifty wasat about 2,500. The official Nifty PE based on standalone earnings was then at 10.7 times, but based on consolidated earnings it was at just 9.2 times. Broadly, therefore, history suggests that you should be wary of market valuations when the Nifty consolidated PE exceeds 22 and look for bear markets to end when the PE hovers in the broad range of 10-13 times.

Are we to infer that the market remains quite expensive, irrespective of whether we use consolidated or standalone earnings?

Yes. The Nifty PE would need to fall to the 20-22 times before you can deem valuations normal. Purely relying on arithmetic, this can happen in two ways. If Nifty earnings remain unchanged as of today (₹420), the index would need to correct to 9,240 levels to moderate the Nifty PE to 22 times. Alternatively, if the index were to stay put at 15,000 levels, Nifty earnings would need to bounce back to ₹680 levels on a consolidated basis to moderate the PE. Both metrics can also meet somewhere in-between.

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NPS vs Other Tax Saving Investments: Where A Tax Saver Should Invest?

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NPS vs ELSS

Equity-Linked Savings Scheme (ELSS), also known as ELSS, is a tax-saving mutual fund that allows you to save up to Rs 1,50,000 per year under Section 80C. Not only a tax benefit and a lower minimum investment of Rs 500 (either lump sum or SIP) ELSS comes with a short lock-in period of only 3 years. Long-term capital gains (LTCG) of more than Rs 1 lakh is taxed at a rate of 10%. The National Pension System (NPS) is a government-backed scheme in which people contribute during their working years in order to receive a pension after they retire. NPS investments qualify for a tax exemption of Rs 1,50,000 under Section 80C of the Income Tax Act, as well as an additional Rs 50,000 deduction under Section 80CCD (1B). You can withdraw 60% of the NPS corpus tax-free upon maturity, while the remaining 40% (taxable at the current tax rates) is used to purchase annuities. Because ELSS is entirely equity-oriented, it is marginally riskier than NPS. The overall equity allocation in the NPS, on the other side, is limited at 75%. Additionally, NPS enables you to invest in asset classes that are comparatively secure, such as corporate debt and government securities. In the long term, though, equity yields are relatively higher than corporate debt and government securities, those who want a lower tax outgo and to build secure retirement corpus NPS can be a good bet. You can contribute towards ELSS, on the other side, if you want to create a corpus for long-term goals like your children’s higher education, marriage, and so on, while also limiting your tax liability.

NPS vs PPF

NPS vs PPF

Both of these investment vehicles are simple to invest in. By filling out the application form or online, you can open a Public Provident Fund (PPF) account at any registered bank or post office. You can (between the age of 18 to 65), on the other hand, acquire a PRAN application form from any of the Point of Presence – Service Providers (POP-SP) or can even register for NPS at eNPS website (https://enps.nsdl.com/eNPS/NationalPensionSystem.html). Along with partial withdrawal options, PPF comes with a lock-in period of 15 years. After five years from the end of the year in which you made the initial subscription, you can withdraw up to 50% of your PPF balance only once per year. You can save up to Rs 1.5 lakh by claiming deductions under section 80C in a financial year by investing in PPF. PPF has EEE status, which ensures that the money invested, the interest gained, and the amount collected back at maturity are all tax-free. However, regular income earned from annuities purchased with 40% of the NPS corpus, on the other hand, is subject to taxation. PPF can be considered by anyone who wants to receive assured tax-free returns in order to fulfill goals such as higher education for children, marriage and so on. Individuals who are more risk-averse tend to invest in PPF because it has assured returns. PPF interest rates are currently at 7.1 per cent. Even partial withdrawal is permitted under the NPS withdrawal guidelines for specific reasons such as children’s schooling, marriage, or serious illness. Because the interest rate on PPF has been declining in recent years, there is a possibility that NPS will provide you with more decent market-linked returns compared to PPF. While both are attractive retirement savings alternatives, the only way to build a robust retirement corpus in the long-run is to invest in NPS.

NPS vs Tax Saving Fixed Deposits

NPS vs Tax Saving Fixed Deposits

The returns on tax-saving bank FDs are guaranteed. The interest rates charged to senior citizens are marginally higher than those offered to those under the age of 60. You can withdraw three times from your NPS account over its term, according to certain provisions, however, you can’t close or liquidate a tax-saving bank FD before it reaches maturity, which is usually five years. The interest received on a tax-saving FD is taxable according to the investor’s tax bracket, and if the gross interest earned in a financial year exceeds Rs. 40,000, TDS is applicable. For senior citizens, the quota is Rs. 50,000 respectively. A tax-saving FD can be considered by someone trying to reduce his or her tax outgo. That being said, keep in mind that the maximum amount that can be received as a tax deduction is Rs. 1.5 lakh, which is the limit set by section 80C. It is important to note that in order to qualify for the Section 80C tax benefit, you must invest in this scheme for at least 5 years. On 5-year deposits, one can now get up to an interest rate of 7.5%. Anyone with a low-risk appetite and a need to earn guaranteed returns over the long term can consider 5-year tax-saving FDs over NPS.

NPS vs NSC

NPS vs NSC

You can conveniently invest in National Savings Certificate (NSC) at a post office, and it has a 5-year maturity period. The risks associated with NSC are low since it is a fixed-return instrument. Every quarter, the government sets the rate of return. NSCs are open to all Indian residents and HUFs. It’s worth noting, though, that NSC taxable interest isn’t charged to the investor. It is, though, re-invested, and this amount qualifies for a tax deduction under section 80C. NSC is suitable for investors with a low-risk appetite and a need for guaranteed returns. The NSC has an interest guarantee as well as full capital security. That being said, unlike ELSS and the National Pension System, they are still unable to produce inflation-beating returns. You can invest up to Rs.1.5 lakh in this government-backed tax-saving initiative to receive the benefits of 80C deductions. 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. If you want to gain tax benefits and get assured returns across the term of 5-years you can consider tax-saving FDs or NSC over NPS.

NPS vs EPF vs VPF

NPS vs EPF vs VPF

The interest received on employees’ PF contributions of more than Rs 2.5 lakh per year is proposed to be taxed in Budget 2021. This comes as a shock to high-earners who had previously taken advantage of the government’s tax-cut provisions. With tax-free 8.5 per cent returns and a sovereign guarantee, the EPF has proven to be a very profitable investment strategy. Interest is taxable if the Employees’ Provident Fund (EPF) + Voluntary Provident Fund (VPF) contributions surpass more than Rs 2.5 lakh. However, VPF contributions are still a viable choice, as VPF still provides 8.75 per cent by considering the tax bracket of 30%. Although the post-tax rate is not very strong, it is much higher than bank FDs, debt funds, NCDs and so on. Even though interest received on contributions above Rs 2.5 lakh will now be taxable, EPF+VPF returns are enticing considering the current rate cut scenario. That being said, EPF returns are assured, while NPS returns are not, despite the fact that NPS can generate higher returns over EPF in the long-term. Experts claim that investors should invest in both NPS and EPF because they each have their own combination of benefits and drawbacks. Using a blend of appropriate retirement options might be a smart strategy. As a result, by considering taxation on interest and maturity first, employees with higher income status can diversify their portfolio across (EPF+VPF), PPF, and NPS to maximise returns.



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Best Student Credit Cards in India for travelling abroad 2021

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Features of Student Credit cards

In comparison to other credit cards, the student credit card has a very low credit limit. The credit limit is between Rs.2000 and Rs.25000. The student credit cards are valid for the duration of their studies. This card’s validity ranges from three to five years. There is no joining fee for the student credit card. The annual fees for this card are also extremely low. Some credit cards are best when students are going abroad, they can pay using the student credit card.

Documents required for Student Credit Card:

  • Birth Certificate
  • College Student Proof
  • Resident Address Proof
  • Passport Size Photograph
  • Aadhaar or PAN Card
  • Passport photocopy

In the case of a forex card, the student must Submit related documents of appointment/admission/university letter.

SBI Student Plus Advantage Credit Card

SBI Student Plus Advantage Credit Card

This is a special credit card available only to State Bank of India education loan customers. SBI Student Plus Advantage Card can be obtained by making a fixed deposit at any State Bank of India branch. Interest-free credit is available for 20 to 50 days on retail transactions when the previous month’s balance is paid in full.

Features of SBI Student Plus Advantage Credit Card:

  • In India, there is a 2.5 percent fuel surcharge waiver at any petrol pump.
  • It allows you to withdraw up to 80% of cash
  • For all department store purchases, you’ll get 5% back in value and 10x Rewards points.
  • There is a Flexipay alternative to convert credit card bills to EMIs.

ICICI Bank Student Travelcard

ICICI Bank Student Travelcard

The ICICI Bank student credit module is designed specifically for students. It helps students manage all of their living costs as well as high-value purchases such as paying university fees/hostel fees and purchasing plane tickets. The ICICI Bank Student Travel Card is a foreign exchange card for students studying abroad. This card comes in five different currencies and is good for three years. It provides travel insurance as well as emergency assistance. USD, EUR, GBP, AUD, and CAD are the five currencies that can be loaded onto a card.

The card can be loaded remotely by parents or guardians in India.

A card can be used for online purchases as well as physical swipes all over the world.

Joining fees are Rs.150, reload fees are Rs.100, and there is a 3.5 percent + GST cross-currency charge.

HDFC Multicurrency Platinum ForexPlus Chip Card

HDFC Multicurrency Platinum ForexPlus Chip Card

It has PayWave technology built-in, which allows you to make contactless payments at stores. Individuals can make safe payments by simply waving their cards at a distance of 4cm from the payment machine. This card can consist of up to 22 different currencies. You can save money and time by holding 23 foreign currencies on your HDFC Multicurrency Platinum ForexPlus Chip Card.

  • This provides you with full insurance against any potential fluctuations in foreign exchange rates.
  • You’ll also get Rs. 5 lakh insurance policy in case of card abuse, crash, or theft.
  • Protection against Foreign Exchange rate fluctuation
  • Online Currency Management
  • Additional security with temporary card blocking facility

HDFC Student Add-on Card

HDFC Student Add-on Card

For all practical purposes, the add-on card functions similarly to a credit card. Unless the parent cardholder sets a sub-cap, the add-on card shares the credit limit with the main card. An add-on card can be given to someone over the age of 18.

Expenses on an add-on card are included in the parent card’s monthly statement. As a result, parents can conveniently keep track of their children’s expenses. You may also get transaction reminders to keep track of your spending. Add-on cards don’t need much paperwork, and the application process is straightforward. Purchases made with add-on cards can be made both online and offline.

Bihar Student Credit Card

Bihar Student Credit Card

This credit card is planned specifically for students who are pursuing higher education in Bihar. The program was implemented as a means of encouraging state students to pursue higher education. With this card, a student who has completed class 12th can borrow up to Rs. 4 lakhs, which can be repaid once the student has completed their education and found a decent job. This card would be backed up by the government. To be eligible for the Bihar Student Credit Card Scheme, a student must have a co-applicant – either their parents or guardians – who can provide proof of income and have a secure job.



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5 Best Private & Public Sector Banks Providing Returns Up To 6.75% On Tax Saving FDs

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10 things to know about tax saving FDs

According to current income tax statutes, you can claim up to Rs 1.5 lakh in tax-saving fixed deposits under Section 80C of the Income Tax Act. Below are some lesser known facts of tax saving FDs that you need to know:

  1. Individuals and HUFs are the only ones that can invest in a tax-saving deposit scheme.
  2. A minimum deposit is required to open a tax-saving FD scheme, which varies from one bank to the next.
  3. Tax-saving fixed deposit schemes come with a lock-in period of 5 years with no premature withdrawal and loan against deposit facility.
  4. Apart from co-operative and rural banks, one can invest in these FDs across either public or private sector banks.
  5. A five-year deposit in a Post Office Time Deposit is also eligible for a deduction under section 80 (C) of the Income Tax Act of 1961.
  6. Along with the tax benefits a five-year post office time deposit scheme can be transferred from one post office to another and one individual to another.
  7. These FDs can be maintained in either a ‘Single’ or a ‘Joint’ type. The tax advantage is only applicable to the first holder if the form of ownership is joint.
  8. TDS is due because the interest received is taxable according to the investor’s slab rate. Deposit interest is paid either monthly or quarterly, or it may be reinvested. By submitting Form 15G (or Form 15H for senior citizens) to the bank, an individual can prevent TDS on interest received.
  9. Tax-saving deposits also come with a nomination facility.
  10. On tax-saving FDs senior citizens marginally get higher rates opposed to the general public.

TDS applicable on FD

TDS applicable on FD

TDS is a tax that is automatically deducted from your fixed deposit by the bank where you have an account. The bank only deducts TDS if your fixed deposit returns surpass Rs 40,000 (Rs 50,000 for senior citizens) per year. If your fixed deposit earnings surpass Rs 40,000 (or Rs 50,000 by elderly people) and you furnish the bank with your PAN, the bank may subtract 10% TDS from your interest income. If you do not submit your PAN to the bank, the bank will deduct 20% from your fixed deposit income as TDS. To prevent the inconvenience of additional TDS deduction and resulting refund from the Income Tax Department, Form 15G (for non-senior citizens) and 15H (for senior citizens) can preferably be submitted at the beginning of each fiscal year. Surprisingly, no TDS is withheld from fixed or recurring deposits made at the post office.

Tax Saving FD Rates

Tax Saving FD Rates

In the below table DCB Bank and Yes Bank are at the top of the list with 6.75 per cent interest, after IndusInd Bank with 6.50 per cent interest on five-year tax-saving FDs. On tax-saving FDs, small private banks bid interest rates as high as 6.75 per cent. These tax-saving FD rates are higher than those offered by major public sector banks. On tax-saving FDs, AU Small Finance Bank and Ujjivan Small Finance Bank bid 6.50 per cent and 5.55 per cent interest, respectively. In comparison to major private banks, small finance banks bid higher rates. Axis Bank, ICICI Bank, and HDFC Bank, for example, provide 5.50 per cent, 5.35 per cent, and 5.30 per cent interest on tax-saving FDs. Union Bank of India provides the highest interest rate on a 5-year tax-saving FD at 5.55 per cent, led by Canara Bank and State Bank of India (SBI) at 5.50 per cent and 5.40 per cent respectively.

Private Sector Banks ROI per annum for the general public ROI for senior citizens
DCB Bank 6.75% 7.25%
Yes Bank 6.75% 7.50%
IndusInd Bank 6.50% 7%
RBL Bank 6.25% 6.75%
City Union Bank 6% 6%
Public Sector Banks ROI per annum for the general public ROI for senior citizens
Union Bank 5.60% 6.10%
Canara Bank 5.50% 6.00%
SBI 5.40% 6.20%
Bank of India 5.30% 5.80%
Punjab National Bank 5.30% 5.80%

Note

Note

On her Union Budget 2020, finance Minister Nirmala Sitharaman raised deposit insurance cover from Rs. 1 lakh to Rs. 5 lakh for bank customers. The Reserve Bank of India’s Deposit Insurance and Credit Guarantee Corporation (DICGC) is a wholly-owned division. Customers’ deposits in a bank are covered by deposit insurance provided by DICGC. In a scheduled bank, whether commercial or small finance, you are covered for both principal and interest up to Rs 5 lakh respectively.



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Best Home Loans With The Cheapest Interest Rates Starting From 6.65%

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7 tips to avail the best home loan scheme

When it comes to purchasing your dream house, there are many obstacles to overcome. Choosing the best home loan scheme and lender seems to be the first and most difficult challenge. Since there are several banks and financial institutions willing to approve your loan application and give you the loan, you can preferably do extensive analysis and look for the right option that satisfies all the conditions and suits your funding. To assist you in your process, here are some main considerations to keep in mind when selecting the best home loan bid.

Tip 1: The interest rate is the most important aspect in determining your willingness to repay the loan and how easy it would be to do so?. A higher interest rate can prevent you from accepting a larger loan or require you to choose a longer repayment period. A low rate of interest, on the other hand, allows you to take out a higher loan and raises the likelihood of quick prepayment. Financial institutions and housing finance companies provide various interest rates, which fluctuate over time. The rate may be floating (i.e., it varies over time) or fixed (i.e., it stays the same over the loan term).

Tip 2: For determining the eligibility of borrowers for a home loan, banks or financial institutions have a set of standards. These criteria vary by lender, but it generally covers age, income stream, credit history, and so on.

Tip 3: It could be tough to receive a home loan if you have a poor credit score or a poor credit history. A decent credit score demonstrates to your lender that you are a responsible borrower who can reimburse the loan on time. Identifying your credit score allows you to take appropriate steps to boost it before applying for a home loan. A poor credit score will cause your home loan application to be rejected, even if it is approved, you may carry a higher interest rate.

Tip 4: The majority of banks and financial institutions have undisclosed fees that are not revealed to borrowers in advance. Before agreeing for a home loan, it’s a good idea to check into hidden charges and evaluate processing fees, prepayment fees and so on.

Tip 5: A home loan scheme has a number of important terms and conditions that can affect loan approval and repayment. As a result, carefully reading all the terms and conditions before choosing a lender is strongly advised.

Tip 6: Explore the lenders’ loan approval and disbursement period. Choose the loan with the fastest processing and disbursement periods. A bank or financial institution typically takes 10-15 working days to approve a home loan application, with another 3-5 days for the loan to be disbursed. This period, however, differs from one lender to the next.

Tip 7: When you’ve mapped a few lenders, go to their branch office to talk about your choices and ask for the best deal. Often, a bank in which you already have a relationship as a customer can be ready to offer you a better deal than what is currently available in the sector. As a result, it is recommended that some considerable effort be made ahead of time in order to ensure a smooth and hassle-free potential.

Tax benefit on home loan

Tax benefit on home loan

For principal repayments made within the financial year, you can deduct up to Rs 1.50 lakh under Section 80C. For the accrual and payment of interest on a home loan, you can deduct up to Rs 2 lakh under section 24B. You can deduct up to Rs 1.50 lakh in interest payments made on a home loan during the financial year under Section 80EEA. If you take out a home loan during the financial year 2016-17, you can claim an exemption of up to Rs 50,000 for interest payments. If your property is self-occupied, you can claim up to Rs 2 lakh. In the case of an under-development property, the overall cap of Rs 2 lakh is applicable only if the construction is completed within 5 years of the fiscal year in which the loan is taken out. The applicable deduction is restricted to Rs 30,000 if this is not the case. Under section 24(b), the tax gain available for interest on a home loan for a self-occupied property is limited to Rs 2 lakh, while for rented or considered to be lent out the property, the deduction is unrestricted. Additional deduction of Rs 1.50 lakh for interest on home loans taken out to buy affordable houses worth up to Rs 45 lakh until March 2020. The gain is valid until March 31, 2021.

The government has authorised many income tax exemptions in the Union Budget 2021. The former interest tax deduction for subsidised housing has been maintained for the next year. In addition, the Finance Ministry has approved a tax deduction for migrant workers who live in subsidised homes that have been approved by the government.

Note

Note

ICICI Bank cut home loan interest rates to 6.7 per cent on March 5-2021, the private sector lender announced on March 5. The bank’s adjusted interest rate is the lowest in ten years. This interest rate is available for home loans of up to Rs 75 lakh. Interest rates on loans above Rs 75 lakh are set at 6.75 per cent. These new rates will be valid until March 31, 2021, according to the bank. Last week, a slew of banks, including the country’s largest lender, State Bank of India (SBI), Kotak Mahindra Bank, and HDFC, lowered home loan rates. SBI and HDFC lowered their home loan rates to 6.7 per cent and 6.75 per cent, respectively, while Kotak Mahindra lowered the rate to 6.65 per cent. HDFC, a mortgage lender, announced on March 3 that it had lowered home loan rates for all retail customers by five basis points, starting on March 4. In a tweet, HDFC said it had cut its Retail Prime Lending Rate (RPLR), on which its Adjustable Rate Home Loans are based, by 5 basis points. SBI has lowered the interest rate on home loans to 6.70 per cent. Customers were also exempt from paying a processing fee. Kotak Mahindra Bank, a private sector bank, recently lowered its lending rates as well. Interest rates on SBI home loans start at 6.70 per cent for loans up to Rs 75 lakh and 6.75 per cent for loans above Rs 75 lakh, according to the bank. Banks have been urged by the Reserve Bank of India (RBI) to lower their lending rates. After February 2019, the central bank has lowered its primary lending rate, repo, by 250 basis points.

Cheapest Home Loan Rates

Cheapest Home Loan Rates

List of banks providing the cheapest floating-rate home loan rates:

Sr No. Banks ROI in % p.a.
1 Kotak Mahindra Bank 6.65
2 State Bank of India 6.70
3 HDFC Bank 6.70
4 ICICI Bank 6.70
5 Union Bank of India 6.80
6 Punjab National Bank 6.80
7 Central Bank 6.85
8 Bank of Baroda 6.85
9 UCO Bank 6.90
10 Punjab & Sind Bank 6.90
11 Bank of Maharashtra 6.90
12 Axis Bank 6.90
13 Canara Bank 6.90
14 IDBI Bank0 6.90
15 Bank of India 6.95
16 Indian Bank 7.00
17 Indian Overseas Bank 7.05
18 Jammu & Kashmir Bank 7.20
19 DBS Bank 7.30
20 Karur Vysya Bank 7.45



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ICICI Bank drops home loan rate to 6.7%

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or loans above Rs 75 lakh, ICICI Bank is charging a rate of 6.75% or more. Much like SBI, ICICI Bank too is offering the revised rates till March 31.

Amid a rate war in the home loan space, private sector lender ICICI Bank on Friday announced a reduction in interest rates to 6.7% for loans of up to Rs 75 lakh. This is the lowest rate in 10 years at the bank and matches that of State Bank of India (SBI) which, on Monday, lowered the rate for borrowers with high credit scores. For loans above Rs 75 lakh, ICICI Bank is charging a rate of 6.75% or more. Much like SBI, ICICI Bank too is offering the revised rates till March 31.

The fight for market share in the home loan segment isn’t surprising given tepid demand from industry for credit. While Kotak Mahindra Bank lowered its starting home loan rate to 6.65%, Housing Development Finance Corporation (HDFC) said it would charge rates starting at 6.75% for loans of any amount. Analysts believe the cut in rates is temporary and timed to attract customers while the benefit from the cuts in stamp duty are available. However, if demand from companies remains week in the quarters ahead, banks might be compelled to under-cut each other to grow market share, they point out.

SBI chairman Dinesh Khara recently observed the bank intends to grow the home loan portfolio aggressively, doubling it to Rs 10 lakh crore in the next five years.

As at most banks, home loan interest rates at ICICI Bank vary on the basis of various parameters such as bureau scores, profile of customers and customer segments, among others.

Ravi Narayanan, head- secured assets, ICICI Bank, said demand from consumers wanting to buy homes to live in had seen a resurgence over the last few months. “We believe that with our completely digitised home loan process, including instant sanction for customers of any bank, everybody will find it immensely convenient to avail a home loan with us,”Naryanan said. ICICI Bank’s mortgage portfolio crossed the Rs 2-lakh-crore-mark in November 2020 and disbursements increased in Q3FY21 over Q2FY21. It now sources nearly one-third of new home loans digitally.The growth in the mortgage portfolio was also aided by the bank’s expansion of its footprint across the country, including tier 2, 3 and 4 cities.

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Indian Bank to divest ASREC stake

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The bank holds a 38.26% stake in ASREC (India) and the decision to divest stake is part of monetisation of the bank’s non- core assets.

The board of directors of Chennai-based public sector lender Indian Bank on Friday accorded in-principle approval for the partial or full disinvestment of the bank’s stake in ASREC (India) Ltd.

The bank holds a 38.26% stake in ASREC (India) and the decision to divest stake is part of monetisation of the bank’s non- core assets.

Apart from Indian Bank, LIC of India, Bank of India, Union Bank of India and Deutsche Bank are the other shareholders in the company.

ASREC (India), a public limited company incorporated under the Companies Act 1956 has been granted certificate of registration by the Reserve Bank of India on October 11, 2004 to carry out activities under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.

The company acquires non-performing assets (NPAs) from banks and financial institutions at mutually agreed prices with the objective is to maximise the returns through innovative resolutions strategies.

ASREC positions itself as the multi-lender ARC in the public sector, aiming to earn the confidence of the financial system in the effective resolution of NPAs by operating in transparent manner with flexibility of the private sector.

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Post office Account Changes That You Should Know

Personal Finance

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Personal Finance

oi-Roshni Agarwal

|

The new post office account rule that comes into effect from April 1, 2021 surely needs your attention if you maintain one or other post office account. Now, as per the rules which shall be notified soon, deposit as well as withdrawal rules shall apply on the different post office accounts. And this amount shall vary as per the nature of the post office account held.

Post office Account Changes That You Should Know

Post office Account Changes That You Should Know

Basic savings account

So, for the basic savings account at India Post charges shall be as though:

For withdrawal of cash four times in a month, there shall be no charge. And thereafter every transaction will be charged Rs. 25 or 0.5% of the total amount withdrawn. No charges shall apply for making deposit.

India Post Saving account and current account charges

For savings and current account: No charges shall be levied on withdrawing Rs. 25000 monthly. And thereafter, every withdrawal shall attract a minimum of Rs. 25 or 0.5 percent of the total amount withdrawn.

If you make a cash deposit up to Rs 10,000 in a month, then there will be no charge. But a deposit of over that amount shall attract a minimum of Rs. 25 on every deposit.

India Post AePS account charge

On IPPB network, there are unlimited free transactions but for non-IPPB, the number of transactions allowed for free are capped at 3. The rule is for is for mini statement, cash withdrawal and depositing cash. After the free limit in AePS is over, a charge will have to be given on every transaction.

After the threshold is exhausted, any deposit shall be charged at Rs. 20.To get a mini statement, you have to pay Rs 5. If funds are transferred after the limit is over, then 1% of the transaction amount will be charged, which will be a minimum of Rs. 1 and a maximum of Rs. 20. GST and Cess will also be levied on these charges.

Withdrawal limit hiked from post office savings account

Also, another point to note is that to provide ease to the rural post office savings account holders, India Post has announced that it shall hike the withdrawal limit at Post Office GDS (Gramin Dak Seva) Branches. And now the limit has been hiked from Rs. 5000 to Rs. 20000 per customer. The move is aimed at increasing post office deposits over time.

For a savings account maintained at a post office, the minimum required amount that needs to be maintained is Rs. 500 and if the minimum criteria is not met, Rs. 100 shall be deducted as Account Maintenance Fee . Further if there is no balance, the account shall be automatically terminated.

GoodReturns.in



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Top Private Sector Banks Providing Good Returns Across 1 To 5 Year FDs

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1 Year FD Rates

Banks 1 year FD rates in % for non-senior citizens 1 year FD rates in % for senior citizens
DCB Bank 5.95 6.45
Yes Bank 5.75 6.25
TNSC Bank 5.75 5.75
RBL Bank 5.75 6.25
IndusInd Bank 5.75 6.25
Bandhan Bank 5.25 6
Tamilnad Mercantile Bank 5.25 5.25
Karnataka Bank 5.2 5.6
Axis Bank 5.15 5.4
Karur Vysya Bank 5 5
City Union Bank 5 5
South Indian Bank 4.75 5.25
Dhanlaxmi Bank 4.5 5
J & K Bank 4.5 5
Kotak Bank 4.4 4.4
ICICI Bank 4.4 4.9
HDFC Bank 4.4 4.9
Federal Bank 4.4 4.9

1 to 2 Year FD Rates

1 to 2 Year FD Rates

Banks 1-2 year FD rates in % for non-senior citizens 1-2 year FD rates in % for senior citizens
DCB Bank 6.5 7
RBL Bank 6.5 7
IndusInd Bank 6.5 7
Yes Bank 6.25 6.75
TNSC Bank 6 6.5
Tamilnad Mercantile Bank 5.75 6.25
City Union Bank 5.75 6.25
Bandhan Bank 5.75 6.5
Karur Vysya Bank 5.5 6
South Indian Bank 5.4 5.9
Dhanlaxmi Bank 5.3 5.8
Karnataka Bank 5.3 5.7
Axis Bank 5.25 5.9
J & K Bank 5.1 5.6
Federal Bank 5.1 5.6
ICICI Bank 5 5.5
Kotak Bank 5 5
HDFC Bank 4.9 5.4

2 to 3 Year FD Rates

2 to 3 Year FD Rates

Banks 2-3 year FD rates in % for non-senior citizens 2-3 year FD rates in % for senior citizens
Yes Bank 6.5 7
RBL Bank 6.5 7
DCB Bank 6.5 7
IndusInd Bank 6.5 7
TNSC Bank 5.85 6.35
Bandhan Bank 5.75 6.5
City Union Bank 5.75 6.25
Tamilnad Mercantile Bank 5.65 6.15
Karnataka Bank 5.55 6.95
Karur Vysya Bank 5.5 6
South Indian Bank 5.4 5.9
Axis Bank 5.4 5.9
Dhanlaxmi Bank 5.4 5.9
Federal Bank 5.35 5.85
J & K Bank 5.2 5.7
HDFC Bank 5.15 5.65
ICICI Bank 5.15 5.65
Kotak Bank 5 5

3 to 5 Year FD Rates

3 to 5 Year FD Rates

Banks 3-5 year FD rates in % for non-senior citizens 3-5 year FD rates in % for senior citizens
DCB Bank 6.75 7.25
RBL Bank 6.25 6.75
Yes Bank 6.75 7.5
IndusInd Bank 6.5 7
TNSC Bank 6 6
Karur Vysya Bank 5.75 6.15
South Indian Bank 5.65 6.15
Karnataka Bank 5.55 6.95
Axis Bank 5.5 6
Bandhan Bank 5.5 6.25
City Union Bank 5.5 6
Dhanlaxmi Bank 5.5 6
Federal Bank 5.5 6
Tamilnad Mercantile Bank 5.5 5.5
ICICI Bank 5.35 5.85
HDFC Bank 5.3 5.8
J & K Bank 5.3 5.8
Kotak Bank 5.3 5.3

Fixed Deposit Benefits For Senior Citizens

Fixed Deposit Benefits For Senior Citizens

Senior citizens, identified as those who are 60 years or older are eligible for a senior citizens’ fixed deposit account of a bank or NBFC. They must have proof of age, as well as other required documents, in order to apply for the same. Banks, and also Non-Banking Financial Companies (NBFCs), grant senior citizens additional FD rates ranging from 0.25 per cent to 1.00 per cent respectively. Senior citizens’ tenure on FDs usually ranges from 7 to 10 years. They can also claim 80C deductions for up to Rs. 1.5 lakh if they invest for a term of 5 years in a fixed deposit. When it comes to TDS banks and NBFCs subtract tax from accrued interest. TDS is levied as interest accrues, i.e. monthly, quarterly, half-yearly, or yearly in the case of cumulative interest payments. If earned interest crosses Rs. 50,000 for senior citizens, tax is deducted at a rate of 10%, compared to Rs. 40,000 for non-senior citizens.

Note

Note

In her Budget 2020 speech, Finance Minister Nirmala Sitharaman announced raising the insurance amount for depositors in the event of bank default. The RBI had announced a raise in insurance cover to Rs 5 lakh per depositor, up from Rs 1 lakh previously. The scheme covers all forms of bank deposits, including savings, fixed, and recurring. The Deposit Insurance and Credit Guarantee Corporation, a wholly-owned subsidiary of the Reserve Bank of India, offers a Rs 5 lakh cap under this scheme, which includes both principal and interest.



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Tax-Related Tasks to Finish Before March 31 2021 Deadline

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GST Returns

A GST return is a format in which a taxpayer who is enrolled under the Goods and Services Tax (GST) law must file a separate return for each registration. To keep taxes in line with respective approval, the government announces GST return filing due dates from time to time. The deadline for filing annual GST returns for the fiscal year 2019-20 has been extended until March 31 by the Centre. The Department of Revenue stated that the decision was made in light of the difficulties that taxpayers have expressed in meeting the deadline. With the approval of the Election Commission of India, the government has agreed to extend the deadline for filing GSTR-9 and GSTR-9C for the financial year 2019-20 to 31.03.2021.

Link Aadhar with PAN

Link Aadhar with PAN

The Income Tax Department has made it simple for taxpayers to connect their PAN cards with Aadhaar. From April 1, 2019, it is also required to cite and link the Aadhaar number when filing income tax returns. A person cannot file an ITR without linking his or her Aadhaar and PAN. If you do not connect your PAN with your Aadhaar, your PAN will become inactive on April 1, 2021. The government has previously extended the deadline for linking Aadhaar to PAN on many occasions. The deadline has been extended to March 31, 2021. The Income Tax Act of 1961 makes it mandatory to attach your PAN to your Aadhar card. The Income Tax Department can fine you up to Rs10,000 if you fail to link your PAN and Aadhaar.

Check different ways to link Aadhaar with your PAN.

Filing Advance Tax

Filing Advance Tax

Advance tax is income tax charged in advance rather than in a lump sum at the end of the year. The income tax department requires advance tax payments to be made in installments by the defined due dates. The government’s ability to manage expenditures is aided by the continuous collection of advanced revenue. Taxpayers must pay advance tax on dividend income only after the dividend has been declared or paid. Click to read how is Advance tax calculated?

For both individual and corporate taxpayers:

Due DateAdvance Tax Payable

On or before 15th June- 15% of advance tax

On or before 15th September- 45% of advance tax

On or before 15th December- 75% of advance tax

On or before 15th March- 100% of advance tax

Belated, Revised Tax Return

Belated, Revised Tax Return

Belated tax returns, as the name implies, are filed after the extended return filing deadline outlined in Section 139(4) of the Income Tax Act. Individuals file revised income tax reports if they find a mistake after filing their initial tax returns, such as the lack of interest income or a bank account. You will have one year from the end of the relevant Assessment Year to file your belated IT Returns (AY). But now it has been reduced by three months. This year it is March 31, 2021, but after this, we will have to file revised tax by December 31, 2021.

How To E-File Revised Income Tax Return?

If you have not filed returns for a specific year for more than two years, you will receive a notice from the IT department. If you receive one of these notices, make sure to begin reviewing and filing your tax returns as soon as possible.

Vivad se Vishwas

Vivad se Vishwas

The deadline to submit a declaration under the Vivad Se Vishwas scheme has been extended until March 31, 2021. The Direct Tax ‘Vivad se Vishwas’ Act, 2020 signed into law on March 17, 2020, with the aim of reducing pending income tax litigation, generating timely revenue for the government, and benefiting taxpayers. So far, 1,25,144 cases have applied for the Vivad se Vishwas (VsV) scheme, accounting for 24.5 percent of the 5,10,491 cases currently pending in various courts.

Property tax

The deadline for the One-Time Settlement (OTS) scheme for property tax arrears has been extended once again by the Hyderabad Municipal Administration and Urban Development (MAUD). The deadline for the scheme was extended by the department to March 31, 2021.

Tax Saving Investments

Tax Saving Investments

A person can claim a deduction of up to $150,000 under section 80C. Similarly, under section 80D, a taxpayer can claim a deduction for health insurance, and under section 80G, a taxpayer can claim a deduction for charitable contributions. You must send investment proofs to your employer for the Financial Year if you are a salaried employee.

Deposits in mutual funds, PPF, NSC, LIC premiums, SSY, NPS subscriptions, and health insurance contributions are among the savings that qualify for a tax deduction.

Submit Form 15G/15H

Submit Form 15G/15H

When your interest income exceeds Rs.40,000 in a year, banks are required to deduct TDS. However, if you apply Form 15G / Form 15H to your banker, no TDS will be deducted from your earnings. March 31 is the deadline for filing the quarterly statement of TDS/TCS deposited for Q1 and Q2 of FY 2020-21 has been extended.

Have you changed jobs? You must submit Form 12B.

If you changed jobs during the fiscal year, make sure you’ve sent Form 12B to your new employer.

Contributions

Some investment accounts, such as the PPF and the NPS, require a minimum annual commitment. This is a one-time payment that you can make at any time in the year. If you have not yet made the necessary minimum contribution to these accounts for this fiscal year, now is the time to do so.



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