Articles by Bankingontips The Bankingontips Blog


Tax PlanningFY 2018-19

Expenses that you must know before Tax Planning for FY 18-19

Tue Dec 11 2018 / By: Nupur Sharma

Have you been tax planning lately? Keep these critical expenses in mind first.

It goes without saying how important tax planning is. It is only wise to find out good tax saving options for yourself as no one likes hurting their own pockets. We are here to tell you that tax planning isn’t that tough. In order to save better you need to find the right places where you can invest. This means that you need to look for the right investment schemes for yourself.

To reduce tax benefit, the govt has introduced some ways to do that. There are anomer of rebates, deductions and exemptions that they have provided under Income Tax Act. It is important for you to know about these to help you plan efficiently and lessen the load of tax. Two ways in which you can save tax are:

  1. Through investment
  2. Disclosing your expenses

Before the process to tax planning starts, you must get aware of certain expenses that are exempted from tax. Identifying these expenses helps you to know how much you should invest. Here is a list that will help you:

Housing Loan (Principal and Interest Payment): Section 24, 80C and 80EE:

Under section 24 and 80 C of Income Tax, there is tax deduction on the interest (Rs. 2 lakhs) and principal (Rs. 1.5 lakhs) of a home loan. If the tax payer sells his house, the tax benefit is reversed. (Section 80C)

Medical Insurance: Section 80D:Under section 80D of the Income Tax Act, a premium payment on Health Insurance policy (uptoRs. 15,000 for individual, age less than 60 years) is exempted from tax. Paying for parents also in health insurance will save another Rs. 15,000. (in cases where age of parents is more than 65, the deduction will be Rs. 20,000 instead.) A preventive health check-up (forself, spouse, children and parents) can have deductions around Rs. 5,000.


Education Loan: Section 80E

If you’re planning to take an Education loan, you tax exemption for the whole interest. (Section 80 E). The only thing to remember is that this exemption

Treatment of Disabilities: Section 80DD and 80DDB

Spending on medical care expenses will give you an exemption ( for treatment of specific disabilities, According to Section 80 DD). Rs. 50,000 has been fixed as the limit for deduction + 1 Lakh for severe disability.

Donations: Section 80G

Under 80G of Income Tax Act- donations made out to approved charitable institutions/organisations/trusts are eligible for deduction. Most donations are completely exempted from tax while others are 50%. The max limit is usually fixed at 10% of gross annual income.

Children Tuition Fees: Section 80C

On the off chance that you are paying any educational cost expenses for your youngster's instruction in any school, college, school or some other instructive foundation inside India, you can get an assessment exclusion under Section 80C. This can be up to Rs. 1 lakh in a year. A couple has a different limit of two kids. So each parent can guarantee for two kids each. This is eligible for full-time courses and not for private educational costs or training classes. The exception is Rs. 100 every month for each kid as instruction stipend and Rs. 300 every month for each youngster for lodging use costs.

Life Insurance Premium: Section 80C: This is a good option if you want to take care of your family incise you are not there plus it also saves tax. Exemption uptoRs. 1,50,000 under Section 80 C of Income Tax Act.

If you have covered all these expenses, then your tax planning job is almost done!

Credit Cards

Credit CardBill PaymentNet Banking

Paying credit card bills through net banking

Fri Nov 23 2018 / By: Jigi Yadav

It is a celebrated fact that paying your credit card bills timely is not only a good habit but it also helps you financially in future, by throwing a positive impact on your credit score. And a good credit score makes you a reliable individual to lend loans. On the other hand, late payments, lesser payments or minimum payments can also hamper your credit scores.

After a massive digitalization, people are mostly comfortable to pay their credit card bills through net banking or phone banking. Not because it saves time or is comfortable but because it secured and cost effective. Let us now know about the benefits of paying credit card bills through net banking.

- Net banking payments are out of any transaction fees or payment processing fees etc. You would have to pay these extra charges if you pay it through other modes like ATM etc.

- This method of paying your credit card bill is more secured and safe due to the encrypted security in the technology used to pay it online. The more people have started using this medium, the safer it has become to pay bills with net banking.

- It is hassle-free and easy to login and pay through net banking. It is just a matter of few seconds; therefore, it is time saving as well.

Net banking process varies from bank to bank though; the major method is almost same. Have a look at this process:

- Log on to the website of your credit card provider

- Select ‘Pay your Credit Card bill’ option

- Enter your credit card number, email id and the amount you need to pay (either minimum or full outstanding)

- On the payment modes page, select Net Banking and fill in the bank details/bank account details to pay

- After that, you will be redirected to the bank’s login page

- If the website of your preferred bank is beginning with ‘https://.’ It is considered as secure

- Enter you username and password on the login page

- Accept the payment details like the amount etc. and confirm it by entering the OTP sent to your registered mobile number

- On the successful transaction, you will be shown an e-receipt which is to kept safe for future requirement

This way, your credit card payment is done in a fraction of seconds. Yes, you should have a good internet connection for using net banking for making any payments.

Credit Cards

Credit CardRewards

Credit Card Rewards: Myths and Reality

Thu Nov 22 2018 / By: Jigi Yadav

When you apply for a credit card and it gets approved, that is surely a thing of joy in today’s time. But only getting a credit card doesn’t matter much, getting the best one according to your needs is important. So, what makes a credit card worth relying? Reward points, isn’t it? Every time you swipe your credit card, you get certain reward points which pay you back in one attractive deal or the other.

A lot of people consider the reward points a useless element in a credit card and that whatever additional features like extra miles or points cannot make any difference. Each reward point looks tiny at once but if you keep on paying the outstanding and all the bills on time, these reward points pile up to really reward you big, once you save a lot of them, and it is no myth.

May be, your credit card offering executive has promised you about the easiness of redeeming the reward points. But truly, it is not that easy. It is rather about how intelligently you redeem them. Be careful about the time and dates of your travel before you redeem your air miles. And if you redeem according to their conditions only, it can land you in so many layovers and abrupt timings of flights.

In case you dream about your next travel for free, just because you have sufficient air miles to sponsor that; you are mistaken. Chances are you may only get the flight tickets for those air miles, but other charges like the accommodation and the surcharge etc. are not included in it.

All your myths related to credit card rewards can be true or untrue but it wholly depends upon the kind of credit card you choose. You must check what features are going to benefit you and what kind of rewards suit to your requirements. Therefore, don’t just have a credit card for only the sake of it, but treat it has a very important financial asset which helps you at the time you most need it.

Personal Loan

Personal LoansSave Tax

Tax benefitting personal loans? Yes, for real!

Wed Nov 21 2018 / By: Jigi Yadav

You must be astonished to see the title that personal loans give you tax benefits. But, this is true. If you utilize the personal loan funds in some specific purposes, chances are you get tax exemption. Now, let us know about those utilizations you can make out of your personal loan money.

Personal Loan as home loan repayment: You might be knowing that home loans are eligible for tax benefits under Section 80C and Section 24. The former lets you claim your repaid principal up to Rs. 1.5 lakhs and the latter offers a tax deduction for repaid interest up to Rs. 2 lakhs respectively. It is also a myth that only a home loan applies to tax benefits. You can also apply for the same when you buy a house with the amount you get as personal loan. You are eligible for tax exemptions just as the case with home loan. Keep in mind that you need every proof regarding the amount used to buy a house to get tax benefits. Even if you are using money gifted to you by your friends and family to buy a house, keep all the proofs handy.

On the other hand, if you have not still constructed your house and already taken the personal loan for the same, you shall only be eligible to claim tax benefits only after the completion of your house.

Personal loan for house renovation:

Same tax benefits are offered if your house is under renovation, repairs and improvements. For example, you are building a balcony, an extra room, painting and denting, extending another floor to your house, improved flooring, tiling etc are included in home improvement loan which you can apply for. Even the alarm system and plumbing tasks are covered in some cases. For this, you will be given benefits under Section 24 and not Section 80C. You can claim benefits up to Rs. 30,000 for the renovation tasks of self-possessed house/property. For rented out property, this limit is up to Rs. 2 lakhs annually.

Personal loan for businesses:

If you own and run a business, took personal loan for the development of it; claim the interest amount as an expense to get tax benefit. The business profits will be deducted and this way, your taxes will get reduced. In case you want to use Personal Loan amount in buying assets like shares and equities, it will be further added to the acquisition cost and lessen the tax burden.

Therefore, you now know that personal loan can be indirectly used to avail tax benefits by putting it into specified purposes, you must use it wisely to claim the tax benefits. One thing is to be kept in mind that personal loan attracts higher interest rate along with lengthy terms and conditions which you must consider with multiple loan lenders before applying for one. 

Personal Loan

Personal LoanCredit Score

6 important reasons why your personal loan is getting rejected

Wed Nov 21 2018 / By: Jigi Yadav

Are you worried that your personal loan application is getting rejected and you are in a dire need of money? There may be certain reasons for this rejection. But, no worries, you can still get you personal loan application accepted with the needed loan amount approved.

You know, it is clearly logical to understand that whoever lends their money do a very cautious homework prior to letting their money into somebody’s hands without any guarantee. As these are unsecured loans and no collateral furnishing or security is involved, the lenders check the credit history of the applicant before the loan approval.

Now let’s take look at the most common reasons of the disapproval of personal loan request.

1. Not so good credit history:

If you are some of those people who have a habit of not paying their credit card bills and loan EMIs late and you often miss few payments as well; then you definitely have a poor credit history and a worse credit handling behavior. All these things negatively impact your credit score and create adversely negative effect upon further loan approval chances. This is a common reason for the rejection of your personal loan application.

Well, you still can postpone your application till you make positive attempts to restructure your lost credit score. Always pay your outstanding on time to heal your lost credit history.

2. Income not at-par:

Apart from the credit score, the minimum eligible salary is also looked upon and analyzed before the loan approval. If your salary is not at par with the conditions of the lender, your loan might get rejected.

3. Many loans:

Think twice before applying to a personal loan if you are already submerged in so many loans taken earlier. Whether you are repaying them timely or not, they will still check your income if it qualifies to repay an additional loan or so.

4. Errors in loan application:

Check the information you have entered in the loan application twice and carefully. If you have mistakenly filled up some wrong detail, you might end up rejecting your own loan application. Also, you must check the credit report as well for duplicate entries, wrong basic details etc. as they may also add up in the rejection of the application.

5. Continuous loan rejections:

If you are continuously applying for a loan, be it personal or other and it is getting rejected all the time, be cautious not to apply again for a while, may be, for some months. Applying for loan is also counted in CIBIL history and the rejected request is also reported to them. Therefore, doing that mistake again will not be of any help. It only shows your anxiousness for money and this desperateness will affect your credit history.

As you know now that the above few reasons are the clearly predicted ones for the rejection of your loan application. So, you must avoid them if you are going to need that personal loan amount direly, in a while. Be careful of your financial moves as they pay you in the future.

Personal Loan

Personal LoanPensioner

Are you a pensioner looking for personal loan, this is a must read!

Wed Nov 21 2018 / By: Jigi Yadav

It is widely known that every kind of loan lender checks the possibility of timely repayment of the loan amount along with the interest. And so, they usually approve the loan application of people who are salaried or have a regular income source. If you have your pension as income, you can also be eligible to get personal loan. Below are some of the banks who provide personal loans for pensioners.

1. SBI Pension Loan: SBI offers personal loans for retired government employees of centre or state. You must be 76 years old and should be getting your pension from any of the branches of State Bank of India. No processing fees shall be charged if you are a retired defence personnel and a minimal fee is charged on other pensioners. You can take a minimum loan of up to Rs. 25000. The maximum amount depends upon the age of the applicant. For those who are up to 72 years of age can get Rs. 14 lakh, those who fall up to 74 years of age can avail Rs. 12 lakh and people who are between 74-76 years of age can get a maximum of Rs. 7.5 lakhs. Your 18 months’ pension amount will act as the ceiling for this loan. Your spouse would be the guarantor of this personal loan and in his/her absence, any other family member will act as same. SBI offers 3.35% interest rate above 2 year MCLR. As of now, the interest charged by SBI on such loans is 11.6% annually.

 2. Central Bank of India Personal Loan for Pensioners: CBI offers personal loans for pensioners who need an urgent aid of money for whatsoever immediate financial need comes across at any point of time. All individuals getting pension or family pension can be eligible for this personal loan.

For this, one must be drawing his/her pension from any branch of Central Bank of India. If you are getting your pension directly credited by the defence pension distributing office, you may also apply for the same. CBI charges Rs. 500 as the processing fees along with the taxes. The disbursal of maximum loan amount is as respectively. The people in the age group of 75, above 75 can get personal loan from Rs. 5 lakh – 18 months pension amount and Rs. 2 lakh – 12 months pension amount. The loan repayment is to be done in 48 EMIs to the lender bank. Central Bank of India has not fixed any margins for the pensioner applicants. The bank offers 3% interest above 12 months MCLR. As on date, CBI charges 11.3% interest per annum on the loan amount approved and given.

3. Bank of India Pensioner Personal Loan Scheme: Every individual pensioner of those getting family pension can apply for BOI’s pensioner loan scheme. As all other banks, BOI conditions that the applicant/pensioner should be getting his/her pension from any of the Bank of India’s branch. Those defence pensioners getting their pension directly credited by the defence pension distributing office are also eligible for this scheme.

BOI charges no processing fees from senior citizens and other may be charged at 2% of the total loan amount. The minimum fees charged can be Rs. 500 and maximum charged fees can be Rs. 2000. Apart from processing fees, stamp duty and loan agreement charges may apply on the pensioner. If you are 75 years of age, you are eligible for a loan amount of Rs. 5 lakhs or 15 months’ pension. In case you are above 75 years of age, you may get up to Rs. 1 lakh as maximum personal loan approved. This is important to repay the loan amount in 36 EMIs if the loan nature is unsecured. If you have taken a secured loan, you have to repay it in 60 EMIs.

Bank of India has set up no margin for its BOI Star Pensioner Loan and there is no guarantor required for the same. BOI offers 2.5% interest rate above 1 year MCLR and as of now, the bank is charging 10.8% interest per annum.

Despite of meeting all these conditions of all these banks, your credit score and history may be checked and your personal loan’s approval and disapproval depends largely on that. Keep in mind that your pension account can be debited after you apply for this pensioner personal loan. Therefore, keep sufficient balance into the account so that your loan process can smoothly pass in.