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  • Early Diwali Bonanza For 11.72 Lakh Indian Railways Employees: Modi Govt Announces Productivity Linked Bonus – Details Here | Personal Finance News

    Weeks ahead of the festival of lights Diwali, the Narendra Modi government has announced bonuses for Indian Railways employees. The Union Cabinet today approved payment of a Productivity Linked Bonus (PLB) of 78 days for Rs 2028.57 crore to 11,72,240 railway employees in recognition of the excellent performance by the Railway staff.

    “The amount will be paid to various categories, of Railway staff like Track maintainers, Loco Pilots, Train Managers (Guards), Station Masters, Supervisors, Technicians, Technician Helpers, Pointsman, Ministerial staff and other Group XC staff. The payment of PLB acts as an incentive to motivate the railway employees for working towards improvement in the performance of the Railways,” said the government in a statement.

    Payment of PLB to eligible railway employees is made each year before the Durga Puja/ Dusshera holidays. This year also, PLB amount equivalent to 78 days’ wages is being paid to about 11.72 lakh non-gazetted Railway employees.

    The maximum amount payable per eligible railway employee is Rs 17,951 for 78 days. The above amount will be paid to various categories, of Railway staff like Track maintainers, Loco Pilots, Train Managers (Guards), Station Masters, Supervisors, Technicians, Technician Helpers, Pointsman, Ministerial staff and other Group ‘C staff.

    The performance of Railways in the year 2023-2024 was very good. Railways loaded a record cargo of 1588 Million Tonnes and carried nearly 6.7 Billion Passengers. “Many factors contributed to this record performance. These include improvement in infrastructure due to infusion of record Capex by the Government in Railways, efficiency in operations and better technology etc,” said the government.

  • How quick are you able to double your cash with PPF, MF, Bank FDs — Rule of 72 explains

    Every investor desires to develop into wealthy and amass enormous wealth within the shortest interval. In this text, we are going to inform you how a lot time it could take to double your cash. There’s a easy thumb rule for it referred to as the ‘Rule of 72’.

    Rule of 72

    The ‘Rule of 72’ provides you an estimate of the variety of years it should take to double your cash in a selected funding instrument. You must divide the speed of returns by 72 to know the time it could take you to double your investments.

    Time to double cash underneath Bank fastened deposits (FDs)

    Almost all banks present fastened deposits ranging between 7 days to 10 years tenure. The rates of interest range from one financial institution relying upon the tenure. SBI, ICICI Bank FDs between 7 days to 10 years will give 3% to 7.1%. HDFC Bank affords an rate of interest starting from 3% to 7.25.

    Suppose you need to make investments ₹1 lakh in a financial institution fastened deposit. So, if we assume, a financial institution FD providing an rate of interest of seven% p.a., it should take over 10 years to double your cash. The system is utilized as under:

    Rule of 72

    =72/7

    = 10.28 years

    So, an funding of ₹1 lakh in a financial institution FD will get doubled ( ₹2 lakh) in ten years assuming a 7% rate of interest.

    Time to double cash underneath PPF

    At current your Public Provident Fund (PPF) deposits fetch you 7.1 per cent. The rates of interest on PPF haven’t been revised since April 2020. PPF will take round 10 years to double your cash with 7.1%. The system is utilized as under:

    Rule of 72

    =72/7.1

    = 10.14 years

    Time to double cash underneath equities

    If we think about Nifty50, it has given a 13.5% return within the final 12 months, and 80% in 5 years. So, an funding of ₹1 lakh in equities will double ( ₹2 lakh) in 5 years assuming a 5.33% rate of interest. The system is utilized as under:

    Rule of 72

    =72/13.5

    = 5.33  years

    Time to double cash underneath Mutual Funds

    Money specialists say that if one stays invested in a disciplined method, in the long term, mutual funds can provide round 12-15% returns.So, an funding of ₹1 lakh in MFs will double ( ₹2 lakh) in six years assuming a 12% rate of interest.

    The system is utilized as under:

    Rule of 72

    =72/12

    = 6 years

    With this DIY system, buyers can very simply discover out the time their investments would take to double their cash. 

    Disclaimer: We advise buyers to verify with licensed specialists earlier than making any funding selections.

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    Updated: 23 Sep 2023, 02:58 PM IST

  • Mutual fund nomination deadline to finish on 31 March. Details right here

    If current mutual fund investor fail to appoint beneficiary by 31 March, their accounts might be frozen. The current mutual fund buyers have time until 31 March to appoint a beneficiary or decide out of it by submitting a declaration kind, failing which their folios might be frozen, and so they won’t be able to redeem funding.

    This comes after capital market regulator Securities and Exchange Board of India (Sebi), in its round on June 15, 2022, made it necessary for mutual fund subscribers to submit the nomination particulars or declaration to decide out of the nomination on or after August 1, 2022, following which the deadline was prolonged to 1 October 2022. 

    The deadline for all the present mutual fund folios, together with jointly-held ones, was then set as 31 March 2023, failing which the folios might be frozen for debits.

    Importance of including nominees

    Explaining the rationale behind the Sebi’s transfer, Anand Rathi Wealth Ltd COO Niranjan Babu Ramayanam instructed PTI that many funding accounts previously have been opened with out nominating anybody to whom the belongings needs to be transmitted in case one thing occurs to the account holders. 

    This implies that the rightful heirs had problem in getting the belongings transmitted to them because of the hassles of various sorts of documentation necessities.

    “Many rightful heirs don’t even know about such investments, which are supposed to be claimed by them. Huge investments are lying unclaimed in the investment accounts where the holders are deceased and none of their heirs has claimed for the same. This may lead to miscreants creating fake documents and withdrawing investments that have been lying unattended for a very long time,” he added.

    How so as to add nominee

    Mutual fund investor can add nominees through MFCentral. It is an investor providers hub conceived by CAMS and KFintech. If mutual fund items are bought by way of a demat account, the nomination for the demat account might be relevant for these items.

    Under the brand new framework, asset administration corporations (AMCs) should present an choice to the unit holders to submit both the nomination kind or the declaration kind for opting out of the nomination in bodily or on-line as per the selection of the unit holders.

    In the case of a bodily possibility, the varieties will carry the moist signature of all of the unit holders and within the case of the net possibility, the varieties might be utilizing an e-sign facility as a substitute of the moist signature of all of the unit holders.

    AMCs have to make sure that sufficient techniques are in place for offering the e-sign facility, and they should take all essential steps to keep up the confidentiality and security of shopper data.

    The transfer is geared toward bringing uniformity in practices throughout all constituents within the securities market.

    In 2021, Sebi had given an analogous option to buyers, who had been opening new buying and selling and demat accounts. At current, there are 42 mutual fund homes, which collectively handle belongings to the tune of round ₹40 lakh crore.

    (With inputs from PTI)

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  • Should senior residents put money into NPS after the revised guidelines?

    The Pension Fund Regulatory and Development Authority (PFRDA) just lately revised the entry and exit pointers to ease funding within the National Pension Scheme (NPS) for senior residents. As per the brand new guidelines, the entry age for NPS has been revised to 18-70 years from the sooner 18-65 years. This means you can be a part of NPS even in case you are 70 years of age. But how a lot will it allow you to as a senior citizen? Let us perceive.
    What is NPS?
    The National Pension Scheme or NPS is a long-term retirement funding plan, voluntary in nature, and offers a social safety cowl within the type of a month-to-month pension to employees put up their retirement. An particular person with a minimal age of 18 can open an NPS account and must proceed along with his contribution until retirement to avail of a month-to-month pension. Post-retirement, the account holder can withdraw 60 per cent of the corpus tax-free. However, the remaining 40 per cent is required to mandatorily buy an annuity from PFRDA-registered insurance coverage corporations to get a month-to-month pension post-retirement.
    What are the just lately revised pointers of NPS?
    Before the brand new guidelines, any Indian citizen (each resident and non-resident) within the age group of 18-65 years can be a part of NPS. The revised guidelines have elevated the entry age. Take a glance:
    Extension of Entry age: In its revised pointers, PFRDA has elevated the entry age as much as 70 years in opposition to 65 years earlier. Therefore, as per the revision, the present age of entry which is 18-65 years has been revised to 18-70 years. Those subscribers who’ve closed their NPS accounts are permitted to open new NPS accounts as per the elevated age eligibility norms.
    Equity Exposure capped at 50 per cent: NPS permits funds to put money into fairness belongings as properly, however with a cap. There are two choices given to subscribers (traders) — Auto Choice and Active Choice. Choosing Auto Choice by default restricts allocation to fairness at 15 per cent whereas in Active Choice, one can determine upon allocation relying on the cap – which is mostly 50 per cent to 75 per cent. It is capped at 50 per cent for presidency staff. The subscriber, becoming a member of NPS past the age of 65 years, can train the selection of pension fund (PF) and asset allocation with the utmost fairness publicity of 15 per cent and 50 per cent below Auto and Active Choice, respectively, in keeping with PFRDA. The PF may be modified annually whereas the asset allocation may be modified twice.
    Normal Exit: Further, the conventional exit for such subscribers will likely be after three years. However, because the rule suggests the account holder who joined NPS after 65 years of age will likely be required to utilise a minimum of 40 per cent of the corpus or buy of annuity whereas the remaining may be withdrawn as a lump sum. But, if the corpus is Rs 5 lakh or much less, the account holder could choose to withdraw your entire accrued pension wealth.
    Premature Exit: In case of untimely exit that’s earlier than 3 years, the subscriber must utilise a minimum of 80 per cent of the corpus for buy of annuity and the stability quantity may be withdrawn in a lump sum. However, if the corpus is Rs 2.5 lakh or much less, the account holder will likely be eligible to withdraw your entire accrued pension wealth.
    In the occasion of the account holder’s demise, your entire corpus will likely be paid to the nominee as a lump sum.
    What is an annuity in NPS?
    Buying an annuity is necessary post-retirement through the use of 40 per cent of the corpus on the time of retirement for receiving a month-to-month pension. Simply put, an annuity is an insurance coverage contract that provides a set earnings stream for an individual’s lifetime. Under the NPS, a sure sum is required to purchase the annuity plan for a pension from PFRDA-registered insurance coverage corporations. Annuities work by changing a lump sum quantity into a set stream of earnings.
    Should senior residents put money into NPS after the revised pointers?
    Revisions made in NPS pointers have been made to make this pension funding instrument extra interesting to the present subscribers and senior residents who’ve attained superannuation. This additionally permits them to put money into equities for an extended time and earn higher returns than conventional devices resembling fastened deposits.
    That being stated, senior residents ought to put money into devices that present them assured returns and simple liquidity. NPS comes with a lock-in throughout, and after the funding interval as properly when it’s a must to make investments mandatorily in annuities. So for senior residents liquidity could also be a difficulty due to the lock-in phrases.
    Secondly, the returns on NPS should not assured in contrast to many different devices meant for senior residents resembling SCSS or PMVVY that supply assured returns.
    Thirdly, investing in NPS by senior residents will not be as helpful in comparison with a younger investor whose cash can have an extended length of funding to get higher returns on. Considering the age of a senior citizen, they are going to have little or no time to stay invested to get greater returns. On the opposite, their returns could also be harmed by market volatility throughout a brief funding tenure. Also, the obligatory annuity buy clause takes away senior citizen’s maintain on their complete corpus, which will not be the case with different devices.
    Finally
    On the tax-saving entrance, funding in NPS is very efficient as contributions made by account holders are eligible for tax advantages below Section 80C and Section 80CCD of the I-T Act. You can declare a deduction of as much as Rs 1.5 lakh on your contribution in addition to for the contribution of the employer below Section 80C. Additionally, you may declare a deduction for a self-contribution of as much as Rs 50,000 below Section 80CCD of the I-T Act. Therefore, investing in NPS may also help you declare a tax deduction of as much as Rs 2 lakh in complete.
    But for senior residents, tax-saving has restricted advantages and shouldn’t be the primary criterion for funding until they consider they’ve a protracted working life forward of them, which might enable them to stay invested and earn higher market-linked returns.
    The greatest thought can be to diversify your investments to minimise dangers and safe an optimum and regular return out of your investments.
    The creator is the CEO at BankBazaar.com. Views expressed are that of the creator.

  • Key issues to recollect throughout revenue tax planning for FY 2021-22

    Income tax planning for FY 2021-22: First quarter of FY 2021-22 is gone and if you have not finished your revenue tax planning,, then it is not too late as there’s nonetheless eight and half month left to do this. According to tax and funding specialists, revenue tax planning for salaried staff is a vital monetary occasion and one should take it significantly as a penny saved is penny earned. Experts went on so as to add that whereas doing revenue tax planning, one must first exhaust its ₹1.5 lakh annual restrict below Section 80C after which an extra ₹50,000 allowed below Section 80 CCD (1B) on one’s funding in National Pension System or NPS scheme. However, this isn’t sufficient as there are numerous different elements like mediclaim advantages, tax effectivity of 1’s funding, and so on. that additionally wants particular consideration by the taxpayer.

    Speaking on revenue tax planning for salaried staff Balwant Jain, a Mumbai-based tax and funding skilled mentioned, “The taxpayer should first try to exhaust its Section 80C limit of ₹1.5 lakh per annum. After this, he or she should move towards Section 80 CCD (1B) where an additional ₹50,000 annual benefit is given under NPS scheme investments.” Jain mentioned that Section 80C consists of choices like PF deductions, life insurance coverage premium, faculty charge for kids, and so on.

    On what subsequent on revenue tax planning after exhausting Section 80C and Section 80CCD(1B) limits Kartik Jhaveri, Director — Wealth Management at Transcend Consultants mentioned, “Once, Section 80C and Section 80 CCD(1B) limit is exhausted, the income taxpayer needs to look at Section 80D and Section 80G of the income tax act. In Section 80D of the income tax act, an earning individual is given income tax exemption on mediclaim of ₹25,000 for himself and an additional ₹25,000 for its dependent parents. In case, the dependent parents are senior citizen, the mediclaim up to ₹50,000 for parents paid by the earning individual is income tax exempted. If an earning individual has done charity or donation, then 50 per cent of the donation is income tax exempted under Section 80G provided the receiver has Section 80G certificate issued by the Government of India.”

    Advising taxpayers to have a look at the tax effectivity of 1’s funding throughout revenue tax planning; SEBI registered tax and funding skilled Jitendra Solanki mentioned, “One needs to look at the tax efficiency of one’s investment like FD (fixed deposit). If it’s yielding more than ₹10,000 in one financial year, then one can move some FD amount to debt mutual funds (MFs) with 2-3 years time horizon where short-term debt MFs may yield to the tune of 6.0 to 6.5 per cent per annum and the income will get added to one’s net annual income as LTCG on debt mutual funds becomes applicable only when the investment period is 3 years or more.”

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  • Investment instruments for senior residents that may fetch higher returns than financial institution FD

    For a senior citizen, an funding instrument that has minimal threat or zero threat is the best option to park cash. That’s why financial institution mounted deposit (FD) is essentially the most favoured funding software among the many sixty plus inhabitants. However, the way in which financial institution FD rate of interest has been nosediving; senior residents are unable to beat the inflation development charge by investing in financial institution FD nowadays. So, for them central government-backed Senior Citizen Saving Scheme (SCSS), which is 100 per cent risk-free, is advisable. Senior Citizen Saving Scheme rate of interest is 7.4 per cent, which is way greater than the common inflation charge of 5.5 per cent to six per cent. However, if we go by the tax and funding specialists’ view, financial institution bonds can be a greater possibility for senior residents who’re on the lookout for choices aside from financial institution FD.

    Highlighting the options of Senior Citizen Saving Scheme or SCSS Kartik Jhaveri, Director — Wealth Management at Transcend Consultants mentioned, “Senior Citizen Saving Scheme or SCSS is fully debt instrument and it is 100 per cent risk-free. As per the latest announcement by the central government, the small saving scheme is currently giving 7.4 per cent annual return to the senior citizens investing in this scheme.”

    However, Jhaveri suggested senior residents to have a look at financial institution bonds because it provides round 9 per cent annual return to the investor. He mentioned that like SCSS, financial institution bonds are additionally 100 per cent risk-free as Government of India (GoI) is the guarantor of the cash obtained by varied banks from the buyers.

    On why not authorities bonds, why financial institution bonds Jhaveri mentioned, “Unlike government bonds, bank bonds are always available for investing but to buy bank bond, one needs Demat Account.”

    On why not authorities bonds, why financial institution bonds Jhaveri mentioned, “Unlike government bonds, bank bonds are always available for investing but to buy bank bond, one needs Demat Account.”

    Speaking on SCSS vs financial institution bonds; SEBI registered tax and funding knowledgeable Jitendra Solanki mentioned, “For opening a SCSS account one has to be at least 55 years of age while in the case of bank bond, there is no such age limit. Anybody can buy bank bonds at any age provided they have a Demat Account.” Solanki additionally mentioned that in SCSS, one cannot make investments above ₹15 lakh whereas in financial institution bonds; one can make investments any quantity out there for investing.

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  • Seven practical cash tricks to cowl misplaced floor within the new monetary 12 months

    Here comes the brand new monetary 12 months, however how do you make it a greater one in comparison with the earlier 12 months? You can achieve this in the event you make a sensible monetary plan for the 12 months and execute it with out making any careless errors. FY 2020-21 was some of the difficult years ever because of the Covid 19 pandemic that not simply endangered tens of millions of lives internationally but in addition led to widespread job losses and revenue reductions. And regardless of the nation presently dealing with a second wave of the coronavirus disaster that has as soon as once more heightened the uncertainties, the accelerated vaccinations, though nonetheless of their preliminary phases, has put us in a barely higher place than final 12 months. The level being, you may nonetheless cowl some misplaced floor owing to the setbacks of 2020 and rebuild your monetary energy this 12 months in the event you make the proper strikes. I’ve instructed just a few ideas which may aid you to take action.
    1. Set clear financial savings objectives and reset your price range
    You could not wish to miss the saving objectives within the new monetary 12 months. Many missed their saving targets in FY2020 as a result of they confronted a liquidity crunch because of the Covid-19 disaster. If your funds have began stabilising now, you will need to not let go of the chance to bounce again shortly. The very first thing you’ll want to do could be to prioritise your essential monetary objectives and set a sensible financial savings goal for this 12 months. If you wish to overcome the financial savings shortfall that occurred within the earlier monetary 12 months, it’s possible you’ll enhance your financial savings by resetting your price range and lowering spending on non-essential bills if required. Also, save at the start of the month after which spend the remaining funds on important and discretionary bills – not save no matter is left after your bills.
    2. Ensure your emergency fund ought to have the ability to cowl your debt obligations too
    The earlier 12 months had critical monetary implications for many people because of the job losses and pay cuts; nevertheless, the going was simpler for many who had enough contingency financial savings to fall again on when their revenue channels obtained impacted. As such, in case your funds have normalised this 12 months, you will need to prioritise replenishing your emergency financial savings shortly, or take steps to construct one in every of enough measurement on the earliest in the event you nonetheless don’t have one. Now, a few of you may need additionally opted for a moratorium on debt repayments final 12 months, or have been pressured to take a brand new mortgage. Measures like moratoriums may give us short-term reduction, however in addition they result in curiosity accumulation that might enhance the general debt burden or prolong the compensation tenure. To deal with the monetary dangers within the new 12 months, you will need to be sure that your emergency fund would have the ability to accommodate not simply your important bills but in addition your debt obligations for no less than six months and not using a common supply of revenue. This would additionally imply you may keep on monitor together with your debt obligations and keep away from snowballing of curiosity even in the event you lose your revenue for just a few months. You can construct a much bigger emergency fund by exercising monetary self-discipline and minimising pointless bills.
    3. Don’t compromise on insurance coverage
    The earlier 12 months gave all of us a slightly grim reminder in regards to the absolute significance of getting adequately insured. So, in the event you nonetheless suppose shopping for insurance coverage is a waste of cash or simply one other approach to save taxes, you can’t be farther from the reality. The reality is, a life insurance coverage cowl will shield the monetary pursuits of your dependents by caring for their bills and any carried-over debt if one thing untoward occurs to you. And a complete medical insurance plan will shield your loved ones’s funds from getting drained in footing steep medical payments if a member of the family requires hospital remedy. If you haven’t obtained your self insured but, contemplate going for a time period life plan this monetary 12 months with a canopy measurement of no less than ten instances your present annual revenue, and a medical insurance coverage plan price no less than Rs. 5 lakh. Remember, premiums for each will likely be cheaper in the event you begin the coverage at a younger age, so you haven’t any time to lose.
    4. Financial objectives ought to take priority over tax-saving objectives
    Tax-saving objectives are necessary, however solely when they’re in full alignment together with your monetary objectives. So, this 12 months, make sure you plan your taxes early, work out the deficit in maximising tax-deduction advantages, and spend money on tax-savers solely when doing so is strictly in step with your monetary objectives, threat urge for food and liquidity necessities.
    5. Focus on the true charge of returns as an alternative of nominal returns whereas investing
    Don’t get lured by nominal returns if you make investments cash. You ought to as an alternative have a look at the true charge of return, which is calculated after adjusting the inflation charge from the nominal return. For instance, suppose the curiosity in your FD is 5.5% p.a., and the prevailing inflation charge is 5%. It means your actual charge of return would solely be 0.5%! A damaging actual charge of return would suggest wealth erosion, whereas a constructive charge would present wealth creation in the long run. Higher the true charge of return, larger could be the creation of wealth and vice-versa. So, within the new monetary 12 months, you must choose funding devices which have the potential to generate the next actual charge of return.
    6. Focus on optimum diversification of investments
    The markets are anticipated to stay extremely risky till the Covid-19 disaster utterly subsides. So, to garner larger returns out of your market investments in FY2021, you’ll need to take the required steps to blunt the dangers. You can achieve this by optimally diversifying your funding portfolio throughout totally different merchandise and asset courses in step with your returns expectations. For instance, it’s possible you’ll wish to spend money on a mixture of asset courses like equities, debt, gold, realty, and so forth. to garner larger total returns whereas preserving the dangers underneath management as an alternative of investing all of it in a single asset class. The key’s to strike the proper funding stability. You can seek the advice of an authorized funding planner in the event you want assist in doing so.
    7. Invest frequently
    Despite the uncertainties out there, it will not be the proper concept to attend for the scenario to get higher or to strive timing the market. You ought to as an alternative deal with investing frequently. Many stopped their systematic funding plans (SIP) in panic final 12 months on account of Covid-19 uncertainties; later, the fairness and debt markets bounced again to make new highs, they usually misplaced the chance to earn a good-looking return on funding. So, investing frequently is the important thing, and to decrease the danger, it’s possible you’ll go for staggered investing methods like mutual fund SIPs as an alternative of creating a lump sum funding.
    In conclusion, you will need to put to good use in FY2021 the onerous classes you may need learnt final 12 months. A practical outlook, a farsighted method and a extremely disciplined execution of your plans will aid you make progress this 12 months. Here’s wishing you all the easiest!

    The creator is CEO at BankBazaar.com. Views expressed are that of the creator.