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4 things to Know about Secured and Unsecured Loans

4 things to Know about Secured and Unsecured Loans

You wake up one fine morning and learn that a sudden monetary exigency needs your attention. You are running short of liquid cash and can’t wait for the salary. Securing loan from bank would be a tedious process. Don’t worry! Unsecured loan would come to your instant rescue. No collateral, no lengthy documentation. Easy and short-term loans are readily available online from EarlySalary that have been instituted just to cater to your sudden monetary needs. The unsecured loan can prove to be your true savior by taking away the hassles associated with the secured loan.

Four essentials to decide the one which complements your needs

Secured and unsecured both have the sense of security innate to their etymologies. When you apply for online loans from non-banking financial companies, you essentially have to prove your repayment capability to be entitled to the same. Traditionally, you had to keep a security deposit as collateral to see your way through the loan. However, with the advent of Fintech era, need for such indemnities have been done away with by firms like EarlySalary. Four salient features that differentiate unsecured loans from secured ones have been focused upon to help you take a conscious and informed decision

1. Need for collateral

Secured loans require you to deposit a token of repayment assurance to the lender for availing the same. Unsecured loans are disbursed without any collateral provided you are a salaried professional. Your creditworthiness would be evaluated for deciding your loan eligibility.

2. Processing speed

Secured loans involve lengthy processing time due to the extensive documentation involved. Short term loans are usually not available. With the unsecured option, you can even avail of online loans for the shorter duration without any background checks. No credit check loans at affordable interests can be availed for various short-term needs like relocation, marriage, house renovation etc.

3. Risk of losing the collateral pledged

In case of secured loans, you may have to forgo your claim on the valuable mortgaged with the lender if you fail to comply with the terms of repayment. Low-interest rates may seem appealing for the longer duration, but the potential of losing your collateral is high. In case of unsecured loans, you can enjoy complete peace of mind as you stand to lose nothing valuable. Interest rates may be slightly high but the flexibility offered in repayment is unparalleled.

4. Variation in loan amount payable

In case of secured loans with the variable interest rate, you are subjected to the volatility of the economy and may have to end up paying more as loan EMIs. The possibility of interest rate going up, in the long run, is high. With unsecured loans, you are not required to pay even a buck more as the loan repayment installment and tenure remain fixed.

Summary of key differences between secured and unsecured loans

Secured Loans Unsecured Loans
1. Fluctuating loan repayment EMIs Fixed installments
2. Available for medium to long-term Can be availed of for exceptionally short period
3. Lower interest rates Slightly higher interest rates
4. Collateral is a must No need to pledge any valuable
5. Extended processing period Easy loans with negligible processing time
6. Offered by banks and other institutions Online loans from non-banking financial companies available
7. Creditworthiness merely won’t do Sound credit report for salaried professional would entitle one for the loan
8. Larger value of loan has to be availed of Small loans can be easily secured

Why Unsecured Loans and Earlysalary?

EarlySalary has been instrumental in changing the dynamics of unsecured loans with its readiness to help out professionals like you with easy and swift monetary assistance. Small loans with no collateral are now available within your reach even if your creditworthiness does not measure up to market stipulations.

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Bank or Non Banking Financial Company: Which is Better for Loans?

Bank or Non-Banking Financial Company: Which is Better for Loans?

A Bank is the first thing that pops into your mind when searching for a loan. That’s how we have been wired and it seems like a logical choice to go with. But you would be surprised to know that Non-Banking Financial Companies or NBFCs are continuously outperforming banks today. According to the latest Financial Stability Report from RBI, the satisfaction rate of the customers of NBFCs is 15% more than those of banks.

What is an NBFC?

NBFCs are financial institutions that provide the same lending facilities of a bank, but function without a license. Services provided range from personal loans, credit facility, retirement planning, etc.

Comparison Between Banks and NBFCs

Let’s draw the comparison on the basis of certain fronts as follows:

1. Processing Efficiency

Banks: It is crucial for banks that customers fulfill the eligibility criteria on all fronts, including their credit history and CIBIL scores. More often than not, this defeats the whole purpose of borrowing in the first place. NBFC: NBFCs are quite lenient in this regard and loans are passed more smoothly and efficiently. This serves the purpose of borrowing in the case of an emergency. NBFCs have realized this market potential and serve accordingly.

2. Interest Rates

Banks: The interest rates of banks are in accordance with the regulation of central authorities such as RBI. Hence, they are changed at will and are often high and out of the reach of the common populace. NBFC: They have brought down the interest rates gradually and they are often at par, and even lower at times, as compared to banks. Such practice also brings down the EMIs for borrowers.

3. Rules and Regulations

Banks: Banks are regulated by the RBI Banking Act. Therefore, a plethora of rules and regulations, including strong background checks are usually involved in the loan process. NBFC: NBFCs are companies instead of banking institutions and are hence registered under Companies Act. Therefore, all rules and regulations rest on internal companies policies. This makes the loan availing process much easier and less stringent.

4. Credibility

Banks: When it comes to credibility, banks are more credible in the case of a doubtful loan situation. Government regulation gives them an upper hand. NBFC: These are not regulated and have their own set of rules and regulations. Thus, they may not be relied upon in case of an uncertain situation.

Which One is Better for Short Term Loans: Bank or NBFC?

Non-Banking Financial Institutions prove to be better than banks due to their ease of loan disbursement and less stringent regulations. It is also seen in some cases that even when the rate of interest is higher, customers often opt for NBFCs over Banks due to the lesser complications involved. NBFCs are also a better choice especially when a short-term loan is to be availed. They prove to be a life-saver for borrowers who have poor credit history due to which they will never be able to avail loans from banks. On the other hand, since such short term loans are offered by companies, there are high chances of availing other benefits such as discounts and offers. Banks are pretty immutable in such matters since they fall under the purview of governance. Lastly, short-term loans are usually required during emergencies where funds are needed right away and any delay would kill the whole purpose of availing the loan. Since banking processes may take several days to complete, NBFCs prove to be a far better choice since loans can be disbursed immediately, sometimes even in minutes.

How to Avail Short Term Loans from Early Salary

We at Early Salary have got your back whenever you are in dire need of funds. We disburse short loans in 3 easy steps and the money is directly credited to your bank account. All you have to do is log in and share your details with us before your request is approved and the cash is transferred. Read all about how it works here!  

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India Stack

In September 2010, India set out on an arduous journey. A journey to provide every one of its billion plus residents with a unique identification number. A journey that would prove to be the beginning of a FinTech revolution for the country.

INDIA STACK


What is India Stack?

In simple terms, India Stack is:
  • paperless and cashless servicedelivery system.
  • The India Stackis a set of APIs that allow governments and private companies to deploy cashless and paperless technology products.
  • The stack is a new technology paradigm that is scalable to handle massive data inflows, and is poised to enable entrepreneurs, citizens and governments to interact with each other transparently.
  • It is an open system to electronically verify businesses, people and services.
  • It gives the data to the concerned individual and lets him decide who he can share the data with. The smartphone will be the delivery platform for services such as digital payments, identification and digital lockers.
  • It is the largest application programming interface (API) on the planet.
  • Poised to change the lives of 1.1 billion Indians.
  • On December 1st 2016, in a much-awaited press conference, Mukesh Ambani, CMD of Reliance Industries, announced that Reliance Jio had crossed 50 million subscribers – a feat it had achieved in a mere 83 days. This made Jio the world’s fastest growing tech company surpassing the likes of Facebook, WhatsApp, and Skype. This astonishing achievement was made possible by the strategy of rolling out e-KYC across all outlets in India, allowing SIM activation in under 5 minutes. 95% of activations were done using e-KYC resulting at a staggering average rate of addition of 6 Lakh subscribers per day.
  • It gives data to the concerned individual and lets him decide whom he can share data with. The smartphone will be the delivery platforms for services such as DIGITAL PAYMENTS,IDENTIFICATION AND LOCKERS.

Here are the 5 tenets of India Stack and the Startups leveraging it

  • Paperless identification
    • Aadhaar’s 12-digit unique identification number, floated by the UIDAI in 2009, has more than one billion Indians registered who have became the basis for the India Stack.
    • This system of identification and delivery of services is already being used by the startup world.
    • Aadhaar to deliver banking services to citizens.
  • Paperless payments
    • mobile payments through the smartphone. This can become India Stack’s signature delivery mechanism to make India a digital cash economy.
    • Also, Nowdays the short term online loan is being provided by the companies in just a click without paper work through your smartphones
    • Digital payments platform Paytm has announced partnership with major NHAI toll concessionaries like Reliance Infra, Sadhbav, IRB, MEP, L&T and GMR to enable cashless payments at all state, national and city toll plazas.
  • Paperless documents
    • Although digitisation is growing, India consumes the largest amount of paper.
    • the per-capita consumption of paper is 9kg and is all set to double by 2020 because of the growth of the education industry.
    • But with smartphone prices dropping, at least financial services and the healthcare industry can move to a paperless scenario in major cities with the help of India Stack.
    • The Stack’s APIs allow startups to bring solutions that can make documents go digital. Like for example taking online loans can help in saving the all paper doscumentation and verifications.
  • E-KYC
    • Abbreviated as electronic Know Your Customer
    • A key challenge for the customers while opening bank accounts is providing address proof, identity proof and physical copies of documents.
    • E-KYC simplifies the customer experience for the Aadhaar-registered individuals to open bank accounts.
  • Digital signature
    • This would be the last mile to cross, and can be made simple between two or more parties executing contracts over the mobile.
    • Today, most HR offers are online documents that contain digital signatures.

How it affects India?

  • Citizens
Brings millions of Indians into the formal economy by reducing friction.
  • Software ecosystem
Fosters innovation to build products for financial Inclusion, healthcare & educational services at scale.
  • Government

Brings a paradigm shift in the way government services are delivered in a transparent, accountable and leakage free model

How EarlySalary uses India Stack for enabling E-KYC & Faster loan disbursement.
  • EarlySalary provides short term cash to salaried individuals without any paperwork or documentation, thus following the digitized route.
  • The transfer of money into an individual’s bank account is a seamless process without any physical layer involved.
  • The paperless process not only helps in management of time and resources but also avoids redundancy.
  • Because of digitization, the process becomes smoother, as opposed to the traditional banking systems that turn out to be cumbersome and time-taking.

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Calculation of Tax

Getting a salary is a wonderful feeling. It makes you feel rewarded for all the hours of dedicated work that you put in. But the happiness fades away when a large chunk of your hardearned income gets converted into tax. It is essential to figure out how you can avoid that high deduction in tax.

Income

The components that make up your salary include your Gross salary, Provident Fund, Insurance, Leave pay, Gratuity Employee State insurance and Labour Welfare Fund This income that is reveived by an employee is taxed under “Income from Salaries”.

You need to find out the slab that your salary will pertain to. After figuring that out, you need to be prompt in declaring your investments. This allows the employer to take into consideration the portion of your earnings that you have invested and he/she will accordingly deduct tax from your salary.

Declaration helps you to avoid the cumbersome process of filing for refunds from the Income Tax department.

Tax Calculation

Taxes are calculated on the annual income of a person, and an annual cycle (year) in the eyes of the Income Tax law starts on the 1st of April and ends on the 31st of March of the next calendar year. The law recognizes and classifies the year as “Previous Year” and “Assessment Year”.

Income Tax Slab Rates:

Income tax slab rates are for different categories of taxpayers, who are taxed progressively higher based on their earning.
On all the tables listed below, Education Cess of 2% and SHEC of 1% will be levied on the tax computed using the rates given below.
Under Section 87(A), an Income Tax Rebate of Rs.2,000 is provided for all individuals earning an income that’s less than Rs.5,00,000 per annum.
Income Tax Slabs for male individuals below the age of 60 and HUF:

Income Tax Slabs Income Tax Rates
Total income less than Rs.2,50,000. -NIL-
Total income greater than Rs.2,50,000 but less than Rs.5,00,000. 5% of the amount by which it exceeds Rs.2,50,000.
Total income greater than Rs.5,00,000 but less than Rs.10,00,000. 20% of the amount by which it exceeds Rs.5,00,000.
Total income greater than Rs.10,00,000. 30% of the amount by which it exceeds Rs.10,00,000.

Income Tax Slabs for female individuals below the age of 60:

Income Tax Slabs Income Tax Rates
Total income less than Rs.2,50,000. -NIL-
Total income greater than Rs.2,50,000 but less than Rs.5,00,000. 5% of the amount by which it exceeds Rs.2,50,000.
Total income greater than Rs.5,00,000 but less than Rs.10,00,000. 20% of the amount by which it exceeds Rs.5,00,000.
Total income greater than Rs.10,00,000. 30% of the amount by which it exceeds Rs.10,00,000.

Income Tax Slabs for all individuals above the age of 60 – Senior Citizens:

Income Tax Slabs Income Tax Rates
Total income less than Rs.3,00,000. -NIL-
Total income greater than Rs.3,00,000 but less than Rs.5,00,000. 10% of the amount by which it exceeds Rs.3,00,000.
Total income greater than Rs.5,00,000 but less than Rs.10,00,000. 20% of the amount by which it exceeds Rs.5,00,000.
Total income greater than Rs.10,00,000. 30% of the amount by which it exceeds Rs.10,00,000.

Income Tax Slabs for all individuals above the age of 80 – Super Senior Citizens:

Income Tax Slabs Income Tax Rates
Total income less than Rs.5,00,000. -NIL-
Total income greater than Rs.5,00,000 but less than Rs.10,00,000. 20% of the amount by which it exceeds Rs.5,00,000.
Total income greater than Rs.10,00,000. 30% of the amount by which it exceeds Rs.10,00,000.

Deductions: There are various sections under which you can invest your salary and reduce the taxable amount.

Deductions for your taxable amount are available under various sections of the Income Tax act 1961. They are as follows: –

1. Public Provident Fund (PPF):
By contributing to your PPF account, you can get tax deduction under Section 80C, the Indian Income Tax Act, 1961.

2. Life Insurance Premiums:
You can get income tax deduction for paying premium towards life insurance policies for self, spouse and child under section 80C of the Indian Income Tax Act, 1961. The amount received on maturity of the policy is free from tax. However, it is subject to the terms and conditions mentioned in your policy.

3. National Saving Certificate (NSC):
The amount invested in NSC is eligible for tax deduction under section 80C of the Indian Income Tax Act, 1961. National Saving Certificates is one of the highly secured modes of investments in India. But, the interest earned from NSC is taxable. As an NSC is a cumulative scheme, interest is reinvested and qualifies for tax deduction.

4. Bank Fixed Deposits (FDs):
You can get tax deduction by investing in fixed deposits for a tenure of 5 years, under section 80C of the Indian Income Tax Act, 1961. Many banks in India offer tax saving fixed deposits. However, the interest accrued on FDs is subject to tax

5. Senior Citizen Savings Scheme (SCSS):
Senior citizens can get tax deduction by investing in Senior Citizen Savings Scheme offered by banks. These schemes are eligible for tax deduction under Section 80C of the same act. The interest earned from these schemes is entirely taxable.

6. Post Office Time Deposit (POTD):
Investing in a five-year POTD, you can get tax deduction under Section 80C. However, interest accrued on the same is fully taxable.

7. Unit-linked Insurance Plans (ULIP):
Investing in ULIPs for yourself, spouse and your children, you can get tax deductions under Section 80C.

8. Home Loan EMIs:
Equated monthly installments paid to repay the principal amount of your home loan are eligible for income tax deductions under section 80C of the same act.

9. Mutual Funds & ELSS:
Investing in mutual funds and equity-linked savings scheme, you are eligible for tax deductions under section 80C, the Indian Income Tax Act, 1961.

10. Stamp Duty and Registration Charges for a Home:
Stamp duty and registration fee paid for transferring property are entitled for income tax deduction under section 80C, the Indian Income Tax Act, 1961.

11. Retirement Savings Plan:
You can also get income tax deductions by investing in retirement plans offered by LIC or other insurance providers. Contribution to the National Pension Scheme is also eligible for tax deduction.

12. Tuition Fees:
Tuition fee paid for your children’s education qualifies for income tax deduction under section 80C. However, the fee needs to be paid for full-time education in an Indian university, college and school for any two children. Tuition fee does not include any donations or development fee towards education institutions.

13. Medical Insurance Premiums:
Health insurance premium paid for self, spouse and children qualifies for income tax deduction under section 80D of the Indian income Tax Act, 1961. The deduction allowed under this section is Rs. 25,000 for youngsters and Rs. 30,000 for senior citizens.

14. Infrastructure Bonds:
Investing in infrastructure bonds, you become eligible for income tax deductions under section 80CCF of the Indian Income Tax Act.

15. Charitable Contribution:
Donating for charitable tasks will help you reduce your taxable income under section 80G of the Indian Income Tax Act, 1961. However, make sure that you declare the whole contribution before 31st December each year.

16. Treatment of Disabled Dependents:
Under section 80DD of the Indian Income Tax Act, 1961, you can get income tax deductions for medical expense incurred in the treatment of any disabled dependent of yours.

17. Deduction for Preventive Health Check-ups:
An amount of Rs.5000 spent for preventive health check-ups of an individual or his/her family members qualifies for tax deduction under section 80D of the Indian Income Tax Act, 1961.

18. Interest Paid on Education Loan:
You can get tax deduction on the interest paid for an educational loan under section 80E of the Indian Income Tax Act, 1961. The loan can be taken to pursue higher education by the employee, or for his/her spouse, children or a student to whom the employee is a legal guardian.

19. Deduction on House Rent Paid:
An employee can get income tax deduction for the house rent paid, if the employee or his/her spouse does not own residential accommodation at the place of employment. This deduction is usually applicable for salaried taxpayers under section 80GG of the Indian Income Tax Act, 1961.

Income Tax E-Filing:
Once tax is deducted, any tax refund is facilitated only when you submit your income tax return for that year. So any TDS on rent payments for NRIs, or TDS deduction by banks on your fixed deposits will be refunded only once you file your tax returns and claim the desired tax deduction. You will need to file for tax refunds online once you file your ITR for that year.

You can e-file your Income Tax Return, TDS return, AIR return and Wealth Tax Return online ,E-filing your return has obvious advantages like the fact that you won’t have to deal with the hassle of paperwork and waste time sorting through it all. You can simply log on to the secure website and e-file your return.

Hope this article gives you a clear picture of how taxes are deducted from your salary and how you can take the measures to reduce your taxable income.

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Overdraft Facility

What is meant by Overdraft facility?

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Overdraft facility is a credit line that is sanctioned to an individual against their assets. For example, you can mortgage your house with a bank and get a loan amount sanctioned against it.

If your house is worth 1 crore, then the bank might sanction you a loan of 50 lakhs after evaluating your repayment capabilities.

Why is there a need of an Overdraft Facility?

There are situations in life where in even the money saved for emergencies is not sufficient and this may lead to individuals in a dilemma. A lot of people keep 3months to 6months of expense aside on being advised by their financial consultants, however this might not be handy when there is an urgent need of cash.

This is where Overdraft facility comes in. Overdraft facility is a great way to raise funds for short-term if used wisely.

Usage of the overdraft money

The money is not disbursed immediately. You can keep withdrawing money from this overdraft account. It works similar to an approved personal loan. The interest will be charged from the day you borrow the loan. You can keep on borrowing and repaying it till the bank allows you to do so. The interest charged is 12-14 percent per year.

Assets that can be used as mortgage

Following can be offered to banks as assets: –
  • Insurance polices
  • Fixed Deposits
  • Shares
  • Bonds
The rate of interest varies for different collaterals.

The process

The process is similar to taking any other loan. You can offer a variety of collaterals to bank against your loan. There are pros and cons associated with different kinds of collaterals that you might offer. For example taking an overdraft against a property gives you a larger line of credit, however the time to evaluate is large. In case of fixed deposits as collaterals the process is much faster. Similarly the returns for life insurance properties are not good.

Depending upon the collateral, you should choose the limit. There is also a fee with a cap of 0.5 to 1 % charged while an overdraft is being granted.

Should one go for an Overdraft facility?

Overdraft facility is meant for disciplined individuals. If you use it for short-term trading in stocks, commodities etc, it may backfire. If you lose in these risk oriented measures, then you will have to pay the entire amount along with the interest incurred. Also if you fail to do so, then the collateral is liquidated. So choose very carefully.

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Celebrating Valentine’s Day with Early Salary

Valentine-blog

It’s the time of the year when promises are made new beginnings are carved, and bonds are strengthened.

It is the Valentine’s week. This is the week where people express their love for each other. This is the time when people exchange gifts with each other to showcase their affection.

However often we find ourselves in a state where our finances dwindle, and we are not able to fulfill our desires.

It is sad to acknowledge the fact that the most romantic day is approaching and we are low on cash. This makes us feel helpless and stressed. We even go in a state where we do not see the point in celebrating the day.

But EarlySalary never wants the lovebirds to miss out on such a day. We would want people to enjoy the day to it’s fullest without having to worry about cash.

With EarlySalary’s instant cash option, you can avail money whenever you want.

We would want you to cherish this day and make the most of it.

And not just the day of Valentine, EarlySalary would even suggest you to be the Earlybird where you get something unique for your loved one in the week prior to Valentine’s day.

Presents are always overwhelming, but they are even more endearing when given to people at the time when they are least expecting it.

With EarlySalary’s cash option, you can make Valentine’s day special in various ways. We can suggest some to give you a slight idea!

  • You can take your better half on a dinner date and celebrate the occasion in the grandest of days.
  • You can plan a holiday for your loved one, and travel to explore and experience
  • Valentine’s day falling on a weekday should not deter you in celebrating elaborately. You can make the weekday better than the weekend and paint the town red! You can take her out to the grooviest club and dance the night away!
  • You can get them something unique that will cause them to smile like never before
  • You can fill their wardrobes with the latest clothing and accessories
  • You can plan a weekend getaway for them away from the hustle and bustle of city life

We strongly believe that you all have a creative head and you can implement this Valentine’s day in the most special way for your loved one. EarlySalary’s always there as a friend when you need it!

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Personal Loans

>What are Personal Loans?

Pr Personal loans are a category of loans that one can borrow from financial instruments available. These loans can be used for a variety of purposes such as renovation of home, repayment of debts, unexpected expenditure etc. However we must note that personal loans are not easy to obtain, and there are certain qualifications that one needs to have to get approved for a personal loan.

Below are certain points that you can pay heed to if you are considering to go for a personal loan.

Personal loans are unsecured.

This essentially means that in this case no asset or collateral is required as opposed to secured loans. Hence defaulting on personal loans means that the lender cannot set aside any property or mortgage against the loan. This is one of the major reasons for the difficulty in accessing personal loans. However the lender does have other actions to take. This includes reporting to the credit bureaus, having a collection agency or filing legal procedures for the same.

Personal loans have a fixed amount.

The amount that you can take as a loan is fixed in case of a personal loan. The amount fixed depends upon various factors such as the borrower’s income, credit rating etc. The borrower with a better credit score and a higher income can borrow a higher sum of money.

Interest rates for personal loans are calculated according to the customer’s salary

The interest rate is allocated according to the customer’s salary, the amount being borrowed, loan tenure and other criteria that differ from one lender to another.

Personal loans a fixed repayment period.

The repayment time period is fixed and ranges from 1 to 5 years.

Types of Personal loans offered by financial instruments

  • • Personal Loan For Low CIBIL Score (Not easy to get)
  • • Business Startup Loan (For SME and Start-ups)
  • • Same day loans( For people with cash emergencies)
  • • Loans for the unemployed
  • • Govt. Loans for Small Scale Businesses( For small scale business)
  • • Small Business Loans for Women
  • • Corporate Loan (For existing businesses or industrial houses) • Home Improvement Loan
  • • Medical loan
  • • Marriage Loan

Personal loans affect your credit score.

There is no collateral for personal loans; however defaulting on a personal loan can affect your CIBIL score. However, everything from applying for a loan (which means a new inquiry on your credit report) to how timely you make payments will affect your credit. The key to maintaining a good credit score is making your loan payments on time each month.

EarlySalary here is a great option for individuals to get quick access to instant cash without any hassles involved. The personal loans are approved in a matter of just 10 minutes.

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Salary Advance

salary-advance-21

Some situations demand the need for that extra cash. The hammer of Emergencies can strike us anytime, and can cause a financial imbalance.
The very situations can put us in an embarrassing spot where in we have to resort to sources for borrowing personal loans.
One such source is our work place. Salary advance is the solution that we think of falling back onto. However getting an advance from our employer is not often an easy task.

There are various factors that impede our decision to ask for money from employer. We will list down some below
1. Work Environment: The work culture, and organisational policies are influential in determining the granting of salary advance. Some organisations post their salary day guidelines on their website. Some do not. In such cases seeking permission from the HR head or your boss may seem like an unachievable task. Explaining the need is an even more cumbersome task. You would have to figure out the perfect time to visit your boss, so that your request is not over looked.
These situations might push your bosses to look deep into your private finance management, which is not a great thing.
2. Paperwork: Layers of paperwork deter our will to ask for a salary advance. We dread taking a loan, because we do not want to surmounted by innumerable documents.
While some smaller organisations might agree for a loan with a handshake, others might ask you to deep dive into piles of documentation.
The documented agreement could talk about a repayment date. This could be your next salary date or a pre-decided period within which you need to repay the loan.
The paperwork could also include a clause that permits your employer to debit the repayment amount from your future paycheck. Some employers may even charge a few bucks to cover the paperwork.
3. Official agreements are binding: Borrowing from your employer is very different from borrowing from family or friends. You cannot have the attitude of “ I will pay whenever I can”. There is a fixed date, and failure to repay might be consequential in a bad way.
4. Your image perception by others: – Before you borrow, you are also enveloped by thoughts like “ What If I am unable to repay? What will my colleagues think of me” “Am I putting my reputation at stake by borrowing ?” “Will I strain my relationship with my boss?”All of these thoughts pester you even if you are borrowing for the first time. Also if this is a lifestyle issue, then resorting to your employer is a big no-no.
5. Acceptability : The higher you go up the corporate ladder, the probability of you getting a loan will be lower. Instead of going through the hassle of asking for a loan from your employer, use EarlySalary. EarlySalary is a one stop solution to all your cash worries. You do not have to think twice before asking us for money. Procedure for online application is very easy. The money transfer is an instant process, there is no paperwork and hesitation involved.
EarlySalary offers personal loans at a very low rate in the quickest possible way.
EarlySalary is a win-win solution for both the employees and the employers. The employers too would not have to bear any financial constraint. They would escape the paperwork involved.
EarlySalary renders a happy employee and employer situation.

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All about investing in shares

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Shares share an important space in the different media of investment such as bonds, cash and property.
Let’s start by defining shares.
Shares are basically miniature snippets of a company. By owning a share, you own a tiny segment of the company, and also a proportion of the company’s value
Research shows that shares have proven to be amazing long-term investments in the financial arena. They usually surpass government bonds, corporate bonds etc.
There are risks associated, but in the longer term, you get rewarded with benefits.
You can choose to purchase shares, or you can invest in mutual funds. Funds essentially buy a set of shares that are monitored and administered by a fund manager.
And when you own a share, then you are a shareholder for that company. This can mean that you have certain rights over the decision making in the company.
So essentially if you have a share with a company, then over the years, the investment value of it increases with the company’s progress and profit making.
Also, there are certain shares that allow you to reap the benefits together with the company. Meaning the profit gets shared with you as dividends.

Owning a share in big and small establishments
In case of fully established and renowned organisations, you get profits as dividends, however the progress is a not a very fast process.
These dividends can be a regular source of income for you, and you can even invest it for further monetary gains. The income that you procure from dividends is taxed at a certain rate.
For smaller organisations, there are usually no dividends. However the growth is better there.
Also if you wish to sell the shares for that company, it doesn’t come easy. It is hard to find buyers, because of the lesser credibility of the company.
Analysing the growth of the company and predicting it accurately is also critical to us.
Big organisations like Infosys have a lot of happy employees owing to their shares in the company. Here the drivers, plumbers, attendants are all millionaires.
In today’s date, around 100 individuals in Infosys are billionaires, and around 2000 of them are millionaires. The management has a habit of rewarding it’s employees over the years for their dedication and hard work. With the progressing organisation the value of shares, and the benefits for shareholders (including the drivers, attendants etc) increased manifolds.

Risks associated with shares
The economic conditions of the company and it’s surroundings determine the boom or downfall of shares. If the share value decreases then the importance of your investment also fades away.
Holding shares in just one organisation is also very risky. You should spread the risk by owning shares in multiple organisations. Diversity is significant here. What if you own shares in only one company, and it drastically witnesses a degradation in it’s value, then you are at the risk of losing all your money.
Also diversifying helps in better returns with more stability.

Buying and selling of shares
If you intend on purchasing or selling of shares, then it is advisable to consult a traditional stockbroker. You can also consult an online broker or a financial adviser. A financial advisor can guide you well on what to buy and what to sell.
We hope you analyse well before investing in a share. Happy Investing!
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Tax Free Allowances

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Tax rules vary from individuals with a salary to the ones having other/additional sources of income. They need to declare their salary income either offline or online to file their income tax returns.

Let’s first discuss allowance before proceeding ahead to Tax free allowances. Allowance is a moentary benefit provided by the employer to the employee that is over and above the base/regular salary. These benefits were introduced to cover the expenses that the individuals bore while at service. Some of the allowances are taxable, some partly taxable, and some of them are free from taxation.

There are various allowances on which benefits can be availed by salaried individuals on tax. These allowances are exempted under section 10(14) We will list them below:-
Special allowances under section 10(14)1 are

  • (i) Allowance granted to meet cost of travel on tour or on transfer.
  • (ii) Allowance granted on tour or journey in connection with transfer to meet the daily charges incurred by the employee.
  • (iii) Allowance granted to meet conveyance expenses incurred in performance of duty, provided no free conveyance is provided.
  • (iv) Allowance granted to meet expenses incurred on a helper engaged for performance of official duty.
  • (v) Academic, research or training allowance granted in educational or research institutions.
  • (vi) Allowance granted to meet expenditure on purchase/ maintenance of uniform for performance of official duty.

Under Section 10(14)(ii), the following allowances have been prescribed as exempt

Type of Allowance Amount exempt
(i) Special Compensatory Allowance for hilly areas or high altitude allowance or climate allowance. Rs.800 common for various areas of North East, Hilly areas of UP, HP. & J&K and Rs. 7000 per month for Siachen area of J&K and Rs.300 common for all places at a height of 1000 mts or more other than the above places.
(ii) Border area allowance or remote area allowance or a difficult area allowance or disturbed area allowance. Various amounts ranging from Rs.200 per month to Rs.1300 per month are exempt for various areas specified in Rule 2BB.
(iii) Tribal area/Schedule area/Agency area allowance available in MP, Assam, UP., Karnataka, West Bengal, Bihar,Orissa, Tamilnadu, Tripura. Rs.200 per month.
(iv) Any allowance granted to an employee working in any transport system to meet his personal expenditure during duty performed in the course of running of such transport from one place to another place. 70% of such allowance upto a maximum of Rs.6000 per month.
(v) Children education allowance. Rs.100 per month per child upto a maximum 2 children.
(vi) Allowance granted to meet hostel expenditure on employee’s child. Rs.300 per month per child upto a maximum two children.
(vii) Compensatory field area allowance available in various areas of Arunachal Pradesh, Manipur Sikkim,Nagaland, H.P., U.P. & J&K. Rs.2600 per month.
(viii) Compensatory modified field area allowance available in specified areas of Punjab, Rajsthan, Haryana, U.P., J&K,HP., West Bengal & North East. Rs.1000 per month.
(ix) Counter insurgency allowance to members of Armed Forces. Rs.3900 Per month.
(x) Transport Allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of residence & duty. Rs.800 per month.
(xi) Transport allowance granted to physically disabled employee for the purpose of commuting between place of duty and residence. Rs.1600 per month.
(xii) Underground allowancegranted to an employeeworking in under groundmines. Rs.800 per month.
(xiii) Special allowance in thenature of high altitudeallowance granted to members of the armed forces. Rs. 1060 p.m. (for altitude of 9000-15000 ft.)
Rs.1600 p.m. (for altitude above 15000 ft.)
(xiv) Any special allowancegranted to the members of the armed forces in the nature of special compensatory highly active field area allowance. Rs. 4,200/- p.m.
(xv) Special allowance granted to members of armed forces in the nature of island duty allowance.(in Andaman & Nicobar & Lakshadweep Group of Islands) Rs. 3,250/- p.m.

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