All posts tagged: tips to save tax

Rise of Online Lending Platforms

Online money lending

With the evolution in the field of information technology, the lifestyle of people started changing gradually. It started showing its effect on various sectors and one of them is banking and finance sector. Before the evolution, the process of completing a financial transaction was tough and physical presence of both person (borrower and lender) was must. But nowadays everything has changed even the way of money is being borrowed has changed by online lending platforms. One can easily borrow a sum of loan/money from the lender without knowing each other or meeting each other. The transactions are carried out in short time period with the help of information technology.

How it all started?

Lending has existed for thousands of years and has taken on many different forms throughout. At the very end of the 20th Century, First Internet Bank emerged. Consumers could apply for an online loan from their home or office computer, and they didn’t actually have to visit a bank or speak with a loan official. The number of start-ups in the online consumer lending space has grown significantly from a mere 2 in 2013 to 30 in 2015. These firms either operate as NBFCs, intermediaries for banks/NBFCs or serve as a P2P lending marketplace. People conduct all kinds of business transactions online that they used to perform in person. This includes shopping, paying bills, researching business decisions, and of course, applying for loans. As both consumers and business owners grow more comfortable with conducting business over the internet, online lending is also expected to continue to grow.

Today, online money lending is in full swing and only getting bigger day by day with lakhs for transactions and crores of the loan being distributed per month.

How one may lend money online?

The process of lending short term loan online is quite easy. It is divided into the 4 simple steps as shown

Lending Process

For instant loan the borrower needs to apply online, once the lender receives an application they will check for eligibility and approves/dis-approves the application. Once the application is approved the disbursement of the loan takes place.

These online platforms work more like a bank. When a person applies for a personal loan online there is evaluation of creditworthiness and repayment capacity of an individual. The only difference between banks and the online lending platforms is that there will be no executive visiting to collect the documents and provide other services A borrower needs to scan and upload documents for KYC, such as photo, PAN card, Aadhar card and passport. Then, they need to provide income-related documents such as six months’ bank statement, three months salary slip and income tax returns.

We are one of them

We all have gone through the situations where we are left with empty pockets and being broke at the end of the month is a common problem.

We at EarlySalary.com offer quick short term loans to salaried individuals. We plan to help provide a small bridge loan to tide over that short difficult period till your salary reaches your account. The process of applying for a loan on EarlySalary is very simple. It is consisting of three easy steps. The first step is that one needs to log in and apply for the loan after which loan request will be approved or rejected (depends upon credit worthiness) and at last as soon as the request is approved the cash will be transferred into your account immediately.

Sounds good? Let’s try it out here and get your salary in advance with EarlySalary.  
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All posts tagged: tips to save tax

How to file income tax?

income-tax-intimation

If handling finances wasn’t enough, we have taxes in place too to give us gripping nightmares.
However tax payment and filing income tax returns are both crucial for achieving a financial stability in life.
ITR filing is mandatory is a person’s gross total pay exceeds 2.5 lakhs.
The basic motive for filling income tax return is to showcase accountability and to display that appropriate tax has been paid.

There are both online and offline ways of filing income tax returns. However the income tax department made it mandatory for individuals with an income of more than 5 lakhs to file their income tax returns through the online route only.
We will write down about ways in which you can go ahead with this.

The offline Route:
If you have an income of less than 5 lakh per annum, and you decide to go ahead with the offline process then you can easily download the forms from the income tax website, or you can collect it from an income tax office. You will have to fill in some necessary documents including the ITR form and acknowledgement form(This contains the summary of ITR). The stamped copy of the acknowledgement form is handed back to you.
While Offline is the conventional route, Online is the more convenient one.

The Online Route:
It saves time. With technology popping up from everywhere, it becomes easy for you to file the returns of income tax. You do not have to fill in bank related details (such as the PAN number) over and over, all of that is auto-filled for you by the software. Thanks to the digital era!
The software is considerate and helps you calculate the tax amount payable or the refund amount due based on your income and deductions mentioned in the income tax report. This again saves time, is more efficient and reduces fallacies.
While you have chosen the online route, you will be happy to know that there are many options to opt for while filing income tax returns.

Apart from the income tax department’s websites. There are other deputed websites to carry out the same work. Some of the popular websites are Cleartax.in TaxSpanner.com, Makemyreturns.com etc.

There would be variations in these websites in terms of the packages offered, the costs associated, the procedures involved . Also many portals provide the process of filling taxes for free. These are for people with the income below a certain level.
So while opting for a package, you usually choose a cheap package if your income is through your salary. The package choice may turn to a costlier one, if the income is from various sources(Business, Capital gains, House properties etc)
You need to also ascertain the service provider. These are your finances that we are talking about and hence we need to be careful. You will be filling in information like investments, savings, bank account details etc, and hence you need to evaluate the confidentiality and privacy policy of the portal that you choose.

You do not have to do much while filling it through the government website. You can fill the details online itself on the ITR form and upload the form directly.
After the upload and submit, an acknowledgement is generated. This would be emailed to you as well.

For most of service providers, there is already a system built in for filling forms with ease, that suits the need of the users. Some service providers even have a question and answer format for form filling.
Once the acknowledgement is signed, it is received by the tax department to assess the calculative errors, wrong claims or deductions filled in by the tax payer for that year.
After rigorous evaluation, when the data filled in by the taxpayer is matched with the in-house data, an email is sent to the individual which is termed as intimation under section 143(1). This is to notify the individual that the acknowledgement has been received and is ready to be processed.

Tax consultants
Apart from these routes, you have many tax consultancies too in place. These consultancies have expertise on tax .These consultancies help individuals like you by providing the know-how around taxes. The organization provides complete and intact information on how to file the income tax returns. Examples are H&R Block, TaxConsultantsIndia etc.

Now we believe that filing income tax should not be a formidable task for you. With so many options the ease around them, you do not have to ever worry about getting stuck anywhere.

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All posts tagged: tips to save tax

Wise Investment

wise investment

Investing your hard earned savings seems a difficult task , but in reality it is not. You you don’t have to be rich to start investing. The key principle is to Start small and start early.

If we focus on the right path to investment, then we would be amused to see the amount that we save in a very short time. It is mind-boggling to see everyone around me spending a considerable time before buying a mobile phone, car or even grocery. But when It comes to investment , the most significant decision of our lives(financially), we just go about it without giving much thought to it.

Hence we want to talk about how investment can be prioritised in the right fashion, and we have the following to explain just that.

7 pillars to build a wise long term investment portfolio:-

  • 1. Put up a road map together: and answer two significant questions: a) How long do want to remain invested for? b) What’s your risk appetite?
  • 2. Diversify your investments: The investors falling in the category of high risk takers, also plan investment by diversifying their portfolio. This is important not to invest everything into a single basket or instrument class.
  • 3. It is imperative to Plan for long term and avoid the temptation of short term gains.
  • 4. Never invest in something that you do not fully/partially understand. Research well to understand and then invest accordingly.
  • 5. Invest to save tax : You can save tax by investing under section 80 C. The maximum amount that can be invested is 1.50 lakh, and this means your income gets reduced by this investment amount. So you are exempted to pay tax on this amount. Also the invested amount increases in a period of time. So it is a win-win situation for you.
  • 6. Investment should be your first priority, and it should begin with the initial sum of money, and not with the leftover amount. Practicing this as a habit will help you clearly evaluate the difference, and you will be surprised to see the funds that are actually available for you to spend.
  • 7. Every Rupee costs: don’t let go off a single rupee. Do not fall fall pray to exotic schemes and keep your portfolio very simple. Try to look for the extra yield that many banks offer such as the superior returns on saving as compared to others that don’t. Saving is as simple as spending. If you intend to do it then just follow it like you follow your daily rituals.

We are listing down some wise saving options for the young working population:

ELSS: (Equity Linked Savings Scheme) is a diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act. ELSS is a good option to invest in, because the investor has the opportunity to invest in equity markets as well apart from getting benefits of tax deduction. Also, ELSS has the shortest lock- in period of three years as compared to other tax saving options.

Mutual Funds: Mutual funds are diverse in nature.. They are broadly divided into Equities, Debts and Balance funds. Here the money is pooled in by investors in many bonds, stocks and other types of investment. It also gives you the access to investment professionals who expertise to manage your funds in the best way possible So owning shares in a mutual fund instead of owning individual stocks or bonds the risks get spread out. Diversification ensures that a loss in a particular investment gets nullified by gain in another

ULIP’s: ULIP or Unit Linked insurance plan is a life insurance product that provides the risk cover to the policy holder accompanied by the option to invest for long term. Recurring Deposit : The concept is fairly simple. You can allocate a fixed amount of money every month as deposit with a bank for a period that you specify. This will push you to save and invest on regular basis thus securing your future.

PPF :- The Public Provident Fund has been established by the central government. Any individual can open a PPF account with any nationalised bank or its branches that handle PPF accounts. The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 100,000. The entire balance can be withdrawn upon maturity i.e after 15 years of the close of financial year . The rate of interest is decided upon the government every year. Currently the rate of interest and principle is exempted from tax at the time of deposit and withdrawal.

We hope that this article helps you out in thinking better and planning wisely. Happy Investing!

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All posts tagged: tips to save tax

How to come out of debt trap ?

Debt Erased Acknowledging that you are over leveraged is one of most important steps to get debt free. If you understand your finances, you will learn to manage them better. We have all gone through phases in life when we release that we are spending more than what we are earning and its important we understand this and take steps to manage things better. Understand your debt: I have learned to split my debt into 4 parts
    1. Revolver: high cost debt usually linked to credit card spends or cash loans where interest loans are too high and not paying on time results in multiplier effect on outstanding.
    2. Live life debt: EMI loans linked to buying products or holidays. This type of debt is usually not visible as it gets camouflaged under subvention or supplier funding.
    3. Asset class debt: long term loans of cars and homes.
    4. Liquid class debt: using asset class products to take a loan like Gold loan, loan against property.
Some board thumb rules:
  • your loan amount should never be more than 8X your annual salary.
  • Revolver loans should never be more than 50% your monthly salary.
  • Total EMI should not be more than 50% of salary

Quick solutions to reduce debt burden:
  • 1. Balance transfer: Banks offer to people with large outstanding the option of balance transfer from one credit card to another. You can opt for a fixed duration balance transfer(3-12months repayment), in such transfers interest rates are usually 9 – 15% depending on your bank. Some banks also offer a ‘Lifetime duration’ option to make the repayment, though interest rates can be much higher (12-24%). Please note banks also levy process fee, which usually is 2% of the outstanding amount. After the bank verified your details, they will send you the cheque on the demand draft in favour of your existing credit card that you can use to repay.
  • 2. Converting outstanding balance to a EMI: usually if the net outstanding across credit cards is too high I will suggest you can take a small personal loan and repay your credit cards. Please note credit card debt comes at above 2% interest per month (36% – 46% per annum) and also attaches service charge while a simple personal loan will cost between 12-16% per annum.
  • 3. Negotiating lower interest rates with existing bank/institution or look at loan transfer: most institution allow some amount of negotiation usually linked to a bullet payment.
  • 4. Salary cover to paying credit card outstanding : usually credit card outstanding can be managed by paying over two salary cycles and managing funds better. Pay day or bridge salary loans like EarlySalary can be very usual in such stages.
  • 5. Loan against FD’s or Gold Loan: loan against asset comes at much lower interest usually loan against FDs come at 2-4% while Gold loans come b/w 4-8% per annum and thus are very good way to reduce debt burden.

Simple life rule to manage finances be save 30% of salary and don’t leave more than 25% in EMIs.
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All posts tagged: tips to save tax

Save your neck! Save your tax!

savetax Often it happens that salaried people end up paying more tax than actually needed. This happens mostly because of lack of knowledge about tax saving. If you feel that you have a similar story and are figuring a way out to reduce the tax burden, then this article is for YOU… Indeed, there are many ways; you can save tax while you are earning your salary. Here are 5 simple and legal tips to save tax. (more…)
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