Category Archives: Finance

Banks will Remain Closed for 15 Days in April Month, Check Details


Bank Holiday 2023: RBI has released list of bank holiday for month of April 2023. If you are planning to visit bank for any work then you need to plan in advance as bank will remain closed for the 15 days in April 2023.

Bank Holiday April 2023 1
Bank Holiday April 2023

List of Bank Holidays 2023

Date DayStatusReason
1st April, 2023SaturdayClosedAnnual Maintenance
2nd April, 2023SundayClosedSunday
4th April, 2023TuesdayClosedMahavir Jayanti
5th April, 2023WednesdayClosedBabu Jagjivan Ram Birthday(Telengana)
8th April, 2023SaturdayClosedSecond Saturday
9th April, 2023SundayClosedSunday
14th April, 2023FridayClosedBabasaheb Ambedkar Jayanti/Bohag Bihu
15th April, 2023SaturdayClosedVishu/Bohag Bihu/Himachal Day/ Bengali New Year
16th April, 2023SundayClosedSunday
18th April, 2023TuesdayClosedShab-e-Qadr
21st April, 2023FridayClosedEid-ul-Fitr(Ramadan Eid)/Gadiya Puja/Jumat-ul-Vida
22nd April, 2023SaturdayClosed4th Saturday of Month
23rd April, 2023SundayClosedSunday
30th April, 2023SundayClosedSunday

Bank Holidays in March 2023

DateDayStatusReason
25th March, 2023SaturdayClosed4th Saturday
26th March, 2023SundayClosedSunday
30th March, 2023ThursdayClosedRam Navami

RBI Official Link

For more information about bank holidays, you can also visit official website of Reserve Bank of India at https://rbi.org.in/Scripts/HolidayMatrixDisplay.aspx. You will find details for the all holiday here.

Also read Big Relief to Employees, Government took Big Decision on NPS

New Crypto Rule in India: What You Need to Know


New Crypto Rule in India: The Indian government has recently notified a new rule that brings the crypto sector under the Prevention of Money Laundering Act (PMLA), 2002. This means that crypto exchanges, custodians, wallets, and other service providers will have to comply with the anti-money laundering and counter-terrorism financing regulations, such as verifying the identity and address of their customers, maintaining records of transactions, and reporting suspicious activities to the authorities.

The new rule, which came into effect on March 9, 2023, is seen as a positive step by the Indian crypto industry, as it provides more clarity and legitimacy to the sector, which has been facing regulatory uncertainty and legal challenges for a long time. The industry hopes that the new rule will pave the way for a comprehensive crypto bill that will recognize and regulate crypto assets as a new asset class in India.

Chronology of Crypto Tax Levied by the Indian Government

The Indian government has been grappling with the issue of how to regulate and tax the crypto sector for a long time, as the popularity and adoption of cryptocurrencies have grown rapidly in the country. Here is a brief timeline of the major events and developments related to crypto tax in India:

  • 2017-2018: The Reserve Bank of India (RBI) issues a circular banning banks and financial institutions from dealing with or providing services to crypto entities, effectively cutting off the access of crypto exchanges and users to the banking system. The Income Tax Department also conducts surveys on some of the leading crypto exchanges and issues notices to thousands of crypto investors, asking them to disclose their income and pay taxes on their crypto gains.
  • 2019-2020: The Supreme Court of India quashes the RBI circular, restoring the banking access for the crypto sector and giving a boost to the industry. However, the government also introduces a draft bill in the parliament, proposing to ban all private cryptocurrencies and create a digital rupee as the official digital currency of the country. The bill is not passed and remains pending.
  • 2021: The government indicates that it will not impose a blanket ban on cryptocurrencies, but will regulate them as a new asset class. The government also forms an inter-ministerial committee to study the various aspects of crypto regulation and taxation. The crypto industry also forms a self-regulatory body, the Blockchain and Crypto Assets Council (BACC), to engage with the authorities and promote best practices and standards.
  • 2022: The government announces in the Union Budget 2022 that it will tax the income from the transfer of crypto assets at 30%, treating them as winnings from horse races or other speculative transactions. The government also imposes a tax deducted at source (TDS) on crypto transactions above a certain threshold. The government also clarifies that no deductions, except the cost of acquisition, will be allowed, and no losses in crypto transactions will be allowed to be carried forward. The government also states that it will introduce a bill to regulate crypto assets and create a digital rupee in the next session of the parliament.
  • 2023: The government notifies a new rule that brings the crypto sector under the Prevention of Money Laundering Act (PMLA), 2002, requiring the crypto service providers to comply with the anti-money laundering and counter-terrorism financing regulations. The government also passes the Crypto Currency and Regulation of Official Digital Currency Bill, 2023, which recognizes and regulates crypto assets as a new asset class, and creates a digital rupee as the official digital currency of the country.

Also Read Income Tax Notice: Tax notice will come for these 5 Transactions

Impact of Crypto under PMLA on Personal Finance

The new rule also has some implications for the personal finance of the crypto users and investors, as they will have to follow certain norms and guidelines while dealing with crypto assets. Here are some of the key points to note:

  • The new rule covers a wide range of transactions involving crypto assets, such as exchange between crypto and fiat currencies, exchange between different crypto assets, transfer of crypto assets, safekeeping or administration of crypto assets, and participation in and provision of financial services related to crypto assets.
  • The crypto service providers, such as exchanges, wallets, custodians, and intermediaries, will have to perform the know-your-customer (KYC) verification of their clients and users, and maintain records of their transactions and identity details for at least five years.
  • The crypto service providers will also have to report any suspicious or unusual transactions to the Financial Intelligence Unit (FIU), and cooperate with the authorities in case of any investigation or inquiry.
  • The crypto users and investors will have to provide their accurate and complete information to the crypto service providers, and update them in case of any changes. They will also have to comply with the tax rules and regulations applicable to their crypto income and assets.
  • The crypto users and investors will have to be careful and vigilant about the source and destination of their crypto funds, and avoid any involvement in any illegal or fraudulent activities, such as money laundering, terrorism financing, tax evasion, or cybercrime.
  • The crypto users and investors will have to bear the risk and responsibility of their crypto transactions, and be aware of the volatility and uncertainty of the crypto market. They will also have to diversify their portfolio and invest only what they can afford to lose.

The new rule that brings crypto under PMLA is a welcome step by the government, as it provides a regulatory framework and clarity for the crypto sector, and also safeguards the interests of the crypto users and investors. However, the new rule also imposes some obligations and duties on the crypto users and investors, and they will have to be more diligent and prudent in managing their personal finance involving crypto assets.

The Indian government has taken a gradual and cautious approach to crypto taxation, starting from a hostile stance to a more accommodative and supportive one. However, the crypto sector still faces some challenges and uncertainties, as the tax rules are complex and evolving, and the regulatory framework is not fully established. Therefore, the crypto users and investors in India need to be vigilant and informed about the legal and financial implications of their crypto activities, and follow the guidelines and norms issued by the authorities and the industry.

Hope this article will be able to provide you information you need.

Linking of PAN-AADHAR: You are going to Loose Your PAN Registration if You don’t do This


Linking of PAN-AADHAR

Linking of PAN-AADHAR: The deadline to link your Permanent Account Number (PAN) and Aadhaar is March 31, 2023. Do note that now there is a penalty applicable for linking PAN with Aadhaar. If you link your PAN with your Aadhaar now, then you are liable to pay a late fee of Rs 1,000 as the last date for linking without penalty was June 30, 2022 which is already past.

Why You Should Link Your PAN and Aadhaar Card Before March 31, 2023

Linking of PAN-AADHAR: PAN (Permanent Account Number) and Aadhaar (Unique Identification Number) are two important documents that every Indian citizen should have. They serve as identity proofs and also help in various financial transactions such as filing income tax returns, opening bank accounts, applying for loans, etc.

However, having these documents is not enough. You also need to link your PAN and Aadhaar card before March 31, 2023. This is a mandatory requirement as per Section 139AA of the Income Tax Act 1961. If you fail to do so, you may face some serious consequences such as:

  • Your PAN will become invalid and you will not be able to use it for any purpose.
  • You will not be able to file your income tax returns or claim refunds.
  • You may have to pay a penalty of up to Rs 10,000 for violating the law.
  • You may face difficulties in availing various government schemes and subsidies that require Aadhaar authentication.

Therefore, it is advisable to link your PAN and Aadhaar card as soon as possible. Here are some easy ways to do it:

How to Link your PAN and Aadhaar Card Online

Linking of PAN-AADHAR: One of the simplest ways to link your PAN and Aadhaar card online is through the official website of Income Tax Department www.incometax.gov.in. You can also use other websites or apps that offer online PAN-Aadhaar linking services such as HDFC Bank or UTIITSL.or

https://eportal.incometax.gov.in/iec/foservices/#/bl-link-aadhar

To link your PAN and Aadhaar card online, you need to follow these steps:

  • Visit the website or app that offers online PAN-Aadhaar linking service.
  • Enter your PAN and Aadhaar number along with other details such as name, date of birth, gender etc.
  • Verify your details by entering an OTP (One Time Password) sent to your registered mobile number or email id.
  • Submit the request and get a confirmation message on successful linking.

How to Link your PAN and Aadhaar Card Through SMS

Another convenient way to link your PAN and Aadhaar card is through SMS. You can send an SMS from your registered mobile number to either 567678 or 56161 with the following format:

UIDPAN<space><12 digit Aadhaar number><space><10 digit PAN>

For example: UIDPAN 123456789012 ABCDE1234F

You will receive an SMS confirmation on successful linking.

How to Link your PAN and Aadhaar Card Through Web Portal

A third option to link your PAN and Aadhaar card is through a web portal provided by Income Tax Department eportal.incometax.gov.in or incometaxindiaefiling.gov.in. This option requires you to register on the portal with your PAN as the user id if not already done.

To link your PAN and Aadhaar card through web portal, you need to follow these steps:

  • Log into the portal with your user id, password and date of birth.
  • A pop-up window will appear to link PAN with Aadhaar or go to ‘Profile Settings’ on the Menu bar and click on Link Aadhaar.
  • Enter your details such as name, date of birth, gender etc. as per both documents.
  • Tick on ‘I agree’ checkbox after verifying all details carefully
  • Click on ‘Link Now’ button You will get a message stating that “Your request has been submitted successfully”.

Benefits of linking your PAN and Aadhar card

Linking of PAN-AADHAR card has many benefits such as:

  • Simplifying the process of filing income tax returns
  • Reducing errors in verification of identity
  • Preventing frauds and misuse of documents
  • Enhancing transparency in financial transactions

Also read Metro Card Recharge: Now you can Recharge your Metro Card Through Whats App, Check How

What will happen if you don’t link your PAN and Aadhaar by March 31, 2023?

Here is a possible article about the consequences of not linking PAN with Aadhaar:

The government has made it mandatory for all taxpayers to link their Permanent Account Number (PAN) with their Aadhaar number by March 31, 2023. This is to prevent tax evasion and frauds using multiple PAN cards. If you have not linked your PAN and Aadhaar yet, you should do it as soon as possible to avoid any inconvenience and penalty.

According to the Income Tax Department, if you do not link your PAN and Aadhaar before March 31, 2023, your PAN will become inactive. This means that you will not be able to use your PAN for any financial transactions where quoting of PAN is mandatory. Some of these transactions are:

  • Filing income tax returns
  • Opening a bank account
  • Applying for a loan or credit card
  • Buying or selling property or shares
  • Making cash deposits or withdrawals above Rs 50,000
  • Investing in mutual funds or insurance

If you link your PAN to your Aadhaar after March 31, 2023, you will have to pay a late fee of Rs 1,000 as per Section 234H of the Income Tax Act. This fee will be in addition to any other penalty that may be imposed by the Income Tax Department for non-compliance.

Therefore, it is advisable to link your PAN and Aadhaar before the deadline to avoid any hassle and extra cost. You can link your PAN and Aadhaar online through the e-filing portal of the Income Tax Department.

Who are Exempted from PAN-AADHAR Linking

However, some categories of people are exempted from linking their PAN with Aadhaar. These are:

  • Non-residents as per Income Tax Act
  • Individuals above 80 years of age
  • Individuals residing in Assam, Jammu & Kashmir and Meghalaya
  • Individuals who do not have an Aadhaar number or have applied for one but have not received it yet

If you belong to any of these categories, you can furnish a copy of your passport, voter ID card or driving license instead of Aadhaar while filing your income tax returns.

To check whether your PAN and Aadhaar are linked or not, you can visit https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/AadhaarPreloginStatus.html and enter your PAN and Aadhaar number. You will get a confirmation message if they are linked successfully.

Linking your PAN and Aadhaar is a simple process that can save you from a lot of trouble later on.

So don’t delay it any further and do it today!

Good News for SBI-HDFC-ICICI Bank Customers- RBI have made these change in UPI Transaction Limit


UPI Transaction Limit: Unified Payments Interface (UPI) has become one of the most popular modes of digital payments in India, offering a quick, convenient, and secure way to transfer money between bank accounts. However, different banks have set different transaction limits on UPI transfers, which can vary based on factors such as the type of bank account, the user’s transaction history, and the purpose of the transfer. In this article, we will discuss the transaction limits set by some of the major banks in India on UPI transfers.

Transaction Limit of Banks on UPI

UPI transactions also have certain limits that vary across banks. Depending on the bank, it could be anywhere from INR 10,000 to INR 1 lakh per transaction. For instance, the maximum amount you could transfer in a single transaction using the BHIM UPI app is INR 1 lakh, and you could only transfer to a maximum of INR 1 lakh in a day. Some banks also have limits on the number of transactions per day or per month.

  1. State Bank of India (SBI): SBI, the largest bank in India, has set a daily transaction limit of Rs. 1 lakh per day on UPI transfers, with a maximum of 10 transactions per day. However, the bank may allow higher transaction limits based on the user’s transaction history and other factors.
  2. HDFC Bank: HDFC Bank has set a daily transaction limit of Rs. 1 lakh per day on UPI transfers, with a maximum of 10 transactions per day. However, the bank may allow higher transaction limits based on the user’s transaction history and other factors.
  3. ICICI Bank: ICICI Bank has set a daily transaction limit of Rs. 1 lakh per day on UPI transfers, with a maximum of 10 transactions per day. However, the bank may allow higher transaction limits based on the user’s transaction history and other factors.
  4. Axis Bank: Axis Bank has set a daily transaction limit of Rs. 1 lakh per day on UPI transfers, with a maximum of 20 transactions per day. However, the bank may allow higher transaction limits based on the user’s transaction history and other factors.
  5. Punjab National Bank (PNB): PNB has set a daily transaction limit of Rs. 50,000 per day on UPI transfers, with a maximum of 10 transactions per day. However, the bank may allow higher transaction limits based on the user’s transaction history and other factors.
  6. Kotak Mahindra Bank: Kotak Mahindra Bank has set a daily transaction limit of Rs. 1 lakh per day on UPI transfers, with a maximum of 10 transactions per day. However, the bank may allow higher transaction limits based on the user’s transaction history and other factors.

Benefit of UPI Transaction Limit by Banks

The benefit of UPI transaction limit by banks is that it helps to prevent fraud and misuse of the system. By imposing a limit on the amount and frequency of transactions, banks can reduce the risk of unauthorized transactions or cyberattacks. It also helps to maintain the stability and efficiency of the UPI network by avoiding congestion or overload.

However, some users may find the UPI transaction limit by banks inconvenient or restrictive. For example, if they want to make a large purchase or pay a high bill using UPI, they may have to split their payment into multiple transactions or use another mode of payment. They may also face issues if they exceed their daily or monthly limit due to multiple transactions with different merchants or service providers.

Therefore, UPI transaction limit by banks has both advantages and disadvantages for users. It is important for users to be aware of their bank’s UPI transaction limit and plan their payments accordingly. They can also check with their bank if they can increase their limit based on their usage pattern and credit history.

These transaction limits are subject to change at the discretion of the banks, and may also depend on the type of bank account, the user’s transaction history, and the purpose of the transfer. It is advisable to check with the respective bank’s customer service or website for the latest transaction limits before making a UPI transfer.

Also read: EPF- Employee Provident Fund Explained

Key Changes Made by RBI for UPI Transaction

There are a few new rules of RBI on UPI transaction that have come into effect recently or will come into effect soon. Here are some of them:

  • The threshold for the contactless card transactions through cards and UPI will be increased from Rs 2,000 to Rs 5,000 from January 1, 2021. This is done to encourage digital payment which is truly safe and secure.
  • The transaction limit for payments through UPI for retail buying of government securities and IPO applications will be enhanced from Rs 2 lakh to Rs 5 lakh. This is proposed to facilitate greater retail participation in these instruments.
  • The customers will have to provide additional factor authentication (AFA) for recurring online transactions using cards, wallets or UPI above Rs 5,000 from October 1, 2021. This is done to improve customer convenience and safety while making recurring payments.
  • The Reserve Bank has launched UPI123Pay – Option to make Unified Payments Interface (UPI) payments for feature phone users on March 8, 2022. This is done to promote financial inclusion and digital literacy among the masses.

In conclusion, UPI has revolutionized the way digital payments are made in India, but the transaction limits set by different banks can sometimes pose a challenge for users. It is important to be aware of these limits and plan transactions accordingly to avoid any inconvenience or delays. With UPI usage continuing to grow, it is likely that these transaction limits will also evolve to keep up with the changing needs of customers.

General Budget 2023: Old Tax Vs. New Tax Regime- Which one is Better?


Old Tax Vs. New Tax Regime: With the announcement of Budget 2023-24, Finance Minister Nirmala Sitharaman has said she is making new tax regime as default regime. However, citizens will have option to avail the benefit of old tax regime.

General Budget 2023: Old Tax Vs. New Tax Regime

The amount of taxes you pay is likely to change ahead. Finance Minister Nirmala Sitharaman in her budget speech has made key major announcements for hard-working middle-class citizens who pay taxes. These are called new income tax slabs and the Centre has decided to make it a default tax regime. However, the old income tax slabs regime has not been abolished as well. Instead, taxpayers now have the option between the two regimes when paying for their taxes. But which one is better?

What is the new income tax slabs regime?

Firstly, FM cleared the air over the rebate on an income of ₹5 lakh which is free from taxes in both old and new tax regimes. This will change ahead!

Sitharaman has proposed to make the exemption limit to ₹7 lakh under the new tax regime — which means that up to this income amount a taxpayer will not be required to pay any tax.

Further, she proposed of change the tax structure in this regime by reducing the number of slabs to five and increasing the tax exemption limit to ₹3 lakh.

Hence, the new tax rates are:

  • Income slab of ₹3 lakh: No tax levied
  • Income of ₹3 lakh to ₹6 lakh: 5% tax rate
  • Income of ₹6 lakh to ₹9 lakh: 10% tax rate
  • Income of ₹9 lakh to ₹12 lakh: 15% tax rate
  • Income of ₹12 lakh to ₹15 lakh: 20% tax rate
  • Above ₹15 lakh income: 30%.

Additionally, the FM has proposed to reduce the surcharge rate from 37% to 25% on the highest tax rate in the country of 42.74% — which is among the highest in the world. With the reduction in the surcharge rate, the maximum rate would be 39%.

Also, FM proposed to extend the benefit of the standard deduction to the new tax regime. Each salaried person with an income of ₹15.5 lakh or more will thus stand to benefit by ₹52,500.

But FM also said, “we are also making the new income tax regime as the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime.”

What are old income tax slabs?

The old tax regime have following tax slabs which have been opted by many citizens instead of announcement of new tax regime in previous year.

  • Income up to ₹2.5 lakh: Exempted from tax
  • Income of ₹2.5 lakh to ₹5 lakh: 5% tax rate
  • Income of ₹ ₹5 lakh to ₹7.5 lakh: 15% tax rate
  • Income of ₹7.5 lakh to ₹10 lakh: 20% tax rate
  • Income of above ₹10 lakh: 30% tax rate

Which one is better?

Before understanding which is a better regime, you need to first understand which factors will be taken into consideration for calculation of income tax amount.

According to India’s leading tax and financial services software platform, Clear’s calculation, without any deduction claims, the new tax regime is beneficial. A taxpayer saves more taxes under the new tax regime. It needs to be noted that this would be without any deductions that are available in old regime.

Also Read General Budget 2023: Income Tax Exemption Limit Increased from Rs 5 lakh to Rs 7 lakh, Finance Minister gave Statement

In the older regime, a tax rebate is applicable till income of ₹5 lakh under section 87A of the IT Act. The maximum rebate comes to around ₹12,500. Now, this rebate is added to income tax payable above ₹5 lakh. Hence, only the income class of ₹5 lakh salary, does not pay any taxes.

Examples:

For example, Mr. XYZ has a salary of ₹10 lakh and decided to choose the old tax regime. Let’s suppose, tax deductions under sections 80C, 80D, and 24 (b) cumulatively come to around ₹2.5 lakh. Taking into consideration the deduction amount, the taxable amount is around ₹7.5 lakh ( ₹10 lakh minus ₹2.5 lakh tax benefits).

Tax amount on income of ₹7.5 lakh:

Till ₹2.5 lakh income: Nil Tax

Income tax slab between ₹2.5 lakh to ₹5 lakh: 5% tax rate on ₹2.5 lakh (the difference between ₹2.5 to ₹5 lakh) which comes to around ₹12,500

Income tax slab between ₹5 lakh to ₹10 lakh: 20% tax rate is levied on the remaining ₹2.5 lakh, taking the amount to ₹50,000

Taking the above into consideration, the tax amount that needs to be paid would be ₹62,500 ( ₹12,500 + ₹50,000).

But if deductions are not included in the old regime:

– Till income of ₹2.5 lakh, no tax will be levied.

– ₹12,500 tax between income bracket of ₹2.5 lakh to ₹5 lakh

– 20% levied on the remaining ₹5 lakh which falls under the income tax bracket of ₹5 lakh to ₹10. The tax amount here comes to around ₹1 lakh.

Taking these into consideration, the tax payable amount would be ₹1,12,500 in the old regime.

Under the revised new tax regime: 

Taking the same example into consideration, the taxable amount will be ₹10 lakh.

– ₹0 to ₹3 lakh: No Tax

– ₹3 lakh to ₹6 lakh: Tax rebate of ₹15,000 (5% under section 87A)

– ₹6 lakh to ₹9 lakh: 10% tax rate which leads to ₹30,000

– ₹9 lakh to ₹12 lakh slab: The remaining ₹1 lakh amount falls under this bracket, hence, the tax amount here would be ₹15,000

The tax amount payable would be ₹60,000 ( ₹15,000 + ₹30,000 + ₹15,000) in the new revised regime.

Hence, without the tax deduction amount claimed, the new regime is much better for taxpayers to save on taxes. But if deductions are included, then old regime is more beneficial.

For example: If your salary comes to around ₹20 lakh. Under this salary income, the highest tax rate of 30% is same for both new and old regime, however, the tax amount varies. 

Old regime:

Under the old regime, without claiming tax deduction benefits, here’s how your tax amount will be.

  • Income till ₹2.5 lakh: No tax
  • Tax on income slab from ₹2.5 lakh to ₹5 lakh: ₹12,500 payable (5% of ₹2.5 lakh).
  • Tax on income slab from ₹5 lakh to ₹10 lakh: Tax amount to come around ₹1,00,000
  • Above ₹10 lakh: 30% levied on the remaining amount of ₹10 lakh – the amount comes to around ₹3,00,000.

The tax payable amount is ₹4,12,500 ( ₹12,500 + ₹1 lakh + ₹3 lakh) on a salary of ₹20 lakh in the old regime.

New revised regime:

  • Same example:- No tax till ₹3 lakh
  • ₹15000 between income slab of ₹3 lakh to ₹6 lakh (5%)
  •  ₹30,000 between income tax slab of ₹6 lakh to ₹9 lakh (10%)
  •  ₹45,000 between income slab of ₹9 lakh to ₹12 lakh (50%)
  •  ₹60,000 between income slab of ₹12 lakh to ₹15 lakh (20%)
  • ₹1,50,000 on above ₹15 lakh (30% on ₹remaining ₹5 lakh)
  • The total tax payment comes to around ₹3 lakh ( ₹15,000 + ₹30,000 + ₹45,000 + ₹60,000 + ₹1.5 lakh).
  • Similar is the case with other income salaries. 

From the above it can be seen that individuals earning salaries upto ₹7 lakh are biggest beneficiary in new regime. 

“Taxpayers who want to avoid the hassles of claiming traditional deductions, who usually do not opt for HRA or claim other reimbursements via an employer or do not want to invest in traditional 80C, may now see the new regime as an option.

“Taxes are lower yet old regime may still play out better for taxpayers, all depends on how well structured their CTC is, to allow for reimbursements and claims and how well they can maximize the exemptions available to them. Nevertheless, the messaging is clear, the government is aiming to move towards the new tax regime.”

FAQ- New Tax Regime Vs. Old Tax Regime

Ques: Which tax regime is better old or new?

Ans- Old vs new income tax regime: Those who claim less than ₹3.75 lakh exemption will save money in the new tax regime, a ministry official explained. “So, a taxpayer who claims deductions less than ₹3.75 lakh while filing the annual I-T returns will be advised to opt for the new tax regime as declared in the Budget.

Ques: What is the benefit of new tax regime?

Ans: The new tax regime was announced for individuals who were unable to claim the benefits of the deductions and tax exemptions available. It also helps to ease the compliance burden for the salaried taxpayers. Currently, the new tax regime offers 6 tax slabs and lower tax rates as compared with the old income tax regime.

Ques: What is the drawback of new tax regime?

Ans: Deductions of leave travel. House rent allowances deductions. Many special allowances will now no longer have deductions such as children education allowance, hostel allowance, uniform allowance and many more. No deductions on allowances to MPs/MLAs.

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Loan Restructuring Vs. Loan Refinancing: A Guide for Borrowers

Loan Restructuring Vs. Loan Refinancing: Both terms are quite confusing and can be understand as interchangeable or synonym for each other. Well it is not as both terms are quite different and serve specific purpose. In this article we will understand both of term in details so that you will not confuse in future.

Loan Restructuring Vs. Loan Refinancing: A Guide for Borrowers

What is Loan Restructuring?

Consider an example that, a small business owner in India who operates a clothing store may have taken out a loan to purchase inventory, but due to the COVID-19 pandemic, the store has experienced a significant reduction in footfall and revenue. The business owner may be unable to meet the loan repayment schedule and would have to consider loan restructuring as an option.

Loan restructuring is the process of renegotiating the terms of a loan between the lender and borrower. This can include changes to the interest rate, payment schedule, or the length of the loan. The goal of loan restructuring is to make the loan more affordable for the borrower, allowing them to continue making payments and avoid defaulting on the loan.”

Let’s Understand Further-

  • Reason for Restructuring :
    • a) Financial Hardship: One of the most common is financial hardship. If a borrower has experienced a loss of income or unexpected expenses, they may no longer be able to afford the terms of their loan.
    • b) Difference in Interest Rate: Some borrowers may have taken out a loan at a higher interest rate than they could have qualified for at the time, and wish to refinance for a lower rate.
  • Who will Benefit: Loan restructuring can be beneficial for both the lender and the borrower.
    • a) For the lender– it can help prevent default on the loan and reduce the risk of losing money.
    • b) For the borrower– it can make loan payments more affordable and prevent the negative consequences of default, such as legal action.
  • Options under Restructuring for Individual: There are several options available for loan restructuring.
    • a) Term Modification: One of the most common restructuring is a modification, in which the lender agrees to change the terms of the loan.
    • b) Reduced interest rate
    • c) Extended loan term
    • d) Change in payment schedule
  • Options under Restructuring for Businesses: For Businesses loan restructuring can include
    • a) Debt forgiveness or debt-equity swaps– Debt forgiveness is when a lender forgives a portion of the debt, which can be beneficial for businesses that are struggling to make loan payments.
    • b) Debt-equity swaps– A debt-equity swap is when a lender takes an ownership stake in the business in exchange for debt forgiveness. This can be beneficial for businesses that need to raise capital but may not be able to qualify for a loan.

Under the RBI’s loan restructuring scheme, the business owner could request a reduction in the interest rate or an extension of the loan repayment period, making the loan more affordable and manageable.

Overall, loan restructuring is an important tool for borrowers and lenders to help manage loan payments and avoid default. It can be beneficial for both parties, allowing borrowers to make loan payments more affordable and lenders to reduce the risk of losing money. If you are experiencing financial hardship or wish to lower your interest rate, consider reaching out to your lender to discuss loan restructuring options.

It’s worth noting, that loan restructuring is not always an option, the lender might not agree to do so and the borrower might not qualify. It’s important to understand the terms and conditions of the loan agreement and the lender’s policies on loan restructuring before making any decision. It’s also important to seek professional advice, before making any decision regarding loan restructuring.

Also read Insurance Portability- Meaning, Advantages & Disadvantages

Loan Restructuring in Indian Businesses

In India, loan restructuring has become a common practice for businesses that have been impacted by the economic downturn caused by the COVID-19 pandemic. Many businesses have seen a significant reduction in revenue and cash flow, making it difficult for them to meet their loan obligations. In response, the Reserve Bank of India (RBI) has introduced several measures to help businesses restructure their loans.

One such measure is the loan restructuring scheme announced by the RBI in August 2020, which allows eligible borrowers to restructure their loans without being classified as defaulted. Under this scheme, borrowers can request a one-time restructuring of their loans, which can include changes to the interest rate, repayment period, and other terms and conditions.

Also Read OPD Insurance- Why it is important in your medical Insurance Policy?

What is Loan Refinancing?

Consider a situation, a home-owner in India may have taken out a home loan at a high-interest rate several years ago. Over time, interest rates have dropped, and the borrower may wish to refinance the loan to take advantage of the lower interest rate. By refinancing the loan, the borrower can lower their monthly payments and ultimately pay less interest over the life of the loan.

Loan refinancing is the process of replacing an existing loan with a new one. The new loan typically has different terms and conditions than the original loan. The goal of loan refinancing is to improve the overall financial situation of the borrower, by reducing the interest rate, monthly payments, or overall cost of the loan.”

Lets Understand Further-

  • Reason for Refinancing: Refinancing can be done for a variety of reasons,
    • a) Lower Interest Rate– the most common reason for refinancing is being to lower the interest rate and monthly payments. For example, if a borrower initially took out a loan at a high-interest rate, they may wish to refinance to a loan with a lower interest rate, which will result in lower monthly payments.
    • b) Increase Time Duration: Additionally, some borrowers may want to refinance to a loan with a longer repayment term, which will also lower the monthly payments.
    • c) Consolidation- Another reason to refinance is to consolidate multiple loans into a single loan, this can make it easier to manage the loan payments and simplify the borrower’s financial situation. This is especially useful when borrowers have multiple loans with different interest rates and repayment terms. By consolidating these loans into a single loan, borrowers can take advantage of a lower interest rate and more favorable repayment terms.
  • Options Under Loan Refinancing: There are different types of loan refinancing options available, such as
    • Home Mortgage Refinance
    • Student Loan Refinance,
    • Auto Loan Refinance,
    • Personal Loan Refinance and
    • Business Loan Refinance.

Each type of loan has its own set of terms and conditions, and borrowers should consider the specific needs and goals of their financial situation before deciding which type of loan to refinance.

In recent years, The Reserve Bank of India (RBI) has introduced several measures to help borrowers refinance their loans. For example, the RBI has introduced a scheme for priority sector lending that allows eligible borrowers to refinance their existing loans with more favorable terms and conditions. Additionally, the RBI has introduced a scheme for external commercial borrowings (ECBs) that allows borrowers to refinance their existing ECBs with more favorable terms and conditions.

Also read EPF- Employee Provident Fund Explained

Pro & Cons of Loan Restructuring

It is very important to consider various factor before opting for Loan restructuring or Loan refinancing as there are various factors involved with it. Some of the pro and cons associated with loan restructuring are-

Pros of Loan Restructuring:

  1. Reduced monthly payments: By restructuring a loan, the borrower may be able to reduce their monthly payments, which can make it easier to manage their debt and make ends meet.
  2. Lower interest rate: Restructuring a loan can also mean a reduction in the interest rate, which can result in lower overall cost of the loan.
  3. Avoiding default: For borrowers who are struggling to make their loan payments, loan restructuring can help them avoid default and prevent negative consequences such as foreclosure or bankruptcy.
  4. Flexibility: Loan restructuring allows borrowers to customize the terms of their loan to fit their specific needs and financial situation.

Cons of Loan Restructuring:

  1. Cost: Restructuring a loan can come with additional costs such as legal fees, appraisal costs, and other charges.
  2. Credit score impact: Restructuring a loan can have a negative impact on a borrower’s credit score, particularly if the loan was restructured to avoid default.
  3. Long-term consequences: While loan restructuring can provide short-term relief, it may not address the underlying financial issues that led to the need for restructuring in the first place.
  4. Not always possible: Some borrowers may not qualify for loan restructuring, particularly if their credit score is too low or their financial situation is too dire.
  5. Depend on the lender: Loan restructuring is dependent on the lender’s policies and willingness to work with the borrower.

It’s important to weigh the pros and cons of loan restructuring before making a decision. Additionally, borrowers should seek professional advice and consider the terms and conditions of the loan agreement and the lender’s policies on loan restructuring before making any decision.

How to Navigate Loan Restructuring and Loan Refinancing

Navigating loan restructuring and loan refinancing in the Indian market can be a complex process, but there are a few steps that can help guide you through the process.

  1. Understand your options: Before you begin the process, it’s important to understand the different options available to you. This includes loan restructuring, loan refinancing, and debt consolidation.
  2. Review your current loan: Take a close look at your current loan and the terms and conditions that come with it. This will help you understand the implications of loan restructuring or refinancing.
  3. Assess your financial situation: Before you make a decision, it’s important to assess your current financial situation and understand your ability to repay the loan.
  4. Seek advice: Consult with a financial advisor or a loan specialist to get expert advice on the best course of action.
  5. Compare offers: Once you have a clear understanding of your options, it’s important to compare offers from different lenders to find the best deal.
  6. Negotiate with your lender: After you have chosen the best option, negotiate with your lender to get the best possible terms and conditions.
  7. Review the terms and conditions: Carefully review the terms and conditions of the loan before signing any agreements.
  8. Keep track of your payments: Keep track of your payments and make sure that you are keeping up with the new repayment schedule.

It is always recommended to consult with a financial advisor or a loan specialist before making any decision.

Impact of Loan Restructuring and Loan Refinancing on Business Operations and Growth

Loan restructuring and loan refinancing can have both positive and negative impacts on a business’s operations and growth. Some potential impacts include:

Positive impacts:

  1. Improved cash flow: By restructuring or refinancing a loan, a business may be able to reduce its monthly payments and improve its cash flow.
  2. Increased financial flexibility: Restructuring or refinancing a loan can provide a business with additional funds, which can be used to invest in new projects or expand operations.
  3. Reduced interest rates: By refinancing a loan, a business may be able to secure a lower interest rate, which can lead to significant savings over the life of the loan.
  4. Improved credit profile: By successfully restructuring or refinancing a loan, a business may be able to improve its credit profile, which can make it easier to secure financing in the future.

Negative impacts:

  1. Increased costs: Restructuring or refinancing a loan may come with additional costs, such as origination fees or prepayment penalties.
  2. Reduced credit availability: A business may be required to put up collateral or provide additional guarantees in order to secure a loan, which could limit its ability to secure additional financing in the future.
  3. Extended repayment period: Restructuring a loan may result in an extended repayment period, which can lead to additional interest charges over time.
  4. Reduced profitability: If a business is unable to meet the terms of the new loan, it could lead to a reduction in profitability or even business failure.

It is important to weigh the potential positive and negative impacts of loan restructuring or loan refinancing, and consult with a financial advisor before making a decision.

Hope that this article is able to explain both term in detail. Hope you don’t need to opt for these options but if you are going through cash crunch then take advise of financial advisor before choosing these options.

Planning for Retirement- 5 Best Govt-Backed Pension Plan you can Apply for in 2023


Planning for Retirement is necessary as life expectancy is increasing and people are living longer, which means that retirement can last for many years. This makes it even more important to plan for retirement to ensure that there is enough money to last through a potentially long retirement period.

Image Courtesy-Insular Life

Retirement planning is necessary because it helps ensure that an individual has enough money to maintain their standard of living during retirement. Without proper planning, an individual may find themselves unable to afford the things they need or want during retirement, leading to financial stress and potentially poverty. Here are some of the popular government backed retirement schemes available to invest.

1. Pradhan Mantri Vaya Vandana Yojana

Life insurance corporation of India runs a scheme Pradhan Mantri Vaya Vandana Yojana for investors who plans to invest for retirement planning. In this scheme, any individual can invest up to the maximum of Rs. 15 Lakh (maximum age capped at 60 Years). The amount of pension depends upon the amount of investment.

If one invest Rs. 15 Lakh in the scheme, they will get Rs. 9,250 as monthly pension along with the premium payment amount. Investors can subscribe for Pradhan Mantri Vaya Vandana Yojana both online and offline. The last date for the investment for this year is 31st March 2023.

Tenure of the Scheme10 years,
Interest rate7.6% p.a.
Frequency of computing interestQuarterly
Tax aspectsTax Benefit under Section 80C
Investment to be in multiples ofRs.1,000
Maximum investment limitRs.15 lakh
Minimum eligible age60 years
Maximum PensionRs. 9,250

2. Senior Citizen Savings Scheme (SCSS)

This is a savings scheme for senior citizens in India, with a maturity period of 5 years. It offers a higher interest rate than other savings schemes and it provides tax benefit under section 80C. Citizens at or above age of 60 Years can avail the benefits of Senior Citizen Saving Scheme.

A minimum of Rs. 1000 and a maximum of Rs. 15 Lakh can be invested in this plan. The new interest rate has been implemented in this scheme from 1st January 2023. At present this scheme is giving interest rate of 8 per cent. Interest is payable on the deposit amount on Quarterly basis.

Some of the Important points are as follow-

Tenure of the Scheme5 years, which can be extended by 3 more years
Interest rate8% p.a.
Frequency of computing interestQuarterly
Tax aspectsTax Benefit under Section 80C
Investment to be in multiples ofRs.1,000
Maximum investment limitRs.15 lakh
Maximum PensionApprox. Rs. 10,000

3. Atal Pension Scheme

Anyone between the age of 18 to 40 years can invest in this retirement plan. In Atal Pension Scheme, a person has to invest a small amount every month till age of 60. After the age of 60 years, investor get benefit of monthly pension ranging from Rs. 1000 to Rs 5000.

Tenure of the SchemeInvestment of minimum 20 years are required.
Interest rate7.6% p.a.
Frequency of computing interestQuarterly
Tax aspectsTax Benefit under Section 80C
Investment to be in multiples ofRs.1,000
Maximum investment limitInvestment of minimum 20 years are required.
Minimum eligible age18-40 Years
Maximum Pension Up to Rs. 5,000

4. National Pension System (NPS)

NPS is a good option to get a monthly pension. Most of the amount invested in this scheme is invested in market and return is linked to market performance. So on average investor gets 10% return on there investment.

Tenure of the SchemeCan invest till age of 65 Years
Interest rate9% to 12% p.a.
Frequency of computing interestQuarterly
Tax aspectsTax Benefit under Section 80C
Investment to be in multiples ofRs.250
Maximum investment limitNo cap on investment amount
Minimum eligible age18-65 Years
Maximum PensionDepend upon investment
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5. Public Provident Fund (PPF)

The Public Provident Fund (PPF) scheme is a very popular long-term savings scheme in India because of its combination of tax savings, returns, and safety. The main objective of the scheme is to help individuals make small savings and provide returns on the savings. The PPF scheme offers an attractive rate of interest and no tax is required to be paid on the returns that are generated from the interest rates.

Tenure of the Scheme15 Years ( Can be renewed in block of 5 Years)
Interest rate7.1% p.a.
Frequency of computing interestQuarterly
Tax aspectsTax Benefit under Section 80C
Investment to be in multiples ofRs.500,
Maximum investment limitMaximum 1.5 Lakh p.a
Minimum eligible age18-65 Years
Maximum PensionDepend upon investment

Also read 7 Personal finances to watch out for in 2023

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OPD Insurance- Why it is important in your medical Insurance Policy?


OPD insurance, or “outpatient department insurance,” is a type of health insurance that covers the costs of medical treatments and procedures that do not require an overnight stay in a hospital. This can include doctor’s appointments, diagnostic tests, laboratory work, and certain types of therapy or rehabilitation.

OPD Insurance

General health insurance, also known as comprehensive health insurance, typically covers a wide range of medical expenses such as hospitalization, surgeries, doctor’s appointments, diagnostic tests, prescription drugs, rehabilitation, preventive care, maternity coverage, coverage for pre-existing conditions and coverage for mental health services. However, OPD insurance is not always included in general health insurance plans.

“What will be the case if you have to do follow up visit to doctors and it is frequent visit. What if these follow up visits are not covered under your medical insurance policy. It will put a extra burden on your budget and here is where OPD insurance become important.”

Some general health insurance plans may include OPD coverage as part of the plan, but it is not always the case. Some insurance companies may offer OPD insurance as an add-on to a general health insurance plan, while others may offer it as a stand-alone policy. It is important to check the coverage details of any insurance plan to determine if OPD coverage is included.

What is General Health Insurance

General health insurance, also known as comprehensive health insurance, typically covers a wide range of medical expenses. Here are some examples of what is typically covered under a general health insurance plan:

  1. Hospitalization: This includes the cost of staying in a hospital for medical treatment, including room, board, and nursing care.
  2. Surgeries: This includes the cost of surgical procedures, such as elective surgeries, emergency surgeries, and major surgeries.
  3. Doctor’s appointments: This includes the cost of visiting a doctor for a regular check-up, or for treatment of an illness or injury.
  4. Diagnostic tests: This includes the cost of laboratory tests, X-rays, MRIs, CT scans, and other types of diagnostic tests.
  5. Prescription drugs: This includes the cost of medication prescribed by a doctor.
  6. Rehabilitation: This includes the cost of physical therapy, occupational therapy, and speech therapy.
  7. Preventive care: This includes the cost of preventive screenings, such as mammograms and colonoscopies.
  8. Maternity coverage: This includes the cost of prenatal care, delivery, and postnatal care.
  9. Coverage for pre-existing conditions: This includes coverage for medical conditions that existed prior to enrolling in the insurance plan.
  10. Coverage for mental health services: This includes the cost of seeing a therapist, counselor, or psychiatrist, and the cost of medication used to treat mental health conditions.

It is important to note that coverage can vary depending on the insurance plan and the insurance company. It is always a good idea to check the coverage details before buying a plan.

What is OPD Insurance

OPD insurance, also known as “outpatient department insurance,” is a type of health insurance that covers the costs of medical treatments and procedures that do not require an overnight stay in a hospital. This can include doctor’s appointments, diagnostic tests, laboratory work, and certain types of therapy or rehabilitation.

OPD insurance is typically offered as an add-on to a basic health insurance plan, although some insurance companies do offer stand-alone OPD insurance policies. It is important to check the coverage details of any OPD insurance plan, as the level of coverage can vary between plans.

In summary, OPD insurance is a type of health insurance that covers the costs of medical treatments and procedures that do not require an overnight stay in a hospital. It can help individuals save money on healthcare expenses and provide peace of mind, as well as access to a wider range of healthcare providers. However, it is important to check the coverage details before buying any plan.

Benefits of OPD Insurance

OPD insurance is important for several reasons. Here are a few key benefits of having OPD coverage:

  1. Cost savings: Without OPD insurance, individuals may have to pay out-of-pocket for medical treatments and procedures that do not require an overnight stay in a hospital. This can add up quickly, especially for individuals who require frequent medical care. OPD insurance can help cover the costs of these treatments and procedures, reducing the financial burden on individuals.
  2. Access to healthcare: OPD insurance can provide access to a wider range of healthcare providers. Many insurance plans have networks of preferred providers, and having OPD coverage can give individuals access to these providers.
  3. Peace of mind: Knowing that you are covered for certain types of medical treatment can provide peace of mind. This can be especially important for individuals who are at risk for certain health conditions or who have a history of chronic illnesses.
  4. Flexibility: OPD insurance policies are typically offered as an add-on to a basic health insurance plan, which gives individuals the flexibility to choose the coverage that best suits their needs. Additionally, OPD insurance can be combined with other types of insurance such as critical illness insurance for better coverage.
  5. Cost containment: OPD insurance can help contain the overall healthcare costs of a family by covering the costs of minor illnesses and treatments which may not require hospitalization.
  6. OPD insurance become integral part of your insurance policy if your policy covers an old age person, kids or a person ailing prolonged disease who require frequent visits to the doctors for regular check-ups and consultations.

In summary, OPD insurance is an important type of health insurance that can help individuals save money on healthcare expenses, provide access to a wider range of healthcare providers, and provide peace of mind. It can also be combined with other types of insurance to provide comprehensive coverage and also help contain overall healthcare costs.

What is Included in OPD Insurance Cover in Health Insurance

Here are the coverage details of OPD cover in medical insurance.

  1. Doctor consultations
  2. Diagnostic tests
  3. Pharmacy expenses
  4. OPD treatment

What is Excluded in OPD Insurance Cover in Health Insurance

Here are the exclusions of OPD cover in medical insurance.

  1. Facilities or services availed for rejuvenation, pleasure, etc.
  2. Treatments for beautification, purification, detoxification, panchakarma, etc.
  3. Cost of spectacles, lenses, implants, hearing aids, prosthetic devices, braces, etc.
  4. OPD treatment outside India.
  5. Routine examinations or preventive health check-ups.
  6. Vaccination including inoculation and immunisations except in case of post-bite treatment such as a dog bite.
  7. Investigational treatments or experiments.
  8. Sterility, infertility, and other related conditions.
  9. Complications arising out of pregnancy, miscarriage, etc.
  10. Dentures, dental treatment, and surgery of any kind.

Why Should You Get a Health Insurance with an OPD Cover?

Here are the reasons why you should consider buying medical insurance with an OPD cover.

  1. A recent survey by Practo revealed that visits to the doctor or clinic have increased from 2.7 times in 2017 to 3.2 times in 2018.
  2. OPD expenses in India account for nearly 62% of the total medical care expenses compared to In-patient Department (IPD) expenses.

Health Insurance provider who provides OPD insurance

InsurerPolicy
Bajaj AllianzTax Gain Health Insurance Plan with OPD Cover
Niva BupaGoActive Health Insurance Plan
Star Health InsuranceOutpatient Care Insurance Policy
Digit Health InsuranceDigit Health Insurance with OPD Cover
Aditya Birla Health InsuranceActiv Health Enhanced Platinum Plan

Frequently Asked Questions:

Here are some of the most commonly asked questions about health insurance plans with OPD cover.

Ques- Can I avail of tax deductions on health insurance plans with OPD cover?

Ans- Yes, you can claim tax benefits on health plans with OPD cover under Section 80D of the Income Tax Act.

Ques- When are the instances when I can utilise my OPD cover?

Ans- You can use the OPD cover in the health insurance plan for minor surgeries or treatments that do not require hospitalisation.

Ques- Can I buy an insurance plan that covers only OPD treatment?

Ans- It depends on the insurance company and the plans they offer. You need to review the plans before you buy the plan that provides coverage only for OPD treatment.

Ques- How do I buy health insurance with OPD cover?

Ans- OPD cover in health insurance is offered as an add-on cover at an additional premium. However, it may differ between insurance companies. For example, some plans are bundled with OPD cover, while other plans offer OPD cover as an add-on. Therefore, it is prudent to check the coverage details so that you can make an informed decision.

Insurance Portability- Meaning, Advantages & Disadvantages


Insurance portability is a great feature that allows policyholder to switch between insurers without having to start all over again.

Life insurance Portability- Image Credit Istock

Reasons for Changing Insurance Provider

There are a variety of reasons why people may choose to change their insurance provider. Some of the most common reasons include:

  1. Cost: One of the most common reasons for switching insurance providers is cost. Many people are looking for ways to save money on their insurance premiums, and changing providers can be a great way to do that. By shopping around and comparing different providers, policyholders can often find a more affordable option that still meets their needs.
  2. Coverage: Another reason why people change insurance providers is that they are not satisfied with the coverage offered by their current provider. Policyholders may find that their current provider does not offer the coverage they need, or that their policy has too many exclusions or limitations. In these cases, switching providers can be a way to find a policy that more closely meets their needs.
  3. Service: Policyholders may also switch providers because they are not satisfied with the service they are receiving from their current provider. This can include issues with customer service, claims processing, or the handling of disputes. If a policyholder feels that their current provider is not meeting their needs in these areas, they may choose to switch to a provider that they believe will be more responsive and helpful.
  4. Group insurance: Employees may switch insurance providers because their employer has changed insurance providers or they have changed jobs. In such cases, employees can take advantage of the portability feature offered by group insurance policies and switch to the new insurance provider without losing their coverage.

These are the same reason where policyholder can use benefit of portability feature provided by many insurance provider.

What is Portability?

Portability in insurance refers to the ability of policyholders to transfer their insurance coverage from one provider to another without losing any of the benefits or coverage that they have accumulated. This feature is particularly useful for individuals who are looking to change insurance providers but do not want to lose the coverage that they have built up over time.

Portability in insurance is not just limited to individual policyholders but it also applies to group insurance policies as well. Group insurance policies are typically offered by employers to their employees and portability feature enables employees to switch employer without losing their insurance coverage.

So we can say that, portability in insurance is an important feature that allows policyholders to switch insurance providers without losing any of the coverage that they have accumulated. It provides flexibility and choice to policyholders and allows them to shop around for the best coverage at the best price. It also enables employees to switch employer without losing their insurance coverage.

Benefits of Portability

There are many benefits associated with portability in insurance.

  1. One of the main benefits of portability in insurance is that it allows policyholders to shop around for the best coverage at the best price without having to start over from scratch. For example, if a policyholder has built up a high level of coverage with their current provider, they can take that coverage with them when they switch to a new provider. This can save them a significant amount of money in the long run, as they will not have to pay for coverage that they have already accumulated.
  2. Another benefit of portability in insurance is that it allows policyholders to switch providers if they are not satisfied with the service they are receiving. For example, if a policyholder is not happy with the customer service they are receiving from their current provider, they can switch to a new provider without losing any of their coverage. This can be a valuable option for individuals who are not satisfied with the service they are receiving from their current provider.

Insurance Portability- Eligibility and Conditions

  1. Portability is allowed under all individual indemnity health insurance policies issued by General Insurers and Health Insurers including family floater policies.
  2. Every individual policyholder (including members under family floater policy) covered under an indemnity based individual health insurance policy is provided with an option of migration at the explicit option exercised by the policyholder.
  3. Every individual member, including family members covered under an indemnity based group health insurance policy is provided with option of migration at the time of exit from group or in the event of modification of the group policy (including the revision in the premium rates) or withdrawal of the group policy.
  4. Migration is applicable to the extent of the sum insured under the previous policy and the cumulative bonus, if any, acquired from the previous policies.
  5. Only the unexpired/residual waiting period not exceeding the applicable waiting period of the previous policy with respect to pre-existing diseases is applicable for migration under the new policy.
  6. If the policyholder is continuously covered in the previous policy without any break for a period of four years or more, migration will be allowed without subjecting the policyholder to any underwriting to the extent of the sum insured and the benefits available in the previous policy.

Also Read- EPF- Employee Provident Fund Explained

Insurance Portability- Timeline

  1. A policy holder desirous of migrating his/her policy should apply to the insurance company to migrate the policy along with all members of the family, if any, a tleast 30 days before the premium renewal date of his/her existing policy.
  2. If the insurer is willing to consider even less than 30 days period, then the insurer have to consider the application.
  3. The insurance company must convey its decision to the policy holder within 15 days as per Regulation 8(6) of IRDAI (Protection of Policy holders’ interests) Regulations 2017.

Insurance Portability- Steps to Apply

To port your health insurance, you should follow the steps mentioned below – 

  • Step 1: Request portability from the new insurance provider at least 45 days before the current policy is set to expire. 
  • Step 2: When the request for portability is received, the new insurer will offer a proposal, a portability form, and information on the various health insurance options. 
  • Step 3: Choose a health plan that meets your needs, then send the new insurer the completed proposal and portability documents. 
  • Step 4: In order to verify certain information, such as the applicant’s claim history, medical records, etc., the new insurance firm will contact the prior insurer after receiving the forms with the relevant information or visit the IRDAI website. 
  • Step 5: Within seven working days, the current insurer must provide all necessary information via the IRDAI’s common data-sharing system. The decision to approve the porting request may be delayed by the new insurer in the event that this information is shared later than expected. 
  • Step 6: Within 15 days of receiving all the information, the new insurer will determine whether to accept or reject the insurance. They will be forced to accept the portability application if a decision is not made within this time frame. 

Insurance Portability- Document Required

The following documents are required to port health insurance – 

  1. From previous insurer – The most recent renewal notice specifically mentions coverage continuity, if any claims have been made, documents such as a discharge summary and an investigation report, among others, Certificates of prior policies, and Policyholders’ self-declaration in no-claim situations. 
  2. From new insurer – duly filled portability form and duly filled proposal form. 

Insurance Portability- Reason of Rejection

If a portability application does not adhere to the terms, conditions, and policies of the insurance provider, it may be rejected by IRDAI. Applications for portability may also be denied for the following reasons: 

  • Poor claim history, for example, if several recent health claims have been made 
  • Insufficient information 
  • There are significant differences between the new policy’s inclusions, exclusions, and other aspects and the current policy. 
  • delayed submission of documents 

FAQ- Insurance Portability

Ques- Which policies are eligible for health portability?

Ans- Portability is applicable to all indemnity-based individual health insurance policies offered by general insurers and health insurers, including family floater policies. Additionally, indemnity-based group health insurance plans that banks offer to account holders permit the portability of benefits.

Ques- When can a policyholder use the portability option?

Ans- Only during the policy renewal process can a policyholder port their coverage. 

Ques- Is there an age limit at which a policyholder can request portability?

Ans- All holders of health insurance policies are eligible to use the portability option. 

Ques- When can health insurance coverage be ported?

Ans- A health insurance provider is required by the IRDAI to acknowledge a portability request within three days of receiving it. However, after obtaining all required paperwork, companies have 15 days to accept or decline a transfer request. They will have to agree to your request for portability if there is a delay. 

Ques- Can porting of health insurance be done online?

Ans- Yes, by going to the website of the new health insurance provider, you can move a health insurance policy there. 

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EPF- Employee Provident Fund Explained


Employee Provident FundEPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Act, 1952. The employee and employer each contribute 12% of the employee’s basic salary and dearness allowance towards EPF. Currently, the rate of interest on EPF deposits is 8.10% p.a.

EPF- Employee Provident Fund

EPFO (Employee Provident Fund Organization)

The Employees’ Provident Fund Organization (EPFO) is a non-constitutional body that promotes employees to save funds for retirement. The organization is governed by the Ministry of Labour and Employment, Government of India and was launched in 1951.

The schemes offered by the organization cover Indian workers and international workers (from countries with whom the EPFO has signed bilateral agreements).

EPFOObjectives

  • To ensure every employee has only one EPF account.
  • Compliance must be facilitated easily.
  • Make sure organizations follow all the rules and regulations set up by the EPFO on a regular basis.
  • To ensure that online services are reliable and to make improvements in their facilities.
  • For all member accounts to be accessed online easily.
  • Claim settlements to be reduced from 20 days to 3 days.
  • Promotion and encouragement of voluntary compliance.

Universal Account Number (UAN)

All subscribers of EPF can access their PF accounts online and perform functions like withdrawal and checking EPF balance. The Universal Account Number (UAN) makes it convenient to login to the EPFO member portal.

The UAN is a 12-digit number allotted to each member by EPFO. The UAN of an employee remains the same even after he/she switches jobs. In the event of a job change, the member ID changes, and the new ID will be linked to the UAN. However, employees must activate their UAN in order to avail the services online.

You can get your UAN through your employer. In case you are unable to do so, you can easily login to the UAN portal (https://unifiedportal-mem.epfindia.gov.in/memberinterface/) with your member ID and find the UAN.

Schemes Offered Under the EPFO

  • Employees’ Provident Funds Scheme 1952 (EPF)
  • Employees’ Pension Scheme 1995 (EPS)
  • Employees’ Deposit Linked Insurance Scheme 1976 (EDLI)

EPFO- Services Offered

Some of the services offered by the EPFO are mentioned below:

  • Helpdesk for Inoperative Accounts – In February 2015, the EPFO set up the Inoperative Accounts Online Helpdesk to help employees track dormant and old inoperative accounts that do not accumulate any interest. Employees can track these accounts, and either withdraw the funds or transfer them to the current Member ID. Basic details must be provided by the employees about their previous employment to track inoperative accounts.
  • Online withdrawal of EPF – The EPF withdrawal amount can be easily done online with the help of the UAN. Employees who have been unemployed for more than 2 months are eligible to withdraw their EPF amount. However, the Aadhaar and bank details of the employee must be linked with the UAN.
  • International workers can generate a Certificate of Coverage – EPF members that are working in countries who have Social Security Agreements with India can generate a Certificate of Coverage (CoC) with the help of an online centralised software that the EPFO has launched.
  • Monthly returns for exempted establishments – With the help of the IT tool that the EPFO has launched, exempted establishments can file their monthly returns online without any trouble.
  • UMANG App – The EPFO has launched the Unified Mobile Application for New-age Governance (UMANG) for EPF members. Employees can use their UAN and password to avail the services of the UMANG app. Various services such as viewing of EPF passbook, updating profile details, etc. are available on the UMANG app.
  • Online transfer of EPF – EPF Transfer amount from the employee’s previous Member ID to the current one can be done online with the help of the UAN. The process is hassle-free, paperless, and simple.
  • Establishments can register online – The Online Registration of Establishments (OLRE) can be completed on the EPFO portal. Employees are also benefitting due to the online presence of the PF code allotment letter.
  • Online payments of PF – It is compulsory for all organisations to make the PF payments online. Currently, Kotak Mahindra Bank, Axis Bank, ICICI Bank, HDFC Bank, Bank of Baroda, Union Bank of India, Allahabad Bank, Indian Bank, Punjab National Bank (PNB), and State Bank of India (SBI) are the 10 banks that have agreements with the EPFO for the collection of dues.
  • Missed call and SMS service – Members who have activated their UAN can access their PF balance, previous contribution, the status of KYC, etc., by sending an SMS (Format: EPFOHO UAN) to 7738299899 or by giving a missed call to 011-22901406. Employers will also receive an SMS for non-payment of EPF.
  • Claim status and passbook – The EPFO members will be able to check the status of their claims as well as view and download the EPF passbook with the help of the UAN.
  • Grievances – In case of any issues regarding the settlement of pension, transfer of PF, withdrawal of PF, etc., members can raise a complaint online. Grievance redressals are a top priority for the EPFO, and they are dealt with swiftly. 80% of the complaints are solved within 7 days and 97% of them are solved within 15 days. Due to constant monitoring of the EPF grievances, complaints have come down from 20,000 to 2,000-3,000 in a day.

Employee Provident Fund Contribution

The contribution is divided into the below mentioned categories:

CategoryPercentage of contribution (%)
Employees Provident Fund3.67
Employees’ Pension Scheme (EPS)8.33
Employee’s Deposit Link Insurance Scheme (EDLIS)0.50
EPF Admin Charges1.10
EDLIS Admin Charges0.01

It is mandatory for the employee and the employer to make a EPF contribution. Each make a 12% contribution of the employees’ dearness allowance and basic salary towards EPF. Given below are the details of the employees’ and employers’ contribution towards EPF.

  • Employee’s contribution towards EPF – 12% of the employee’s salary is deducted by the employer on a monthly basis for contribution towards EPF. The entire contribution goes towards the EPF account.
  • Employer’s contribution towards EPF – The employer also contributes 12% of the employee’s salary towards EPF.

Employee Provident Fund Benefits

  • It helps in saving money for the long run.
  • There is no requirement to make a single, lump-sum investment. Deductions are made on a monthly basis from the employee’s salary and it helps in saving a huge amount of money over a long period.
  • It can help an employee financially during an emergency.
  • It helps in saving money at the time of retirement and helps an individual maintain a good lifestyle.

Employee Provident Fund EPF Interest Rate

Currently, PF interest rate is 8.10%. It is possible to easily calculate the interest amount accumulated in the EPF account at the end of a financial year. This amount is added to the employer and employee contributions at the end of the year to find the total balance in the account.

Employee Provident FundEligibility

The eligibility criteria in order to join the EPF scheme are mentioned below:

  • It is mandatory for salaried employees with an income of less than Rs.15,000 per month to register for an EPF account.
  • As per law, it is mandatory for organisations to register for the EPF scheme if they have more than 20 employees working for them.
  • Organisations with less than 20 employees can also join the EPF scheme on a voluntary basis.
  • Employees who earn more than Rs.15,000 can also register for an EPF account; however, they must get approval from the Assistant PF Commissioner.
  • The whole of India (except the states of Jammu and Kashmir) can benefit from the provisions in the EPF scheme.

How to Check EPF Balance?

There are four methods in which you can check your EPF balance:

  • Using the EPFO portal – The process of checking your EPF balance through the EPFO member portal is easy. You should do EPF login using your UAN and password. After logging in, you will be able to find the EPF balance under the member ID.
  • Using the UMANG app – You can download the Unified Mobile Application for New-age Governance (UMANG) app and perform EPF balance check on mobile phone. You can also raise and track claims through this app.
  • Using a missed call service – It is possible to check your EPF balance by giving a missed call to the number, 011-22901406, from your registered phone number.
  • Using an SMS service – If your UAN is activated, you can send an SMS to 7738299899 for EPF balance check.

Types of EPF Forms

The table below gives the list of different EPF forms and their uses:

Type of FormUse of the form
Form 31It is also known as the PF Advance Form. It can be used for obtaining withdrawals, loans, and advances from the EPF account.
Form 10DThis form is used for availing a monthly pension.
Form 10CThis form is used to claim benefits under the EPF scheme. Form 10C is used to withdraw the funds that the employer contributes towards EPS.
Form 13This form is used to transfer your PF amount from the previous job to your current one. This helps in keeping all the PF money under one account.
Form 19This form is used to claim the final settlement of EPF account.
Form 20Family members can use this form to withdraw the PF amount in case the account holder passes away.
Form 51FThis form can be used by a nominee in order to claim the benefits of the Employees’ Deposit Linked Insurance

Also Read Securing the Future of the Girl Child: A Comprehensive Guide to Sukanya Samriddhi Yojana

Employee Provident Fund Organization- Portal Login

The first step in logging in to the EPFO portal is the activation of UAN. This can be easily done on the EPFO portal.

After UAN Login, the following activities can be done:

  • You can download the UAN Card and passbook
  • View the status of PF linking
  • View member IDs
  • View the status of PF transfer claim
  • Edit personal details on the EPFO portal
  • Update KYC information

An employee can login to the EPF member portal using his/her UAN and password. Employers can also login to the website using the permanent login ID and password.

Employee Provident Fund – Joint Declaration Form

An EPF joint declaration form is a form signed by you, as an employee and your employer and the EPF joint declaration form is secure for correction of date of birth in your PF account, date of joining, name in UAN, your father’s name, and also the date of exit.

The details on the EPF joint declaration are as follows:

  • Father’s Name or Husbands Name
  • Name of Employee
  • Date of Birth of Employee
  • Provident Fund Account Number
  • Date of Leaving in Company
  • Joining Date in Company
  • Gender of the Employee

This is the format in which you can view and download the EPF joint declaration:

  • Joint Declaration by the Member or Employer
  • Date of Submission
  • To the Regional PF commissioner
  • Mention your local PF commissioner address
  • The Subject is the same as your Joint Declaration by Member and the Employer
  • Enter your name and the company name
  • Write your Establishment Code and also the name of the company
  • Your UAN number
  • PF Number

Documents you Have to Attach with PF joint declaration

  • Document proof with the reason for exit
  • For the change in date of birth, you have to submit your school certificate, mark sheet Birth certificate or passport
  • For name change, attach documents which have your name on it
  • In case of Date of Joining or Date of Leaving, you have to submit your joining letter or leaving letter
  • All documents that are verified must be attached with the EPF joint declaration form and signed.

Employee Provident Fund Organization- Employee Login

The process for an employee to login to his/her EPFO portal is simple. First, the employee will need to visit https://www.epfindia.gov.in/site_en/index.php and login using the UAN and password. It is possible to claim PF, update KYC details, check PF balance, and transfer PF amount on the portal.

Employee Provident Fund Organization- Employer Login

An employer should create a username and password at the first login to the EPFO employer portal (https://www.epfindia.gov.in/site_en/For_Employers.php). Once the employer logs in to the portal, it is possible to approve the KYC details of employees.

Employee Provident Fund-Passbook

You can use the EPFO passbook facility to check your EPF account statements and print/download the statements. All members who have registered their UAN on the EPFO portal can use the EPF passbook.

The EPFO passbook has details such as the name of the employee, establishment ID, EPF scheme details, name of the EPF office, etc.

EPFO account holders can update exit date online after a job change

The EPFO has now enabled a feature on the official website that allows users to update their ”date of exit”, after changing jobs, online. This facility was not available to employees previously. It was only employers who were able to update their exit dates online.

Steps to update your date of exit online

  • Visit the EPFO‘s official website
  • Log into your account using your Universal Account Number (UAN) and password
  • Navigate to the section called ”Manage
  • Click on ”Mark Exit
  • This will give you a dropdown menu on ”Select Employment” from where you can select your PF account number
  • Fill in your date of exit and reason for exit
  • Click on ”Request OTP”. The OTP will be sent to the mobile number linked to your Aadhaar card
  • Enter the OTP
  • Select the checkbox
  • Click on ”Update” and ”Ok
  • You will receive a message confirming that the date of exit has been successfully updated
  • Now navigate to the ”View” section and under that, ”Service History
  • You can now see the date of joining and exit from both your EPS and EPF accounts

Note that you can mark your date of exit only after 2 months of leaving your place of employment.

Importance of updating the exit date

Updating your exit date is important for claims submissions and settlements. If your exit date is not updated or is mentioned inaccurately, then your employment will not be marked continuous and you would have to pay tax on the interest that is earned during the intervening period.

Employee Provident Fund – Online Withdrawal

It is possible to partially withdraw from the EPF account for the purchase of a house, wedding expenses, or for medical expenses. The amount of money that can be withdrawn will based on the reasons for the withdrawal. It should be noted that there is a lock-in period for partial withdrawal and this also varies based on the withdrawal purpose.

The entire PF amount can be withdrawn under several circumstances. Some of these include the attainment of retirement age, resignation due to permanent total mental/bodily incapacity, permanent relocation to other countries, death of the member, etc.

Given below are some of the reasons why EPF should not be withdrawn before 5 years of service:

  • Section 80C benefits cannot be availed: In case individuals have been claiming benefits under Section 80C of the Income Tax Act and they withdraw their PF amount completely, the interest that has been earned on the employee’s contribution must be taxed.
  • The amount will be taxed: In case any PF withdrawal is done within 5 years of service, the amount that is withdrawn is added to the taxable income. In case the amount that is withdrawn is more than Rs.50,000 and the withdrawal is done within 5 years, there is a 10% tax cut on the amount. However, on submitting Form 15G and 15H with the Income Tax (IT) Department, individuals are exempted from paying this amount.

EPF withdrawal without employer signature

On realizing that getting the approval or attestation of an employer to facilitate a PF withdrawal has caused quite a bit of trouble for many employees, the EPFO has circumvented the process and now employees can make withdrawals without the attestation of their employers.

The introduction of the UAN in the EPF had brought about this change, as now, employees just have to link their Aadhaar card to their UAN to make a withdrawal. Having said that, now making a withdrawal without the signature of the employer has two ways – with or without an Aadhaar card.

With an Aadhaar card:

  • Now just by linking the employee’s Aadhaar card to his/her UAN, the whole process of getting the signature of one’s employer has been skipped for good.
  • To facilitate a smooth process, employees should make sure that their Aadhaar card details and bank details are embedded in the EPFO‘s member portal.
  • The employer should have verified both – the Aadhaar card and the bank details.
  • The employee has to make sure that his/her UAN has been activated before starting the process of making a withdrawal.
  • Once you have met these conditions, download Form 19- UAN (for making PF withdrawals) and Form 10C- UAN (for making withdrawals from one’s pension scheme).
  • Now, enter your name, address, registered mobile number, PAN card number, and the employee’s reason for leaving and date of joining. The employee should make sure that the details match that on one’s Aadhaar card and bank details. Any discrepancies could lead to a rejection of the application or a delay.
  • Next, the employee should attach a cancelled cheque to the form and submit it to the regional EPF office.

Making a withdrawal without an Aadhaar Card:

  • This process could be a little of an inconvenience, but if it is your last resort, then follow the process mentioned below.
  • The employee should download the Form 19, Form 31 or Form 10C from the EPFO‘s member portal, depending on where the withdrawal is going to made from.
  • Once filled, the form has to be attested by an authorised signatory, such as a Gazetted officer, manager of a bank, magistrate, etc. While doing so, the authorized signatory has to sign every page of the form.
  • Since you’ll have to state a reason for not getting the employer’s signature, state “Non-cooperation”.
  • Next, the employer will have to attach an indemnity bond with a 100 Rupee stamp paper, attach one’s payslips, employment ID, appointment letter and Form 19.
  • As a proof of address and identity, submit your regular KYC documents along with the attested form and cancelled cheque and the other papers of verification at the regional EPF office.

EPF Claim Status

Once a member has decided to withdraw his/her EPF funds, they can login to the EPFO portal and submit an online request for the same. The member can also check the status of the EPFO claim online through the EPFO portal.

Alternatively, employees can give a missed call to 011-22901406 from their registered mobile numbers to check claim status. The SMS facility or the UMANG app can also be used for checking EPFO claim status.

In order to check PF status, the following information should be provided by the member:

  • Employment details
  • Extension code, if required
  • Employer’s EPF regional office
  • Universal Account Number (UAN)

EPFO digital signature

To make the process of transfer claims easier and transparent, the EPFO has introduced the digital signature of employers. Now, employers can approve claims by using their digital signatures. When an employer shifts organisations, his transfer claim has to be attested by either his previous employer or the present one, and this is when the digital signature of the employer comes into play.

Back then, employers had to fill Form 13 and get it signed by their employers and then submit it to the regional EPF office. Now, the process has been simplified and can be done on the EPFO‘s member portal. To have a digital signature, employers have to apply for a digital certificate- which contains their personal details such as name, email ID, APNIC account name, public key and the country of the employer.

The digital certificate is issued by the Certifying authority and contains this identification key contains their required details that will be embedded in the EPFO‘s member portal.

EPFO grievance

For employees who want to register a grievance, the EPFO has a dedicated part of their member portal for employees to fill in a grievance registration form and file a complaint. Employees usually face grievances with regard to withdrawals, PF settlements, transfer of accounts, settlement of pension and so on. For those who are new to the EPFO’s member portal, follow the steps to register a EPF grievance:

  • Visit the EPFO grievance portal – https://epfigms.gov.in/
  • Click on ‘Register grievance‘ on the top bar.
  • Once you have done that, the grievance registration form will be displayed.
  • Now, fill in the registration form:
  • Enter your status (Employer, employee, EPS pensioner)
  • Enter your PF account number
  • Then, enter where your regional EPF office is located
  • Next, enter the name of your establishment and the address of your establishment
  • After that, enter your name, address, pincode, country, phone number and email ID.
  • The last part is to enter the grievance category – whether it is a transfer or withdrawal related issue, a pension settlement issue, etc. Select your grievance from the drop down bar.
  • Upload your grievance letter, enter the captcha and submit your grievance registration.

PF Toll Free Number

Individuals can contact regarding UAN and Know Your Customer (KYC) queries, call EPFO Toll Free No. 1800 118 005.

Procedure to withdraw funds from an EPF account that has been unclaimed

Withdrawal of the EPF amount from an unclaimed account is a very simple process. The procedure to withdraw funds from an unclaimed PF account is mentioned below:

  • The first step would be to visit the EPFO website and fill the required EPF claim form.
  • The form must be submitted at the post office.
  • The individual will receive the PF amount within 3-20 days.

EPFO KYC

Employees can update the KYC details on the e-Sewa portal of EPFO website.

  • After logging in to the UAN EPFO portal, they will have to access the manage KYC option and select the type of document they are updating on the portal, i.e., PAN, Aadhaar, Ration Card, etc.
  • The document number and name of the member (as per the document) will have to be updated.
  • The expiry date of some of the documents may have to be updated as well.
  • Once this is completed, the changes can be saved and submitted.
  • The employer will then assess the details submitted and provide an approval.
  • The employee then receives an SMS confirming the employer’s approval.

FAQs-Employee Provident Fund

Ques- Can an employer reduce the employer’s share of EPF contribution?

Ans- No, the employers cannot reduce their share of EPF contribution. Such a reduction is considered as a criminal offence.

Ques- How is EPF contribution calculated if the employee is paid on a daily or partly basis?

Ans- The contribution amount is calculated by the salary that is paid in a calendar month.

Ques- Is it possible for the employee to contribute towards EPF after he/she quits the job?

Ans- No, it is not possible for an employee to contribute towards EPF if he/she has left the service. The employee’s and employer’s contribution must match.

Ques- Whom should the employee approach if he/she is not given PF membership?

Ans- The employee must approach the employer first. If not provided by the employer, he/she can approach the Regional Provident Fund Commissioner of the PF office.

Ques- Is there any age restriction for an employee to become a member of EPF?

Ans- No, there is no age restriction for an employee to become a member of the Provident Fund. However, if the employee has already crossed the age of 58 years, he/she cannot become a member of the Pension Fund.

Ques- Can an apprentice become a member of the EPF?

Ans- No, an apprentice cannot become a member of the EPF, but he/she must enroll for EPF as soon as they stop being an apprentice.

Ques- Can an employee join EPF directly?

Ans- No, an employee cannot join EPF directly. He/she must work for an organisation that is covered under the EPF & MF Act, 1952.

Ques- Can an employee opt out of EPF?

Ans- No, an eligible member cannot opt out of EPF.

Ques- How is the PF amount recovered from defaulting members?

Ans- Prosecution under Section 14 of the EPF & MP Act, 1952, realisation of dues from debtors, attachments of bank accounts, attachment and sale of properties, and detention and arrest of the employer are some of the ways the PF amount is recovered from employers.

————————- END————————-

Securing the Future of the Girl Child: A Comprehensive Guide to Sukanya Samriddhi Yojana


Sukanya Samriddhi Yojana is a savings scheme launched by the Government of India in 2015, specifically targeted towards the girl child. The scheme aims to provide financial security to the girl child and promote girl child education and marriage.

Sukanya Samriddhi Yojana

The Sukanya Samriddhi Yojana scheme was launched on 22 January 2015 in Panipat, Haryana by Prime Minister Narendra Modi. The scheme is aimed at the betterment of the girl child in the country by abolishing sex determination, gender discrimination, protection of girls, and higher participation of girls in education and other fields. Here are some more details of Sukanya Samriddhi Yojana scheme including its interest rates, benefits, eligibility, and others.

Sukanya Samriddhi Yojana- Overview

The following are the important details of SSY scheme: 

Interest rate7.60% p.a.
Investment AmountMinimum – Rs.250, Maximum Rs.1.5 lakh p.a.
Maturity AmountDepends on the invested amount
Maturity Period21 years (or, till the girl is married after attaining the age of 18 years)

Benefits of Sukanya Samriddhi Yojana Scheme 

Sukanya Samriddhi Yojana (SSY) scheme was launched under the Beti Bachao Beti Padhao campaign with the main aim of securing the future of a girl child. The main benefits of the SSY scheme are mentioned below:

  • Interest rate was reduced from 8.4% to 7.6%
  • Tax benefits of up to Rs.1.5 lakh
  • Account can be transferred

Investments made towards the scheme can be used for the girl child’s marriage and education. An SSY account can be opened at banks and post offices. Under Section 80C of the Income Tax Act, 1961, tax benefits of up to Rs.1.5 lakh are provided for contributions made towards the scheme.

Sukanya Samriddhi Yojana Interest Rate

Currently, the interest rate of SSY scheme was reduced from 8.4% to 7.6% and it is compounded on a yearly basis. Interest is not payable once the duration of the scheme is completed or if the girl becomes a Non-resident Indian (NRI) or a non-citizen. The rate of interest is decided by the government and is determined on a quarterly basis.

The rate of interest that has been offered by the scheme is mentioned in the table below:

DurationRate of interest (%)
April 2020 onwards7.6
1 January 2019 – 31 March 20198.5
1 October 2018 – 31 December 20188.5
1 July 2018 – 30 September 20188.1
1 April 2018 – 30 June 20188.1
1 January 2018 – 31 March 20188.1
1 July 2017 – 31 December 20178.3
1 October 2016 – 31 December 20168.5
1 July 2016 – 30 September 20168.6
1 April 2016 – 30 June 20168.6
From 1 April 20159.2
From 1 April 20149.1

What happens if a lesser or excess amount is paid towards sukanya samriddhi yojana scheme?

  • Lesser amount: In case the minimum amount of Rs.500 is not paid in a financial year, the account will be considered as default. However, the account can be brought back to the active status by paying a fine of Rs.50.
  • Excess amount: No interest is generated for any deposit above Rs.1.5 lakh. The depositor can withdraw the excess amount any time.

Sukanya Samriddhi Yojana- Withdrawal Rules

  • Once the duration of the account has been completed, the entire amount that is available in the account including the interest can be withdrawn by the girl child. However, the below-mentioned documents must be submitted:
    • Application form for the withdrawal of the amount.
    • ID proof
    • Address proof
    • Citizenship documents
  • Withdrawal is allowed for the purposes of higher education if the girl child has attained the age of 18 years and has completed 10th standard. However, the money must be used for the fee or any other charges that are levied at the time of admission.
  • Documents such as admission to the university or college as well as the fee receipt must be submitted when applying for the withdrawal.
  • The maximum amount that can be withdrawn is 50% of the amount that is available in the previous year. The amount can be withdrawn in 5 instalments or in a lump sum.

Rules for premature withdrawal from SSY account

  • Once the girl attains the age of 18 years old and is getting married, SSY premature withdrawal is allowed. However, an application must be submitted at least one month before marriage and 3 months after the marriage to avail the benefit. Documents which determine the age of the girl must also be provided.
  • In case the girl child becomes a non-citizen or a non-resident, the account will be deemed as closed. Any such change in status must be informed by the guardian or the girl child within one month from the change in status.
  • In case the girl child passes away, the balance that is available in the account can be withdrawn by the guardian. However, the death certificate must be submitted.
  • If the account has been opened for 5 years and more, and the bank or post office feel that the continuation of the account is causing difficulties to the girl child, the guardian or girl child can opt for premature closure.
  • Permission to close the account will be permitted for other reasons as well, but the interest that is earned from the contributions will be the same as the interest rates that are provided by post offices.

Sukanya Samriddhi Yojana- Features

FeaturesDetails
Operation of the accountThe guardian or parents can operate the account until the girl reaches the age of 10 years.The girl must operate the account once she attains the age of 18 years.
Deposits made towards the accountThe minimum and maximum deposit that can be made in an account in a financial year is Rs.500 and Rs.1.5 lakh, respectively. The deposits can be made in multiples of 100.
Duration of the schemeDeposits towards the scheme should be made for a period of 15 years. However, the scheme matures after 21 years.
Transfer of accountAn SSY account can be transferred from post offices to banks and vice versa anywhere within India. No charges will be levied for the transfer of the account. However, a proof for change in residence must be produced. In case no proof is produced, a Rs.100 charge will be levied.
Mode of depositsDeposits towards the account can be made in the form of online transfer, demand draft, cheque, or cash.

Sukanya Samriddhi Yojana -Tax benefits

  • Under Section 80C of the Income Tax Act, 1961, tax benefits of up to Rs.1.5 lakh are provided for contributions made towards the scheme.
  • The interest amount that is generated is also exempt from tax.
  • Tax benefits are also provided for the maturity amount or the withdrawal amount.

Sukanya Samriddhi Yojana -Eligibility

  • The parent or legal guardian can open an SSY account on behalf of a girl child until she reaches the age of 10.
  • The girl child must be a resident Indian.
  • In a family, up to two accounts can be opened for two girls.
  • A third SSY account can be opened in case of twin girls.

Documents required to open an SSY account

  • SSY account opening form.
  • The birth certificate of the girl child must be submitted at the time of opening the account.
  • The ID proof and address proof of the depositor must be submitted at the time of opening the account.
  • A medical certificate has to be submitted in case multiple children are born under one order of birth.
  • Any other documents that are requested by the bank or post office.

How to open a Sukanya Samriddhi Account?

  • Visit the nearest branch of the bank or post office and fill the application form.
  • Once you have filled in the form, submit it along with all the necessary documents.
  • Pay the first deposit amount which can range between Rs.250 and Rs.1 lakh.
  • The application form and payment will be verified by the bank or the post office and if all the details are correct, an SSY account will be opened in your name.

How to fill an SSY account form for post office?

  • Visit the nearest post office and ask for an SSY account application form.
  • If you have a savings account with the post office, mention your account number.
  • Mention the post office branch details and postal address under ‘To The Postmaster’.
  • Post the photograph of the applicant.
  • Mention the name of the applicant and mention the option ‘Sukanya Samriddhi Yojana’.
  • Provide the relevant information under ‘Account Type’ and ‘Account Holder Type’.
  • Mention the amount you will deposit once the account is created.
  • Provide other relevant details such as gender, Aadhaar number, PAN, address, etc.
  • Sign page 1 to authorise all the information provided.
  • In Page 2 section (5), provide details if you wish to set standing instructions for the amount to be deposited to your account.
  • Cheque the square box next to SSA stating that no other SSY account has been created.
  • Provide the date and signature.
  • Provide nomination details.
  • Get two witnesses and get their signature in case the applicant is illiterate.
  • Provide the place, date and signature at the end of the nomination section.

How to pay for SSY online

  • Download the IPBB app on your mobile phone.
  • Transfer the money from your bank account to your IPBB account.
  • Log in to your IPBB account and choose ‘Sukanya Samriddhi Yojana’ under ‘DOP Products’.
  • Provide your SSY account number and customer ID.
  • Choose the amount you wish to pay and the duration of installment.
  • Once the payment routine has been set up, IPBB will notify you for the same.
  • Each time the money is transferred to your IPBB account, you will be notified of it.

Also Read Your Guide To Saving Tax: Effective Strategies To Maximize Your Refund

Banks that offer SSY account

The below-mentioned banks offer SSY scheme:

  • State Bank of India
  • United Bank of India
  • UCO Bank
  • Punjab National Bank
  • Oriental Bank of Commerce
  • Indian Bank
  • ICICI Bank
  • Corporation Bank
  • Canara Bank
  • Bank of India
  • Axis Bank
  • Allahabad Bank
  • Vijaya Bank
  • Union Bank of India
  • Syndicate Bank
  • Punjab & Sind Bank
  • Indian Overseas Bank
  • IDBI Bank
  • Dena Bank
  • Central Bank of India
  • Bank of Maharashtra
  • Bank of Baroda
  • Andhra Bank

How to transfer Sukanya Samriddhi account from Post Office to Bank? 

  • Visit the post office where the beneficiary holds an account with 
  • Inform about you transfer intent to the PO executive and submit the duly filled account transfer form 
  • Submit the passbook and KYC documents along with the transfer form 
  • The PO executive will discontinue the account upon the request of the beneficiary 
  • Visit the bank branch where the beneficiary wants their account to be transferred 
  • Submit all the required documents including the self-attested KYC documents 
  • New passbook will be provided after completion of the transfer request 

Note

  • For processing the transfer request, the girl child need not visit the PO branch. 
  • All the formalities can be completed by the guardian. 
  • The balance transfer of SSY account within or outside post offices or banks can be done free of cost. 
  • Transfer of Sukanya Samriddhi account can be done by providing proof of residence change of either of the beneficiary or their guardian. 
  • Change of Sukanya Samriddhi account on any other circumstances would require Rs.100 

Difference between SSY, PPF, and LIC 

Following are the differences between Sukanya Samriddhi Yojana, Public Provident Fund, and LIC Kanyadan Scheme: 

DetailsSukanya Samriddhi Scheme Public Provident FundLIC Kanyadan Scheme 
Policy or account opened by Girl child and maintained by guardian until she attains 18 years Any Indian citizen Father of girl child 
Eligibility Girl child of Indian origin below the age of 10 years Any Indian resident above 18 years Father of girl child with age of the father ranging between 18 years to 50 years 
Deposit amount Minimum: Rs.250 Maximum: Rs.1.5 lakh Minimum: Rs.500 Maximum: Rs.1.5 lakh Rs.40,000 onwards (approx.) 
Payment period 15 years 15 years 6 years, 10 years, 15 years, or 20 years (3 years less than policy term) 
Maturity period 21 years 15 years 13 to 25 years 
Interest rate 7.60% p.a. compounded yearly 7.10% p.a. compounded yearly Not specific 
Premature withdrawal On completing 18 years of the girl child On completing sixth years NA 
Tax benefit EEE benefit EEE benefit Tax exempted 
Loan facility NA After the third financial year and available only at the end of sixth financial year Loan can be availed after payment of three consecutive premiums if policy is still active. 
Maturity amount Depending upon the deposit amount Depends upon investment tenure and annual contribution Minimum: Rs.1 lakh Maximum: No limit 

FAQs -Sukanya Samriddhi Yojana

Ques- What is the relaxation in age limit given to girl child under the Sukanya Samriddhi Scheme?

Ans- Since, Sukanya Samriddhi scheme is a newly launched scheme, the government does not want few people to miss availing it due to reasons pertaining to age. Hence, any girl child who has attained the age of 10 years, exactly 1 year prior to the launch of scheme is also eligible to avail the scheme. So, any girl child born between 2nd December 2003 and 1st December 2004 is eligible to avail the Sukanya Samriddhi Scheme.

Ques- What is the taxation process of amount deposited under Sukanya Samriddhi Scheme?

Ans-There is a limit of Rs.1,50,000 which is exempt from taxation. Any amount above this will not fetch any income tax relief under section 80C of the Income Tax Act.

Ques-Who all can open Sukanya Samriddhi Account?

Ans- Any legal guardian or parent of a girl child can open Sukanya Samriddhi Account on behalf of their girl child.

Ques- Can a Non-Resident Indian avail the Sukanya Samriddhi Scheme?

Ans- As of now, there is no official communication regarding this issue and such NRIs are, for the time being, not covered under the Sukanya Samriddhi Scheme.

Ques- What happens in the case the girl child who is the beneficiary meets with an unexpected death?

Ans- In case of death of girl child, Sukanya Samriddhi Account is discontinued and closed and the proceeds are transferred to the guardian or parent of the girl child.

Ques- What happens in case of death of the depositor (guardian or parent of the girl child)?

Ans- In case of death of legal guardian or parent of girl child, the scheme is either closed and the proceeds are given to the family or girl child. Or, the scheme is continued with the deposited amount until the maturity period and the deposited amount continues to earn interest till the girl child attains the age of 21 years.

Ques- Can I convert my normal bank deposit account to Sukanya Samriddhi Account?

Ans- No. Currently, the feature of converting deposit account to Sukanya Samriddhi Account is not available. Sukanya Samriddhi is a special scheme aimed at uplifting the financial status of girls in the country and as such conversion of account is not allowed.

Ques- Can I withdraw money from my Sukanya Samriddhi Account, prematurely?

Ans- No. Only a partial withdrawal of up to 50% is allowed and that also when the girl child has attained at least the age of 18 years. This amount can be withdrawn only for higher education or wedding expense of the girl child.

Ques -Is the Sukanya Samriddhi scheme available throughout India?

Ans- Yes. Sukanya Samriddhi is a central government scheme and as such is present in each and every state of the country.

Ques-Is the Sukanya Samriddhi Scheme transferable as per location?

Ans- Yes. This scheme can be transferred from post office to bank or from one authorized bank to another. This is because there may be times when girl child may require to move due to study or other such situations.

Ques -Should I opt for Sukanya Samriddhi Scheme or s Recurring Deposit Scheme?

Ans- Sukanya Samriddhi looks like a recurring deposit scheme in the way it is structured but customers need to understand that unlike recurring deposits, this scheme is aimed specifically at offering financial strength to girl child in the country. Also, the rate of interest offered on this scheme is higher than that being offered by any bank on recurring deposit schemes.

Ques- Who can avail Sukanya Samriddhi Account?

Ans- Only parents or legal guardians of one or more girl child can avail the Sukanya Samriddhi Scheme in the name of their daughter.

Ques -How many Sukanya Samriddhi Accounts can I take for my daughter?

Ans- Only one Sukanya Samriddhi Account per girl child is allowed. So if you have two daughters, you can avail two separate account in both of their names and if you have one daughter then only one account can be availed.

Ques-Where can I open Sukanya Samriddhi Account for my daughter?

Ans- Sukanya Samriddhi account can be opened at any of your nearest post offices or at any branch of the authorized banks. These banks include almost all top and most popular public sector and private sector banks like State Bank of India, ICICI, HDFC, Punjab National Bank etc.

Ques- Has the interest rate on Sukanya Samriddhi Scheme changed since the time of launch?

Ans- At the time of launch, in the year 2014-15, the rate was 9.1% per annum which has been revised and increased to 9.2% per annum for the year 2015-16. However it reduced to 8.6% for FY 201.6-17

Ques- Do private sector banks also have the authority to open Sukanya Samriddhi Accounts for public?

Ans- Yes. A few major private sector banks like ICICI, HDFC etc. are authorized by the Finance Ministry to furnish and maintain Sukanya Samriddhi Scheme to customers.

Ques- Can both parents claim tax deduction for Sukanya Samriddhi deposit amount under section 80C?

Ans- No. Only one of the parents or guardians can claim tax rebate as per section 80C for the amount deposited under Sukanya Samriddhi.

Ques- Can a person avail both Sukanya Samriddhi and PPF schemes?

Ans- Yes. Sukanya Samriddhi is a scheme aimed at mainly at girl child while PPF or Personal Provident Fund is there to help people save for retirement or longer tenures. Both can be availed simultaneously since both have different financial objectives.

Ques- Is there any difference between Sukanya Samriddhi scheme offered by public bank and that offered by private bank?

Ans- No. There is absolutely no difference in features of benefits. Be it private banks or public banks or post offices, all authorized entities offer exactly the same features and benefits since the scheme is a central government driven scheme.

Ques – What is the minimum annual deposit amount required for Sukanya Samriddhi Scheme?

Ans- The minimum deposit amount required per annum is Rs.250.

Ques- What is the maximum annual deposit amount that can be deposited under the Sukanya Samriddhi Scheme?

Ans- The maximum amount that can be deposited under the Sukanya Samriddhi Scheme is Rs.1.5 lakh per annum.

Ques- Is there a last date to avail the Sukanya Samriddhi Scheme?

Ans- No. There is no last date to avail the scheme. However, standard tax filing dates will apply to this scheme too for purposes of taxation.

Ques- Will I be issued a passbook under Sukanya Samriddhi Yojana?

Ans- Yes. A passbook to track all your transactions will be furnished to all account holders of the Sukanya Samriddhi Scheme. The passbook will carry all personal details like address, name and age details of the account holder. This is a good reference for depositors in case a dispute arises or even in case of transfer of account from one place to another or from post office to an authorized bank.

Ques- Can SSY account be opened online?

Ans –No, there is no provision to open an SSY account online.

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Mutual Fund Fraud- How an Investor can protect itself from it

Mutual Fund Fraud– Mutual funds have gained popularity in recent years as a way for individual investors to access professionally managed portfolios of securities. With the growing popularity of mutual funds, there may be an increased risk of fraud as scammers may try to take advantage of uninformed investors. In this article we will be explaining about the safeguard an investor can do to protect itself from the fraud.

Securities & Exchange Board of India- Image courtesy Moneylife

Mutual Fund Fraud

Mutual fund fraud refers to any illegal or deceptive activity involving mutual funds, which are investment vehicles that pool money from multiple investors to purchase securities. Some common types of mutual fund fraud include:

  1. Ponzi schemes: A Ponzi scheme is a fraudulent investment operation where returns are paid to existing investors from funds contributed by new investors, rather than from profits earned.
  2. Misrepresentation: This can include lying about a mutual fund’s past performance, hiding or falsifying important information, or making unrealistic or misleading promises about future performance.
  3. Insider trading: This occurs when someone with inside knowledge about a mutual fund trades based on that information, which is illegal.
  4. Churning: Churning is when a broker excessively trades a customer’s account to generate commissions, regardless of the customer’s investment goals.
  5. Market manipulation: This occurs when someone artificially inflates or deflates the price of a mutual fund in order to gain an unfair advantage.

It is important for investors to be aware of these types of fraud and to take steps to protect themselves. This can include researching a mutual fund before investing, monitoring the fund’s performance, and reporting any suspicious activity to the appropriate authorities. It is also important to keep records of all correspondence with the mutual fund company and regulatory authorities, including the date, the name of the person with whom the complaint was filed, and the complaint reference number.

What mutual fund investors do in case of fraud

If a mutual fund investor suspects fraud, there are several steps they can take:

  1. Report the fraud: The first step is to report the fraud to the mutual fund company and the regulatory authorities, such as the Securities and Exchange Board of India (SEBI).
  2. File a complaint: If the mutual fund company fails to take action, the investor can file a complaint with SEBI or the Investor Grievance Cell of the mutual fund company.
  3. Gather evidence: Collect any relevant documents or evidence that support your claim of fraud. This could include transaction records, emails, or any other communication that may be relevant.
  4. Seek legal advice: If the fraud is serious and the investor has suffered significant financial losses, they may want to consider seeking legal advice to explore their options for recovery.
  5. Educate yourself about the fraud: investors should be aware of the common types of mutual fund fraud and how to protect themselves from it.

It’s important to note that, mutual fund companies are regulated by SEBI and have a fiduciary duty to act in the best interests of their investors. If investors suspect fraud, they should take steps to protect themselves and report it to the appropriate authorities as soon as possible.

How an investor can file complaint with SEBI

An investor can file a complaint with the Securities and Exchange Board of India (SEBI) by following these steps:

  1. Visit the SEBI website: Go to the SEBI website (www.sebi.gov.in) and click on the “Contact Us” link.
  2. Fill out the complaint form: On the “Contact Us” page, click on the “Complaints” link and fill out the online complaint form. The form will ask for personal and contact information, as well as details about the complaint.
  3. Submit the form: Once the form is filled out, click on the “Submit” button to send the complaint to SEBI.
  4. Keep a record of the complaint: SEBI will provide a complaint reference number, which the investor should keep for future reference.
  5. Follow up: SEBI will investigate the complaint and take appropriate action. Investor can also follow up on the status of the complaint by calling or emailing SEBI.
  6. Contact: To facilitate replies to various queries of the general public on matters relating to the securities market, SEBI has undertaken a new initiative and launched toll free helpline service number 1800 266 7575 or 1800 22 7575.

It’s advisable to keep a record of all correspondence, including the complaint reference number, the date of filing the complaint and the name of the person with whom you filed the complaint.

In addition to the above, SEBI also has a Investor Grievance Redressal mechanism, Investor can also file a complaint with the Investor Grievance Cell of the mutual fund company, which will be handled by the company’s Compliance Officer.

Also Read- 7 Personal finances to watch out for in 2023

What to do in case of investor grievance cell of mutual fund company is not responding

If an investor has filed a complaint with the Investor Grievance Cell of a mutual fund company and is not getting a response, they can take the following steps:

  1. Follow up with the company: The investor should contact the company again and inquire about the status of the complaint and the expected resolution time.
  2. Escalate the complaint: If the complaint is not resolved to the investor’s satisfaction within a reasonable time, they can escalate the complaint to a higher authority within the company, such as the compliance officer or fund manager.
  3. File a complaint with SEBI: If the mutual fund company still fails to resolve the complaint, the investor can file a complaint with the Securities and Exchange Board of India (SEBI). SEBI has the power to investigate and take action against companies that fail to resolve investor complaints.
  4. Seek legal advice: If the investor has suffered significant financial losses, they may want to consider seeking legal advice to explore their options for recovery.

It’s important to keep records of all correspondence with the mutual fund company and SEBI, including the date, the name of the person with whom the complaint was filed, and the complaint reference number. This will be helpful for future reference.

It’s also advisable for an investor to check SEBI’s website for any recent circulars or announcements regarding the mutual fund company in question, to stay updated with the any regulatory action taken by SEBI.

FAQ- Mutual Fund Fraud

Ques- What are types of Mutual Fund fraud?

Ans- Mutual fund fraud refers to any illegal or deceptive activity involving mutual funds, which are investment vehicles that pool money from multiple investors to purchase securities Some of mutual fund frauds are

  1. Ponzi schemes: A Ponzi scheme is a fraudulent investment operation where returns are paid to existing investors from funds contributed by new investors, rather than from profits earned.
  2. Misrepresentation: This can include lying about a mutual fund’s past performance, hiding or falsifying important information, or making unrealistic or misleading promises about future performance.
  3. Insider trading: This occurs when someone with inside knowledge about a mutual fund trades based on that information, which is illegal.
  4. Churning: Churning is when a broker excessively trades a customer’s account to generate commissions, regardless of the customer’s investment goals.
  5. Market manipulation: This occurs when someone artificially inflates or deflates the price of a mutual fund in order to gain an unfair advantage.

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Kisan Vikas Patra: Change in Interest Rate for KVP


Central Government has announced change in interest rate on Kisan Vikas Patra for 3rd quarter (2022-23) i.e. January-March (2023). Deposit made in Kisan Vikas Patra(KVP) will now gate interest at the compounded rate of 7.2% per annum from 7% per annum.

Kisan Vikas Patra

Kisan Vikas Patra- Overview

The Kisan Vikas Patra (KVP) is a savings scheme that was introduced by the Indian government in 1988 to encourage small farmers and rural citizens to save money for their future needs. The scheme is administered by the Department of Posts and is available through post offices across the country.

The KVP certificate is a government-backed investment option that offers a fixed rate of interest. The minimum investment amount is Rs. 1000 and there is no maximum limit. The investment can be made in multiples of Rs. 1000. The interest rate on KVP is currently 6.9% per annum, compounded annually but payable on maturity. The maturity period for KVP is 124 months (10 years 4 months).

Name of SchemeKisan Vikas Patra
Managed By Department of Post
Tenure of Investment124 Months
Interest Rate7.2% (January-March 2023)
Lock-in Period 2 Years 6 Months
Minimum Amount₹ 1000
Official Websitehttps://www.indiapost.gov.in/

Kisan Vikas Patra- Important Features

Kisan Vikas Patra is have many benefits which make it very attractive investment. Some of the features are-

Pro

  • Collateral Loan -KVP scheme can be used as collateral for loans. This means that individuals can use their KVP certificate as security to obtain a loan from banks and other financial institutions. This feature can be particularly beneficial for small farmers and rural citizens who may not have access to other forms of collateral.
  • Ease of Investment- Another advantage of the KVP scheme is that it is relatively easy to invest in. Investors can purchase a KVP certificate from any post office and the investment can be made in cash, by cheque, or by money order. Additionally, the scheme allows for easy transfer and encashment of the certificate.

Con

  • Low Interest Rate- One of the main disadvantages is that the interest rate on KVP is lower compared to other fixed income investments such as Public Provident Fund (PPF) and National Savings Certificate (NSC).
  • No Tax Benefit- The scheme is not eligible for tax benefits under Section 80C of the Income Tax Act, unlike PPF and NSC.

Kisan Vikas Patra- Through out Years

The Kisan Vikas Patra (KVP) scheme, introduced by the Indian government in 1988, has seen a steady growth over the years. The scheme is aimed at encouraging small farmers and rural citizens to save money for their future needs and has been administered by the Department of Posts through post offices across the country.

In the initial years, the scheme did not see much participation as people were not aware of it and also the interest rate offered was not very attractive. However, over the years, the government has made several changes to the scheme to make it more attractive to investors.

In 2014, the government reintroduced the scheme after a gap of several years and made changes such as reducing the maturity period from 120 months to 112 months, and increasing the interest rate from 8.5% to 8.7%. This led to an increase in the number of people investing in the scheme.

Data from the government shows that in the financial year 2014-15, the total investment in the KVP scheme was around Rs. 2,900 crores. This number increased to around Rs. 3,600 crores in 2015-16 and further to Rs. 4,600 crores in 2016-17.

The trend of growth continued in the subsequent years as well, with investment in the KVP scheme reaching Rs. 6,500 crores in 2017-18 and Rs. 8,500 crores in 2018-19.

Interest rate over years is as follows-

YearInterest Rate
Q3 FY 2022-237.0%
Q2 FY 2022-236.9%
Q1 FY 2022-236.9%
Q4 FY 2021-226.9%
Q3 FY 2021-226.9%
Q2 FY 2021-226.9%
Q1  FY 2021-226.9%
Q4 FY 2020-216.9%
Q3 FY 2020-216.9%
Q2 FY 2020-216.9%
Q1 FY 2020-216.9%
Q4 FY 2019-207.6%
Q2 FY 2019–207.6%
Q1 FY 2019–207.7%
Q4 FY 2018-197.7%
Q3 FY 2018-197.7%
Q2 FY 2018-197.3%
Q1 FY 2018-197.3%

The government has also introduced several new features to the scheme over the years to make it more accessible to the public. For example, in 2019, the government announced that the KVP scheme can be purchased online through the India Post Payments Bank (IPPB) app. This has helped to increase the reach of the scheme and made it more convenient for people to invest.

Kisan Vikas Patra- Types of Accounts

On applying to the Accounts Office in Form-1, the following different types of accounts can be opened under the scheme- 

  • Single Holder Type Account– This is single person
  • Joint A-Type Account– For two adults, and at the time of maturity both will be eligible for maturity amount or whom ever is alive till maturity.
  • Joint B Type Account –  For two adults, and only one person can withdraw maturity amount or whom ever is alive till time of maturity.

Kisan Vikas Patra- How to Apply

If you want to apply for Kisan Vikas Patra, you need to follow below mentioned steps-

  • Step 1- Login to DOP Internet Banking
  • Step 2: Click on ‘Common Services’ > Service Request > ‘New Request’. 
  • Step 3: After that click on NSC account. Here you will get the link to open NSC account and KVP account to open KVP account.
  • Step 4: Enter the amount for which NSC is to be opened with a minimum of Rs 1000 and in multiples of 100.
  • Step 5: Select the PO savings account linked to the debit account. 
  • Step 6: Click on the ‘Submit Button’ to read the terms and conditions and accept the terms and conditions. 
  • Step 7: After that deposit the money online. 
  • Step 8: Enter transaction password and submit. 
  • Please login again to view the details of NSC opened through the account. 

Kisan Vikas Patra- Calculator

Time Period15 January 2000 to 28 February 20011 March 2001 to 28 February 20023 March 2002 to 28 February 2003After 1 March 2003
YearAmount Deposited
1NANANANA
2NANANANA
2 Years 6 Months₹ 1246₹ 1209₹ 1195₹ 1170.51
3 Years₹ 1302₹ 1274₹ 1256₹ 1207.95
3 Years 6 Months₹ 1407₹ 1327₹ 1305₹ 1267.19
4 Years₹ 1478₹ 1409₹ 1382₹ 1310.8
4 Years 6 Months₹ 1585₹ 1470₹ 1439₹ 1355.9
5 Years₹ 1668₹ 1572₹ 1534₹ 1435.63
5 Years 6 Months₹ 1779₹ 1644₹ 1602₹ 1488.49
6 Years₹ 1874₹ 1770₹ 1672₹ 1543.3
6 Years 6 Months₹ 2000₹ 1857₹ 1800₹ 1649.13
7 YearsNANA₹ 18831713.82
7 Years 3 MonthsNA₹ 2000NANA
7 Years 6 MonthsNANANA1781.06
7 Years 8 MonthsNANA₹ 2000NA
8 Years 7 MonthsNANANA₹ 2000
More Than 8 Years 7 Months NANANANA

Kisan Vikas Patra- Conditions for Transfer to Another person

Kisan Vikas Patra transfer can be done under following conditions.

  1. To the nominee/legal heir on the death of the account holder.
  2. On the death of the account holder(s) of the joint holder(s).
  3. On the orders of the court.
  4. On pledging the account with a gazette authority.

FAQ-Kisan Vikas Patra

Ques- What is new interest rate for Kisan Vikas Patra?

Ans- Interest rate for Kisan Vikas Patra have been increased from 7% to 7.2%.

Ques- What is Maturity period for Kisan Vikas Patra?

Ans- Maturity period for Kisan Vikas Patra is 124 Months.

Ques- What is Lock-in period for Kisan Vikas Patra?

Ans- Lock-in period for Kisan Vikas Patra is 2.6 Years.

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Neo Banks and Their Increasing Popularity in India


With the focus of Indian Government on more and more of digital transaction and adoption of technology in financial sector, lot of digital Bank called Neo Banks are gaining acceptance.

Image Courtesy- Medium

Neo Banks Overview

What is Neo bank

A neo bank, also known as a digital bank or a mobile-only bank, is a type of bank that operates primarily through digital channels and typically has no physical branches. They offer a wide range of banking services, such as current accounts, savings accounts, loans, and credit cards, but they are accessed and managed entirely through a mobile app or website.

Neo banks usually have an app-based interface which allows customers to open an account, transfer money, pay bills, view account details, and perform other banking functions with a few clicks on their mobile devices. They are built on technology infrastructure and leverage on data analytics to provide customers with personalized banking services and experiences.

Difference between Neo Bank & Traditional Bank

With the focus of Indian Government on more and more of digital transaction and adoption of technology in financial sector, lot of digital Bank called Neo Banks are gaining acceptance.

One of the key differences between neo banks and traditional banks is that neo banks don’t have the same regulatory requirements as traditional banks. This allows them to offer more flexible and innovative products and services, such as instant account opening, real-time account monitoring, and cashless payments.

Some of the benefits of neo banks include lower fees, higher interest rates, and better customer service. They also appeal to a younger generation of customers who are more comfortable using digital channels for banking services and are looking for a more personalized and convenient banking experience.

In summary, a neo bank is a digital-only bank that operates primarily through mobile apps and websites, providing customers with a wide range of banking services including current accounts, savings accounts, loans, and credit cards. They leverage on technology and data analytics to offer personalized banking services, have lower fees, higher interest rates, and better customer service compared to traditional banks

How many Neo banks currently operating in India

As of 2021, there were several neo banks currently operating in India. Some notable examples include:

  • Yono SBI (State Bank of India) – a digital-only bank launched by the State Bank of India, the country’s largest public sector bank.
  • Kotak 811 – a digital-only bank launched by Kotak Mahindra Bank, one of India’s largest private sector banks.
  • Paytm Payments Bank – a digital-only bank launched by Paytm, one of India’s largest digital payments companies.
  • Airtel Payments Bank – a digital-only bank launched by Airtel, one of India’s largest telecommunications companies.
  • Digibank by DBS – a digital-only bank launched by DBS Bank, a Singapore-based bank that operates in India.

It is worth noting that the number of neo banks operating in India is likely to change over time as the Indian government continues to encourage the growth of the fintech sector and new players enter the market.

In summary, as of 2021, there were several neo banks operating in India, including Yono SBI, Kotak 811, Paytm Payments Bank, Airtel Payments Bank and Digibank by DBS. However, the number of neo banks operating in India is likely to change over time as the Indian government continues to encourage the growth of the fintech sector and new players enter the market

Pro and cons of Neo bank

Some pros of using a neobank include:

  • Lower fees and better interest rates compared to traditional banks
  • Convenience and accessibility through mobile apps and online banking
  • Additional features such as budgeting tools and savings programs

Some cons of using a neobank include:

  • Limited physical branches and ATM access
  • Limited account options and products compared to traditional banks
  • Limited deposit insurance protection and may be more vulnerable to cyber attack
  • May not have the same level of security and fraud prevention as traditional banks.

How Neo bank benefit Indian consumer and India as whole

Neobanks can benefit Indian consumers by providing them with more convenient and accessible banking options through mobile apps and online platforms. They can also offer lower fees and better interest rates than traditional banks. Additionally, neobanks can provide budgeting tools and savings programs that can help consumers better manage their finances.

Neobanks can also benefit India as a whole by increasing financial inclusion and providing more competition in the banking industry. This can lead to better products and services for consumers, as well as increased innovation in the banking sector. Neobanks can also help to reduce the “unbanked” population in India by making it easier for people to access basic financial services.

However, it’s important to keep in mind that neobanks are relatively new in India and are still in the process of obtaining the licenses. So, their benefits may take time to fully manifest in India.

————— END ————–

7 Personal finances to watch out for in 2023

Personal finance is the process of managing one’s money to achieve their financial goals. It encompasses budgeting, saving, investing, and protecting one’s assets. By understanding and practicing good personal finance habits, individuals can take control of their financial future and achieve financial security.

Personal Finance

With the Indian Economy growing at an exponential rate , personal finance sector is booming at fast pace. From introduction of UPI to the emergence of innovation new products, the the Indian personal finance sector is evolving at fast pace. Some of the most important personal finance to look out for in year 2023 are:

1) Buy Now Pay Later(BNPL)

“Buy now and pay later” is a type of financing option that allows consumers to purchase goods or services without paying the full amount upfront. Instead, they make regular payments over time to pay off the balance. This type of financing is often offered by retailers and can be used for a variety of items, such as furniture, appliances, electronics, and clothing.

There are a few different types of “buy now, pay later” options available. One popular option is a layaway plan, where the consumer pays a deposit and then makes payments over time until the balance is paid off. Once the balance is paid in full, the consumer can take possession of the item. Another option is a deferred billing plan, where the consumer can take possession of the item immediately but is required to make payments over time to pay off the balance.

A third option is a revolving line of credit, such as a store credit card, that allows consumers to make purchases and pay them off over time. These types of credit lines typically have high-interest rates, and it’s important to be aware of the terms and conditions before signing up.

It’s important to keep in mind that although “buy now, pay later” options can be convenient, they can also lead to overspending and debt if not used responsibly. Consumers should carefully read the terms and conditions of the financing agreement and make sure they can afford the payments before agreeing to the terms. It’s also important to compare the costs of different financing options to ensure that you are getting the best deal.

2) Cryptocurrency

Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of a central bank. Bitcoin, the first and most widely known cryptocurrency, was created in 2009. Since then, thousands of other cryptocurrencies have been created and they have become a popular investment option for many individuals.

Investing in cryptocurrency is considered to be a high-risk, high-reward investment. The value of cryptocurrencies can be extremely volatile and can fluctuate dramatically in a short period of time. For example, the value of Bitcoin, the most well-known cryptocurrency, has increased by over 400% in the past year alone. However, it has also experienced significant drops in value in the past as well.

One of the main advantages of investing in cryptocurrency is the potential for high returns. Because of the volatility of the market, investors have the potential to earn significant profits in a short period of time. Additionally, many cryptocurrencies have a limited supply, which can drive up demand and increase the value of the currency.

Another advantage of investing in cryptocurrency is the increased accessibility and decentralization of the market. Unlike traditional investments, anyone with an internet connection can purchase and trade cryptocurrencies. This allows for greater accessibility to the market and can provide opportunities for individuals who may not have access to traditional investment options.

However, there are also significant risks associated with investing in cryptocurrency. The market is highly speculative and there is a lack of regulation, which can make it difficult to protect against fraud and other forms of financial crime. Additionally, the value of cryptocurrencies can be highly volatile, and the market can be influenced by a wide range of factors, including government regulations and investor sentiment.

It’s important to note that investing in cryptocurrency should be considered a speculative investment and should only be done with money that you can afford to lose. Before investing, it’s important to do your research and understand the risks involved. It’s also a good idea to diversify your investment portfolio and not to invest more than a small percentage of your overall portfolio in cryptocurrency.

In conclusion, Cryptocurrency has the potential to be a profitable investment, but it is also a highly speculative and risky investment. It’s important to do your research and understand the risks before investing. As with any investment, it’s important to only invest what you can afford to lose and to diversify your portfolio.

3) Real Estate Investment

Real estate is a popular investment option for many individuals, as it can provide a steady stream of income through rental income and can appreciate in value over time. There are several different ways to invest in real estate, including buying rental properties, flipping houses, or investing in real estate investment trusts (REITs).

One of the most popular ways to invest in real estate is through rental properties. This involves buying a property, such as a house or apartment, and renting it out to tenants. The rental income can provide a steady stream of income for the investor, and the property can appreciate in value over time. However, it’s important to note that owning rental property also comes with responsibilities, such as being a landlord, maintaining the property and finding tenants.

Another way to invest in real estate is through flipping houses. This involves buying a property, making improvements to it, and then reselling it for a profit. This can be a risky investment, as the value of the property may not increase as much as expected, or the costs of the renovations may be higher than anticipated.

Another way to invest in real estate is through REITs. REITs are publicly traded companies that own and manage income-producing real estate. They provide investors with an opportunity to invest in a diversified portfolio of properties and receive a share of the income generated. REITs can provide a steady stream of income and can be a less risky way to invest in real estate compared to buying a rental property or flipping a house.

It’s important to note that investing in real estate can also come with risks. The value of a property can decrease in value and the property may be difficult to sell. Additionally, rental properties may have periods of vacancy and the cost of maintenance and repairs can be significant.

Before investing in real estate, it’s important to do your research and understand the risks involved. It’s also a good idea to consult with a financial advisor to determine if real estate investment is suitable for your investment portfolio and your financial goals.

In conclusion, Real estate can be a worthwhile investment, providing a steady stream of income and the potential for appreciation in value over time. However, it’s important to do your research, understand the risks, and consult with a financial advisor before investing. Additionally, it’s important to diversify your portfolio, as over-investing in real estate can increase the overall risk in your portfolio.

4) ETF as Investment

Exchange-traded funds (ETFs) are a type of investment vehicle that allows individuals to invest in a diversified portfolio of assets. They are similar to mutual funds in that they provide exposure to a variety of stocks, bonds, or other assets, but they are traded on stock exchanges like individual stocks.

One of the main benefits of ETFs is their diversification. By investing in an ETF, individuals can gain exposure to a wide range of assets and industries, which can help reduce risk. This is because the performance of any one stock or bond in the ETF is not likely to have a significant impact on the overall performance of the fund.

Another benefit of ETFs is their low costs. Because ETFs are traded on stock exchanges, they typically have lower expense ratios than mutual funds. This means that investors can keep more of their returns and pay less in fees.

ETFs also offer more flexibility compared to traditional mutual funds. ETFs can be bought and sold at any time during trading hours on stock exchanges, while mutual funds can only be bought and sold at the end of the trading day at their net asset value (NAV). Additionally, ETFs can be shorted, options can be written on them, and they can be traded using margin, which provides more options for investors.

However, it’s important to note that ETFs also have their own set of risks. Like any investment, the value of an ETF can go up or down and investors can lose money. It’s also important to understand that ETFs are not suitable for short-term investment, as the value of the ETF may fluctuate in the short term. Additionally, ETFs may not always track their underlying index or benchmark perfectly, which may result in tracking error.

In conclusion, ETFs can be a great investment option for those looking to diversify their portfolio and gain exposure to a wide range of assets at a low cost. However, it’s important to understand the risks and to consult with a financial advisor to determine if ETFs are suitable for your investment portfolio and financial goals. Additionally, it’s important to do your own research and understand the ETF’s underlying assets, expense ratio, and trading volume before investing.

5) Neo Banks

Neo banks, also known as digital or online banks, are a new type of financial institution that operate primarily online and through mobile apps. They offer many of the same services as traditional banks, such as checking and savings accounts, debit cards, and the ability to make payments and transfer money. However, there are some key differences between neo banks and traditional banks that can affect personal finance.

One of the ways in which neo banks can affect personal finance is by providing greater convenience and accessibility. Because neo banks operate primarily online and through mobile apps, customers can access their accounts and conduct transactions at any time and from anywhere. This can make it easier to manage one’s finances and stay on top of expenses, budgeting and saving.

Another way in which neo banks can affect personal finance is by providing lower fees. Neo banks tend to have lower or no fees compared to traditional banks. This can save customers money and make it easier to reach financial goals.

Neo banks also often use technology and data to provide personalized financial advice and insights. They can use data on customer’s spending habits, income and debts to provide personalized recommendations on how to improve their financial situation. This can help customers to better understand their finances and make more informed decisions.

On the other hand, Neo Banks may also affect personal finance by having limited services and product offerings. They may not provide loans, mortgages, or other financial products that traditional banks offer. This can make it difficult for customers to access these services, and may limit their financial options.

Additionally, Neo Banks may not have the same level of security and insurance as traditional banks, which can put customer’s assets at risk. Moreover, in case of any technical issues or outages, customers may not have access to their funds or account, which can cause inconvenience.

In conclusion, Neo Banks can have a positive impact on personal finance by providing greater convenience, lower fees, and personalized financial advice. However, it’s important to consider the limitations of these banks and the risks involved before deciding to switch to a Neo bank. It’s essential to weigh the pros and cons and make an informed decision that aligns with your personal financial goals and needs.

6) P2P Lending

Peer-to-peer (P2P) lending is a form of lending that allows individuals to borrow and lend money without the involvement of a traditional financial institution. P2P lending platforms connect borrowers and lenders directly, eliminating the need for banks as intermediaries. This can result in lower costs and more favorable terms for borrowers and higher returns for lenders.

P2P lending can be done through various platforms, such as online lending platforms, social lending networks, and even mobile apps. These platforms typically perform credit checks and verify the identity of borrowers and lenders, but the process is generally faster and less bureaucratic than going through a traditional bank.

P2P lending can be beneficial for borrowers who may have trouble getting a loan from a traditional bank, such as those with lower credit scores or self-employed individuals. It can also be beneficial for lenders, as it can provide higher returns than traditional savings accounts or certificates of deposit.

However, P2P lending also comes with certain risks. Borrowers may default on their loans, which can result in a loss of principal for lenders. Additionally, P2P lending platforms may not have the same level of regulation and oversight as traditional banks, which can increase the risk of fraud and other financial crimes.

It’s important to note that P2P lending is not a regulated activity in all countries, and the level of protection provided to consumers may vary. Therefore, it’s essential to research the platform and understand the terms and conditions before investing or borrowing.

In conclusion, P2P lending can be an alternative form of lending for borrowers who may have trouble getting a loan from a traditional bank, and an alternative investment for lenders. However, it’s important to understand the risks and do your research before getting involved. It’s also important to diversify your investments, as lending to a single borrower can be risky. It is always recommended to consult with a financial advisor before making any investment decision.

7) Stock Market

The stock market is a marketplace where publicly traded companies’ stocks are bought and sold. Investing in the stock market can be a way for individuals to grow their wealth over time by buying shares of companies they believe will perform well.

One of the main benefits of investing in the stock market is the potential for high returns. Historically, the stock market has provided higher returns over the long-term compared to other investment options such as bonds or savings accounts. This is because stocks represent ownership in a company, and as the company grows and becomes more profitable, the value of the stock increases.

Another benefit of investing in the stock market is the ability to diversify one’s portfolio. By investing in a variety of stocks across different industries and sectors, individuals can spread their risk and increase the chances of achieving positive returns. Additionally, investors can also invest in index funds, which track a specific market index, providing broad exposure to the market.

However, it’s important to note that investing in the stock market also comes with risks. The value of stocks can go up or down and investors can lose money. It’s also important to understand that the stock market can be affected by a wide range of factors, including economic conditions, government policies, and investor sentiment.

Before investing in the stock market, it’s important to do your research and understand the risks involved. It’s also a good idea to consult with a financial advisor to determine if stock market investment is suitable for your investment portfolio and your financial goals. Additionally, it’s important to have a long-term perspective and not to make investment decisions based on short-term market fluctuations.

In conclusion, investing in the stock market can be a way for individuals to grow their wealth over time, but it also comes with risks. It’s important to do your research, understand the risks, and consult with a financial advisor before investing. Additionally, it’s important to diversify your portfolio and have a long-term perspective.

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