India Union Budget was sector diversified and considering the increasing global economic challenges, the India Government has attracted industries, private sector business class and investors to join hands including Public Private Partnerships (PPP) and focusing to reach the target of “Vikasit Bharat” in the year of 2047. The Budget touched from the Micro Industry level (MSME) to the Infrastructure Development level and that will support to make self-sustainable growth of India.

The budget is also supportive for India-Gulf and India-Europe newly signed Agreements in 2026. Accordingly, the budget is emphasizing more on Innovations, MSME and Startups Businesses in villages and cities across India. The budget is targeting to empower young entrepreneurs and create more jobs in different industries and sectors by integrating AI and Engineering Technologies.

Indian Expats are getting benefits from Tax exemptions, decriminalizing the non-declaration of foreign Assets and filing extensions, buying properties and investments in India more easily. The Budget aims to support NRIs to bring their foreign savings to India and this will be helpful for long term growth of India.

NRIs will get more investment opportunities to Indian Stock Markets through RBI regulated Portfolio Investment Scheme (PIS) Account. The Budget has increased the NRI investment limit of each company from 5% to 10% in the Stock Market.. The limit of various investments to India from PROI category Indians has increased to more than doubled. Now Indian expats can invest to India and repatriate easily through the Budget announcement. Indian expats can also own land and houses easily.

India expats will get opportunity to start MSME and STARTUP business in India and Internationally based on the India – Gulf and India – Europe agreements..

Budget is also taken measures to reduce unwanted speculations in the Stock Markets by increasing Securities Transaction Tax (STT) for Futures & Options Traansactions. It was not supportive for Investors and the Indian Stock Markets went down after the Budget Session.

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The new stablecoin aims to revolutionise the ease of making payments and doing business, both locally and globally. It will position the UAE at the forefront of global blockchain innovation as a leading fintech hub while strengthening the nation’s digital infrastructure.

The Dirham-backed stablecoin is designed to enable secure, verifiable payments in a world where identity, governance, and value flow freely.
Wide applications for various users
This stablecoin will serve as a reliable digital currency across various everyday scenarios, benefiting citizens, consumers, businesses, and institutions alike. Additionally, it will support emerging digital use cases such as machine-to-machine communication and AI applications.

ADI blockchain: A foundation for innovation

The new stablecoin will operate on the ADI blockchain, a cutting-edge technology developed in the UAE by the ADI Foundation. This blockchain will provide a compliant distribution network for blockchain payments. The ADI Foundation bridges established financial systems with next-generation blockchain technology, empowering citizens in emerging countries to compete and operate on a global scale.

The ADI Foundation has already forged strategic partnerships with governments in over 20 countries.

Key industry leaders weigh in

Mohamed Hassan Alsuwaidi, Managing Director and Group CEO of ADQ, commented: “The launch of the stablecoin marks a pivotal step in our commitment to strengthening the UAE’s digital infrastructure ecosystem. As we move towards a more connected economy, the stablecoin will offer a secure, efficient, and scalable solution while creating opportunities for growth.”

Syed Basar Shueb, CEO of IHC, added: “This stablecoin represents a major breakthrough in the development of digital currencies, and we’re proud to have played a key role. With IHC’s expertise in blockchain and fintech, we look forward to exploring its vast potential and driving innovation in the UAE.”
Hana Al Rostamani, Group CEO of FAB, stated: “As a founding partner, FAB is proud to be at the forefront of global innovation. This stablecoin will revolutionize how consumers and businesses engage with blockchain payments in the UAE.”

Guillaume de La Tour, CEO of ADI Foundation, said: “This stablecoin is a milestone in the UAE’s journey towards a more inclusive, digitally empowered economy. By leveraging ADI blockchain, we’re enabling secure, transparent, and efficient transactions built on technology developed in the UAE.”

Landmark for the UAE’s fintech future

The launch of this stablecoin is expected to have a significant impact on industries such as finance, commerce, and trade. It represents a critical step towards realizing the UAE’s vision of becoming a global hub for innovation and financial technology.

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We need to do a little planning so that we do not regret eating some of the seeds that we needed to sow for future income in the autumn of our lives. We are talking about planning for financial independence. Financial planning is no rocket science. All we need to do for financial independence is to prepare for a long journey.

There are three basic things we need to do for financial freedom. The first is life insurance. What if death comes calling a little early in life, quite unexpectedly? The rhythm of life of those who depend on us will not be the same as earlier. Those who renew their car insurance regularly should keep this fact in mind as well. The financial security of the family must be ensured so that the cost of living can be borne easily in the absence of the principal financial provider. That’s what life insurance is for.

Most people think of life insurance as an endowment policy or a moneyback policy or a ULIP. Insurance is for insurance only. Do not mix it with investment. That is why you need a term policy to insure your life.

If you decide to take out life insurance, the next step is to decide how much insurance you will need. The sum insured should be at least 10-15 times the current annual income. In case of untimely death, the family member should be able to invest a fixed amount every month from a fixed deposit or debt fund so that they can meet their expenses while maintaining their current lifestyle. That is why such a large amount of insurance is guaranteed. For a 35-year-old to take out a term policy of Rs.1 crore, it is enough to pay an annual premium of Rs.11,000 to Rs. 13,000.

What you need next is health insurance. A good percentage of people admitted to hospitals for treatment fall into debt due to lack of adequate financial planning. The increase in medical expenses is much higher than normal inflation. Health insurance is unavoidable as you are more likely to suffer from health problems due to lifestyle changes.

Those who think seriously about the future should take care to sow the seeds in the right place for future income. For a good harvest, sowing time, sowing method and proper waiting for harvest are required. The best way to plan and invest is to invest in equity mutual funds every month. The sooner you start, the more you gain.

You need to invest with future financial needs in mind. For example, suppose the annual expenditure of a 30-year-old is Rs.3 lakhs. Assuming an annual inflation rate of 7%, his annual expenditure at the age of 60 would be Rs.23 lakh.

The way to facilitate financial planning is to start investing as early as possible. The best way to invest in the long term is to invest monthly. If a 30-year-old who invests Rs.10,000 per month in a mutual fund gets 12 per cent return per annum, he make a windfall of Rs 3.5 crore when he reaches 65 years. This is the magic of long term investment.

To summarise it, if you have a term policy, health insurance and a monthly investment in a mutual fund, you have opened the way to financial independence.

The post Three things to do to gain financial freedom appeared first on The Gulf Indians.

Those who have worked for two companies in a financial year need to ensure that the information provided when filing an income tax return is accurate. In such a case you will get two Form 16s. It is not enough to automatically record the information in them on the return.

If both employers who worked in the same fiscal year provided the same information about the deposits and did not provide the new employer with the salary details of the old company, the information on Form 16 that you pay tax may not be accurate. In that case you have to re-determine the tax on your own. Since both employers do not have complete information about your income, it is possible that the tax deduction will be calculated twice.

Discounts on HRA and LTA are calculated based on the length of time you have worked, so there is no risk of error. At the same time, exemptions under Section 80C of the Income Tax Act and concessions for deposits and interest on home loans are likely to be repeated. So both employers may have underestimated the tax you owe and withheld less tax than you actually owed as TDS. In this case, you have to pay the remaining tax on your own. For late payment of tax, interest is payable at the rate of one per cent per month.

If the tax deduction documents are not submitted on time, the employer may levy additional tax as TDS. Failure to submit the tax exemption documents such as lease agreement and receipt for HRA may result in loss of that exemption. In such cases the tax deduction for HRA can be claimed directly at the time of filing the income tax return. This will help you to get extra tax refund.

TDS will be levied if the deposit in the Employees Provident Fund (EPF) is withdrawn before the completion of five consecutive years of service. If the withdrawal amount is above Rs.50,000, 10 per cent TDS will be levied. TDS is not applicable if you have worked for more than five years. The old EPF investment period will also be considered for tax deduction only if the EPF under the old employer is not withdrawn and transferred to the EPF account under the new employer. For example, suppose you have completed four years under the old employer and one year under the new employer. TDS can be waived when the old EPF balance is transferred to the new account. Failure to do so will result in TDS being deducted from the balance of both the accounts.

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Reports indicate that there has been a recent increase in the number of customers switching from one financial institution to another. According to reports, there has been a 20 per cent increase in such changes in housing loans.

The customer has to take a loan from another bank or financial institution to repay the remaining loan amount. After that the EMI of the new loan has to be repaid. This is done when the loan is available at a lower rate than the interest rate of the existing loan.

Some people use it to pay off debts even when they have a large sum of money. Those who pay off their mortgage before the end of the term should take steps to reduce the debt burden only after verifying that they are actually benefiting from doing so. It is only when you look at the term of the loan and the interest payable that it becomes clear whether it is profitable to repay the loan early.

It is best to repay the loan in the first few years after taking out a loan. Most of the equivalent monthly installments in the first year of the loan period go to pay the interest. If we look at the structure of the equivalent month, thisnis clear.

Those who want to repay their mortgage early need to plan their loan accordingly. Repayment of a loan after taking a loan for a longer period of time can lead to higher interest payments.

For a borrower at a floating rate, the interest rate may vary depending on the liability and the equivalent monthly interest rate. However, it is more profitable to invest that amount more effectively than to repay the loan after half of the loan period.

Tax deduction under Income Tax Act 24 (a) for home loan borrowers is up to Rs. 2 lakhs per annum. Those in the higher tax slab can save up to Rs 60,000 on this tax. Therefore, such tax-deductible benefits should be considered before the maturity of the mortgage.

Before using the cash on hand to repay the loan to relieve the debtor, it is important to consider the benefits of investing it effectively before deciding whether or not to repay the loan before the loan expires.

The post Things to look out for when repaying a loan appeared first on The Gulf Indians.

This amount is refundable if the investor has no tax liability. But for this you have to file an income tax return and wait for months. For someone with no taxable income, it can be difficult to wait months for such a refund. Therefore, such difficulties can be avoided by applying for TDS exemption.

Form 15G is required to be submitted to the bank for exemption from TDS. These forms should be submitted for TDS exemption only if there is no taxable income.

People under the age of 60 can use Form 15G. In addition to individuals, Hindu Undivided Families can also submit this form.

Form 15H is only for individuals over 60 years of age. For those above 60 years of age, the tax is applicable only if the interest is above Rs.50,000. Therefore, those above 60 years of age are required to pay Form 15H only if the interest is above Rs.50,000.

It was announced in the last budget that senior citizens above the age of 60 will be exempted from paying tax on interest earned on fixed deposits in banks and post offices. The concession is a relief for those over 60 as senior citizens mostly rely on fixed deposits for their monthly income.

Those who submit Form 15G need to verify that they are eligible for it. Form 15G can be submitted only if the taxable income is Rs.2.5 lakhs or less. You also need to make sure that the total amount of interest you receive each year does not exceed the tax deduction limit. That is, if the interest income is more than Rs.2.5 lakh, you are not eligible to submit Form 15G. Form 15G can be submitted only if your taxable income and interest income are not above the tax deduction limit.

To avoid TDS, Form 15G has to be submitted at a bank branch which receives interest above Rs.10,000 through a fixed deposit. PAN number should also be provided at the time of submission. The form will not be valid if the PAN is not provided. The bank will also charge 20 per cent TDS.

Most banks charge interest on a quarterly basis. Therefore, it is advisable to submit Form 15G in June of each financial year.

These forms can be submitted not only to banks but also to other institutions that charge TDS on interest. TDS is levied if the Employees Provident Fund (EPF) is withdrawn before the completion of five consecutive years of service. If the withdrawal amount is more than Rs.50,000, 10 per cent TDS will be levied. Form 15G can also be submitted to the EPF office for TDS exemption if the taxable income does not exceed the tax deduction limit.

The post How to avoid TDS on interest for fixed deposit appeared first on The Gulf Indians.

K ARAVIND

The Universal Account Number (UAN) is mandatory for all investors in the Employees Provident Fund (EPF). With the introduction of UAN, PF balance transfer, account management and withdrawal have become much easier.

Usually an employee has one UAN. When an employee joins a company, he / she has to link the new PF number to the UAN that he / she has already been granted by the previous employer. The UAN will record details of existing PF‌ numbers and PF‌ numbers under previous employers.

The UAN is given by the employer to the employee. All you have to do is submit the required documents to the employer to activate it. If there is an existing UAN, a new UAN is not required. It lasts through out your career.

Some employees can be seen as having two UAE. This is due to the fact that the employee does not give the details of the existing UAN appropriately to the new employer.

If you have more than one UAN, you must notify the current employer. The Employees Provident Fund Organization (EPFO) should also send an e-mail showing the two UAN numbers. The first UAN will be cancelled and the second UAN will remain active after the EPFO ​​conducts the required inspection. With the first UAN cancellation PF number will also be de-linked. Therefore the amount in the PF number under the previous employer has to be transferred to the new UAN.

The EPFO ​​is also taking voluntary steps to merge more than one UAN of an individual. The previous UANs discovered by the EPFO ​​are being cancelled. Previous PF numbers need to be linked to the new UAN. The EPFO ​​will take action to merge the UANs even if the employee has not applied.

To avoid the confusion caused by multiple UANs, there are a few things to keep in mind when joining a new company. The new company must be notified of existing UAN in the new Form 11 Declaration Form. Provide PF account number and date of resignation from previous job even if you do not have a UAN.

UN PF is making transactions much easier. Bank account number, IFSC code and Aadhaar number are required to get the UAN allotted. It is usually the employer who takes the steps to get the UAN.

The post What should those with two UANs do? appeared first on The Gulf Indians.

The Nifty closed with gains last week. At the National Stock Exchange, the Nifty gained 90 points in a week based on the close. Public sector banks, auto and infrastructure stocks led the gains. The Nifty rose by 14,652.70 points but it failed to close above 14,500 on January 15.

The Nifty IT index was up 12 per cent in January. IT stocks have risen between 10 per cent and 35 per cent in a month. In the age of digitalisation, there has been a huge boom in the business of IT companies.

During the October-December quarter, IT companies generally saw strong growth. The potential for future revenue growth is also good. Leading IT companies’ performance reports have shown that the high demand for IT stocks in the stock market has been confirmed in every sense.

Last week saw the Bank Index hit an all-time high. Since then, it has come under sales pressure. HDFC Bank’s third quarter results released on January 15 will be crucial. Bank Nifty has a close of 33,800. 31,7000. The Nifty has a close of 14,890. It is supported at 14,370. If it does not stay above 14,370, the stock market will enter a revision phase.

The post Will the stock market continue to fluctuate? appeared first on The Gulf Indians.

Those who help the needy through donations are eligible for tax relief. Under Section 80G of the Income Tax Act, such donors are entitled to tax deduction.

Not all types of donations are tax deductible under Section 80G. Only contributions to government-recognised institutions and relief funds are tax deductible. This includes government and non-government organizations.

When making a donation to a non-governmental organisation, it is necessary to check whether the institution is eligible for exemption under Section 80G. If required, the registration certificate of the institution can be checked. The list of eligible companies for tax deduction is given on the website of the Income Tax Department (www.incometaxindia.gov.in). At the same time this list is not exhaustive.

Contributions made to political parties under Section 80G are not tax deductible but can be deductible under Section 80GC. Contributions made to foreign companies are not tax deductible under Section 80G.

Tax deduction under Section 80G is available only if the money is donated. Those who want to get tax relief should donate in cash. Donations in the form of clothing or food items will not be tax deductible.

Donations in cash are tax deductible up to a maximum of Rs.2000. This limit is applicable from the financial year 2017-18. Earlier, the limit was Rs.10,000. Therefore, those who want to avail tax deduction for amounts above Rs.2,000 should make a donation by check, demand draft or online fund transfer.

There are some limitations to getting a tax deduction. One hundred per cent donations to government institutions are also tax deductible. For example, 100 per cent contribution to the Chief Minister’s Disaster Relief Fund is tax deductible. At the same time, only 50 per cent of donations to NGOs can claim tax relief.

As such, the tax deduction is available only for 10 per cent of the total annual income after all tax deductions. Ten per cent of the tax-deductible income received under all sections except Section 80G is considered eligible for tax deduction. That is, 10% of the amount after deduction, including tax deduction of Rs.1.5 lakhs received under section 80C.

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Over the last few years, the acceptance of mutual funds among the general investor has been increasing. At the same time, it is important to remember that mutual fund units are subject to sales tax on long-term investors.

If the return on sale of shares and equity mutual fund units after holding them for one year or more is more than Rs.1 lakh, a tax of 10 per cent is payable. Tax is not applicable if the gain is less than Rs.1 lakh. Short-term capital gains tax is 15 per cent of the gain on sales after holding for less than a year. Short-term capital gains tax is applicable regardless of the gain.

Dividend plans of mutual funds are subject to the current 10 per cent dividend distribution tax. These funds are to be paid by mutual funds. The NAV of the fund unit decreases according to the tax paid.

If the debt funds are sold after three years, they will be taxed at 20 per cent of the amount received in excess of the current value calculated under the Cost Inflation Index of the previous investment. If it is sold before three years, the tax should be paid as per the tax slab.

Equity funds are funds that invest more than 65 per cent of their assets in equities. In addition to funds classified on the basis of market value, equity funds include equity linked savings schemes, hybrid equity oriented funds and arbitrage funds. Non-equity funds include debt funds, gold funds, hybrid debt oriented funds, international funds and funds of off funds.

When selling units purchased under the Systematic Investment Plan (SIP), the tax should be calculated considering the date of purchase of each unit. The tax liability will be calculated in the order in which the first purchased units are sold first.

This type of tax should be calculated even when making a systematic transfer plan. Suppose you are investing in a systematic transfer plan from a liquid fund to an equity fund. Liquid funds benefit from the sale of units each month. This gain is taxable.

It is important to remember that the tax is also applicable to the systematic withdrawal plan through with you withdraw a fixed amount every month. Gains from units sold each month are calculated and taxed.

In the event of the death of the investor, the mutual fund units are transferred to the nominee’s account. In such a case, capital gains tax is not applicable. However, tax is applicable on the sale of these units. The tax should be calculated on the basis of the purchase price of the original investment units.

The post How to calculate tax on gains from mutual funds appeared first on The Gulf Indians.

Tax planners need to be aware of all the ways to get a tax deduction. Ignorance of all the ways to get tax relief can lead to loss of eligible exemption.

Take home loan itself as an example. Home loans are one of the main ways in which monthly income earners can avail tax relief. Most salaried people rely on home loans to make their dream home a reality. Under Section 80C of the Income Tax Act, a repayment of Rs.1.5 lakhs on home loan and repayment of interest of Rs.2 lakhs under Section 24 of the Income Tax Act can be tax deductible every financial year. This is a tax deduction used by most taxpayers. At the same time, in addition to this, tax relief is also available for the top-up of home loans.

Home loan borrowers also have the option of taking a top-up loan on it. Top-up loan is a special facility provided by banks if the borrower has repaid the loan on time. The top-up loan will be the equivalent of the loan repayment so far. It can be used for home decoration and so on. There is no impediment to disbursement for other financial purposes. Such loan is given without any preconditions regarding utilisation.

Banks allow only a fixed percentage of home loans as top-up loans. Normally, 80-85 per cent of the value of the house is given as loan. The loan will be sanctioned only if the balance of the loan and the top-up loan are not more than 85 per cent of the current value of the home. The term of the top-up loan will be the same as the term of the existing home loan.

Top-up loans can also be tax deductible, but as there are no specific conditions for granting such loans, adequate documentation must be kept to show for what purpose it was spent. Concessions can be obtained by producing documents proving that the top-up loan was used to buy, build, repair or renovate a home. If the loan is used for other purposes, relief will not be available.

Top-up loans may not be as discounted as regular home loans. In the case of ordinary home loans, as per Section 24 of the Income Tax Act, a tax deduction can be availed for interest payable for loan amount above Rs.2 lakh up to a maximum of Rs. 30,000. For example, suppose you get a tax deduction for repaying an interest of Rs. 1,70,000 on a home loan. If you have made a repayment of Rs. 30,000 on the interest on the top-up loan, you can also get a discount on it. Thus a full tax deduction of Rs.2 lakhs can be obtained.

The limit of Rs. 30,000 is applicable only for repayment of interest on top-loan taken for repairs of taxpayer-owned house. At the same time the limit does not apply if it is a top-up loan taken for house given on rent. Tax deduction can be availed only for interest up to a maximum of Rs. 2 lakhs per annum. If the principal interest is more than Rs 2 lakh, the amount can be tax deductible in the coming years. Thus, tax relief is available on the repayment of the remaining interest for the next eight financial years.

In case of repayment of capital, tax deduction will be available according to the use of the loan. If the loan is utilised for construction or purchase of a new home, the tax deduction is available up to the limit as per the Income Tax Act for repayment on the loan. At the same time, if the loan is used for home repairs or renovations, no tax deduction will be available for repayment on the loan.

The post Get a tax deduction for a ‘top-up’ on home loan appeared first on The Gulf Indians.

For the fourth quarter from January 1 to March 31, 2021, interest rates on small savings schemes remained unchanged. The interest rate for the previous quarter will remain the same till March 31.

The interest rate from the Public Provident Fund (PPF) will remain at 7.1 per cent. The interest rate on the Senior Citizen Savings Scheme is 7.4 per cent. The interest rate on Sukanya Samridhi Yojana will remain at 7.6 per cent.

The interest rate on a one-year to three-year depot is 5.5 per cent. The five-year deposit carries an interest rate of 6.7 per cent. The interest rate on the National Savings Certificate is 6.8 percent. Kisan Vikas will remain at 6.9 per cent. The investment period of Kisan Vikas Patra is 124 months. The interest rate on five-year recurring deposits is 5.8 per cent.

The interest rates on most small savings schemes are still higher than the fixed deposits of banks. From the financial year 2016-17 onwards, the Central Government has revised the interest rates on small savings schemes to be re-determined every financial year. Instead, the government was introducing a quarterly rate revision for interest rates based on the yield on bonds.

PPF currently offers the highest interest rates on savings plans available to all types of investors. The investment period in PPF is 15 years. The attractiveness of PPF is that the interest on the investment is not taxable.

The investment period of PPF is 15 years. Up to the completion of five years, there is a facility to withdraw up to 50 per cent of the balance at the end of four years. The investment can be withdrawn only once in a financial year. The investment can be extended after 15 years for a period of five years. You can open a PPF account at a bank or post office. PPF can also be invested online in some private banks. A maximum of Rs.1.5 lakhs can be deposited in one or more installments in a financial year.

Sukanya Samridhi Yojana offers the highest interest rates. This is an investment scheme that can be started by parents in the name of girls 10 years of age or below. The interest rate is currently 8.5 per cent. Gains on withdrawal of investment after maturity are tax free.

The post No change in interest rates of small savings schemes appeared first on The Gulf Indians.

Many parents invest in mutual funds, PPFs and bank fixed deposits in the name of minors. The tax liability is to be calculated by adding the interest, dividends and capital gains received from such investments to the parent’s income.

But just because an investment is made in the name of the child does not mean that the parent is liable for the tax. In addition, if the investment is made in tax saving schemes in the name of the child, the parent will get a tax deduction in its name.

Under Section 80C of the Income Tax Act, if an investment is made in the name of an equity linked savings scheme or PPF in the name of a child, the parent can claim the tax deduction in its name. Such investments are tax deductible after deducting the parent’s taxable income. Under Section 80C, a tax deduction can be claimed for an investment of up to Rs.1.5 lakhs.

Deposits in the name of children can also claim another type of tax deduction. If the parent has made a taxable investment in the name of the child, the interest on the deposit in the name of the child up to Rs. 1,500 / – will be tax deductible. This tax exemption is as per Section 10 (32) of the Income Tax Act.
For example, if an investment in the name of the child yields Rs.5,000 as interest, Rs. 1,500 can be tax exempted and the remaining Rs 3,500 should be added to the taxable income. If both the parents have taxable income then the interest on the investment in the name of the children should be added in the name of the highest income earner.

Children’s own income does not have to be added to the parent’s taxable income. Children earn income through TV, movies, sports and other arts activities. Income earned by children in this way using their own ability or knowledge should not be included in the parental taxable income. Similarly, the income of children with certain disabilities does not have to be added to the taxable income of the parents.

Interest or capital gains on investments in tax saving schemes such as PPF in the name of children are not taxable. Benefit from PPF is tax free. At the same time, interest on bank fixed deposits is taxable. When the child reaches the age of 18, the child’s income does not have to be added to the parent’s taxable income. The tax liability of a person who has attained the age of 18 years will be considered separately.

The post Children’s income and income tax appeared first on The Gulf Indians.

In the coming months, the central and state governments will be busy preparing the Budget. Finance Minister Nirmala Sitharaman has already started discussions at various levels ahead of the preparation of the Union Budget. Individuals have many lessons to learn from the way governments prepare budgets. Many things that are done in government budgets cannot be done by financially disciplined individuals.

Fiscal deficit is one of the main issues discussed in the Budget discussions. Fiscal deficit refers to how much more is spent than government revenue. Often the government Budget is also in deficit.

But in the case of individuals, the deficit is a stepping stone to the financial trap. If you spend more than what you earn, you need to control that habit as soon as possible. The first step is to calculate your monthly expenses and debt. Change the condition of borrowing for monthly expenses. Be careful not to fall into the debt trap created by the use of credit cards.

The recent increase in the debt of the Central Government is significant. But the government does not have to worry too much about debt. The government can increase revenue by raising taxes and borrowing at lower interest rates. But the situation of individuals is different. According to inflation, the monthly income does not have to increase every year. Therefore, individuals should always be careful not to increase debt but to reduce it.

Government accounting often lacks capital and income. The government also treats the proceeds from the sale of assets as income. For example, proceeds from the sale of shares of public sector companies and telecom spectrum auctions are used to reduce the fiscal deficit by including it in the annual income. Only a small portion of this money used for expenses is reinvested in new assets.

Individuals should not view capital and income as one. If the land is sold or the investment in bonds or shares is withdrawn, it must be reinvested in other assets. Do not allow wealth to be wasted on excursions or shopping.

One of the reasons why the central government is languishing due to lack of funds is its various expenditures. The government incurs a number of expenses ranging from interest to pension. Taking on such a wide variety of financial responsibilities in the case of individuals can affect not only financial health but also physical health. You need to think twice before heading for the kind of fixed extra costs that can affect the financial balance between the various costs such as EMI of the loan, investment through a SIP and insurance premium.

It is common for governments to announce many projects in the budget. Although many observations are made about the big goals and possibilities of the newly announced projects in the budget discussions, such discussions do not reach the level of examining what happened to the projects announced in the past.

Many of the projects announced are routinely dragging on. This is another lesson to be learned in financial planning. It can be difficult for individuals to move forward with financial planning with multiple goals in mind. It is important to make a planned investment for three or four achievable goals. That’s the way towards a long-term financial independence.

The post What to look out for when preparing a budget appeared first on The Gulf Indians.

Investment does not have to be successful just because it is earned and invested in those areas where it is most effective. There are a few other things to keep in mind to maximise investment returns.

Investors need to be careful to reap the benefits of compound interest. For example, if you have fixed deposit in a bank, you can opt for an interest refinancing method. When you do this, you get interest on the capital invested and the interest earned on it. This is where the benefits of compound interest come into play. For example, suppose you invest Rs.1 lakh in a bank fixed deposit scheme with 6 per cent interest. If you opt for a quarterly interest bearing scheme, the interest payable over five years will be Rs.30,000. At the same time, if you opt for an interest reinvestment scheme, you will get Rs.34,685. The additional interest you get is Rs.4685. The interest rate is 15 per cent higher than that received from the scheme which accepts interest on a quarterly basis. This is the magic of compound interest.

If you do not have to utilise the interest earned on the investment to meet any of your needs, it is a good idea to reinvest it. Or you have to be careful to invest this interest somewhere else effectively.
Similarly, when investing in equity mutual funds, care must be taken to ensure that the choice of funds is more effective. For example, Growth plans outperform dividends of equity funds in the long run. It is important to understand this difference and choose growth plans.

Another thing is to keep a bank account specifically for deposits. This will give you a clear idea of the investment and the benefits. This account should be considered as a channel for investing in investment avenues such as fixed deposits and mutual funds. This method can be used to assess the benefits such as dividends from shares credited to the account and interest from bank fixed deposits. Tracking this bank account will help you to repurchase benefits such as dividends and avoid using them for expenses.

Reviewing the portfolio will help ensure that the return on investment is adequate. Care should be taken to check whether the investment is growing in a way that helps to achieve the goals.

Care must be taken to protect the gain in line with the objectives. For example, if the return on equity investment is better than expected within a year, care should be taken not to give up the gain by booking a partial profit.

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Investors and taxpayers have certain rights of their own. Most people are not aware of this.

You have the right to know how much commission the supplier gets when you buy insurance policies and mutual fund schemes. In the case of insurance products, the commission of the supplier depends on the policy premium. The distributor is required to disclose commission information before you can sell the policy. The information about the commission is provided in the proposal form of the unit linked insurance policy (ULIP).

If the insurer is not satisfied with any of the terms or features of the policy, the policyholder can cancel the policy within 15 days of receipt of the policy document. These 15 days are referred to as the free-look period. The policyholder can reach a decision within 15 days after reading the policy document in detail. If the policy is cancelled, the full premium paid will be refunded to the owner. The policyholder has to apply for cancellation of the policy during the free look period in the prescribed form (free look request form). The reason for cancellation of the policy should be stated.

It is not uncommon for bank borrowers to default on their EMIs due to unforeseen circumstances. First, the bank or financial institution gives a 60 days’ notice. During these 60 days you can inform the concerned bank officers about your adverse situation. The recovery agent of the bank or financial institution has no right to harass you during this period. You may only be contacted by phone between 7am and 7pm. If the recovery agent speaks abusively to you, you have the right to approach the bank and file an FIR.

You do not have to bear the financial loss if someone misuses your debit or credit card. Such transactions should be reported to the bank immediately. The card can be blocked to avoid further misuse.

If you have a refund within 90 days of filing your income tax return, you are entitled to receive it. In case of late refund, you are entitled to a fixed percentage of the refund amount per month as interest. If the refund is not received within 90 days, you can approach the Assessing Officer or lodge a complaint through the Income Tax Department’s website.

If there is any change in the investment structure of a mutual fund, the investor should be informed. Investors have the right to withdraw their investment from the fund without having to pay an exit load before the change takes effect.

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It is natural for people’s attitudes to change as income increase. Mobile phones are usually replaced every six months or a year. Similarly, instead of travelling by bus, it has become a habit to call a call taxi. Instead of buying cheap clothes, some people look only at branded clothes.

There is nothing wrong with raising the cost of living in line with rising incomes. Ultimately, we work and earn an income to make life more comfortable. But if you do not pay attention to how much you spend in line with raising the standard of living, the costs will go beyond the limits. If the standard of living rises beyond that of income, it will adversely affect financial discipline.

The increase in the cost of living is most likely to affect people between the ages of 20 and 30. At this age, young people with light financial responsibilities may feel more inclined to get a good job and gradually increase their salary. Higher salaries at a young age can create a false sense of security. But while job security depends on many factors, it is not correct to assume that there will always be job security in life. Unexpected job loss can upset the standard of living.

The annual increase in the cost of living for people between the ages of 25 and 40 is 15 per cent to 20 per cent. But the increase in revenue is much lower than this. We often confuse this golden stream with the well. For example, suppose you bought a Maruti Suzuki Alto in 2014. Assuming a loan of Rs.3.5 lakh for this, the EMI can be assumed to be Rs. 6,000 to Rs.7,000. Now, if you buy a Swift car with a loan of Rs.5-6 lakh as part of raising your standard of living, the EMI will be Rs.10,00 to Rs.11,000. The increase in the cost of EMI is very high.

If raising the standard of living is a pleasure, then lowering the standard of living for unforeseen reasons is an unpleasant experience. This experience can be counterproductive if there is no control over costs. The drastic increase in the cost of living can lead to a decrease in the income required for later life.

It is important to maintain a balance between savings for future life and expenses for enjoying life today. You can reap the benefits in the future by avoiding some additional costs. This will help you to achieve the goals you want to achieve in life.

Unnecessary expenses can be avoided if the investment is carried forward in line with one’s life goals. If the investment is planned with retirement income, children’s education, marriage and housing in mind, there will be no money left over for unnecessary expenses. Only the money earned after investing a certain amount of income from each month for each of these purposes should be used for expenses. Care should also be taken to make it a habit to spend only within a fixed budget.

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Marriage is a milestone in one’s life. It also leads to changes in many habits of individuals. It is also reflected in financial transactions. Financial habits after marriage may not be the same as before marriage. Many preparations need to be made before marriage. It is also necessary in financial matters.

Your life partner’s debt may affect your future financial status. Therefore, spouses should disclose their assets and liabilities to each other. The repayment of the loan taken before marriage is not something that the husband or wife should keep as a secret from the other. The plan for your future life together can only be effective if you understand how much your current debt is. It is necessary to assess whether the existing debt will prevent you from buying a house or a car.

Life partners need to decide how to manage bank accounts. It is up to the couple to decide whether to keep their pre-marital accounts separate or to have a joint account. When both parties have jobs and special salary accounts are required, it is sufficient to maintain those accounts. If both parties transfer a certain amount to a joint account every month, it can be used for purposes like home loan EMI.

It is not uncommon for life partners to have different financial goals after marriage. But your partner needs to be convinced of that. For example, suppose you want to work as a freelancer and earn a living with a relatively small income. At the same time your life partner may have a little more desire. It may be that someone wants more income and better savings. If you like expensive long journeys and its pleasures, your life partner may be willing to make more money to achieve goals such as low cost and good housing. Such divergent financial interests can lead to differences of opinion between spouses.

The habits of spending and earning money may vary according to the individual’s financial background. Differences in financial habits between spouses can lead to inconsistencies.

When one person tries to cheat on a particular thing, the other person may feel that he is wasting the money he is earning. In such cases, the two should discuss and try to reach that a healthy financial habit that is acceptable to both of them.

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When everything is online, how can post offices alone not be part of it? Although there are post offices in every nook and corner of the country, the financial services provided by the Postal Department have been linked to the Internet for greater convenience. It is possible to invest in the financial products of the Postal Department without visiting the Post Office branches.

Financial services such as Post Office Savings Account, Recurring Deposit Account, Public Provident Fund (PPF), Time Deposit and National Savings Certificate (NSC) are available through the Postal Bank’s Internet Banking. You can access account information, see transaction details and transfer money to other postal department accounts through the Internet. Investments in PPFs and recurring deposits can also be handled online.
There is no need to go to the branches to deposit, partially withdraw and reinvest in recurring deposit. It is also possible to withdraw investment from PPF, borrow, repay and reinvest through Internet. If you want to withdraw money from PPF, you can complete the procedures online. The investor will know the amount that can be withdrawn after logging in through internet banking.

In order to avail internet banking services, the account holder has to enter his e-mail address, PAN number, mobile number and maternal name. This information must be provided with the application for access to Internet banking services. The application form is available on the website of IndiaPost.

Those in rural areas are more likely to rely on post office and banking services. Since the launch of internet banking last year, more and more investors in cities have started investing in post office savings schemes.

One of the reasons why a section of the urban population is reluctant to invest in these is that they have to visit the Post Office branch to make every transaction. With the advent of internet banking, more and more people are attracted to post office savings schemes which offer higher interest rates than banks.

Public Provident Fund – 7.1 per cent, National Savings Certificate – 6.8 per cent, Sukanya Samridhi Yojana – 7.6 per cent, Kisan Vikas Patra – 6.9 per cent and Senior Citizen Savings Scheme – 7.4 per cent.

The interest rate on term deposits of one to five years ranges from 5.5 per cent to 6.7 per cent. The interest rate on a five-year fixed deposit is 6.7 per cent. The five-year recurring deposit rate is 5.8 per cent.

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Investing in a systematic investment plan (SIP) is a way to grow wealth in the long run without worrying about the ups and downs of the stock market. However, many people are sceptical that this method is suitable for senior citizens.

Retirees between the ages of 55-60 are routinely withdrawing their investments, leading to the question of what relevance SIP has after that. Retirement is the end of many long-term investment schemes.

But the argument that SIP is not suitable for senior citizens is not correct. They are investing in long-term return on investment in schemes such as Employees Provident Fund (EPF) and National Pension System (NPS) with retirement returns.
Since the returns on bank fixed deposits and small savings schemes are small, a portion of the investment should be invested in high return schemes. One way to do this is to invest in mutual funds’ equity schemes under SIP.

SIP with a tenure of seven to ten years is suitable for senior citizens. After investing a portion of the proceeds in schemes such as Senior Citizen Savings’ Scheme or Debt Funds for fixed income and setting aside a fund for urgent needs, investing the remaining amount in equity funds through SIP for higher returns is a ‘balanced’ investment method. After seven to ten years, the investment in the equity fund can be withdrawn and used for a fixed income later in life. This amount can be reinvested in liquid funds or other debt funds as per the requirement of the investor.

Equities and equity-linked investments are ideal for those who are willing to take risks. At the same time, SIP is a great way to mitigate risk. Therefore, senior citizens can also avail SIP if the investment period is long.

There are a few things senior citizens should keep in mind when choosing equity funds for investment through SIP. Do not opt for high risk funds for investment. Small and medium cap funds investing in four small and medium stocks should be avoided.

You can invest in large cap funds, diversified funds or balanced funds. Any combination of these can be considered. Do not attempt to invest the entire amount you have in equity funds.

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Early retirement is not uncommon these days. Most people are motivated by the freedom they would get from the stress of work to go in for early retirement. But it is only possible for those who are financially independent.

There are many people who want to quit their job before they reach the age of 50 years or 60 years. Many factors prevent them from doing so.

Some may be sceptical whether they have the financial means to do so. In the event of any emergency, it is doubtful whether the existing assets will suffice. The loss of every month’s wages can be difficult for most people to cope with.

The question of what to do after retirement confuses many. It is not easy to sit idle for eight to ten hours every day. The key question is what to do during these times.

Retirement can lead to an ‘identity crisis’. While working, he or she will have an ‘identity’ in the community related to the area in which he or she has developed. Many worry that it will disappear with retirement.

Social ties after retirement are not the same as before. Relationships in the workplace can be lost. This can reflect even in friendships. Many people may feel uncomfortable with any magnetism after retirement. Only those who survive such obstacles can make early worming more enjoyable. The first thing is to stop comparing with others. Working eight to ten hours a day may be a joy for others. If living in freedom is your passion then go ahead with the decision.

If you have planned your investments well, the fear of losing your monthly income can be avoided. You would not be frustrated if you can meet your monthly necessities with proper planning of pension. You investment is not just lying around; you are also reaping benefit from it.

One should plan ahead at least two years before retirement. Wealth needs to be assessed to see if it is adequate for monthly expenses after retirement. It is up to you to decide how much money you will need in future to maintain your current lifestyle. Plan your life after retirement.

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