"Knowledge is Power as Long as it is Shared". Here I'am to share the maximum I can with everyone, right from my experiences, interests, fictions, professional skills, to facts I have explored with time. Will be sharing Income Tax, Company Law, Goods & Service Tax (GST) and Commercial Tax blogs. Learn techniques to do Smart work & stand out of the crowd. Mesmerise your mind & soul with lovely stories. The goal is to inculcate the urge of learning & growth.
Saturday, January 14, 2023
डॉक्टर डायन
Sunday, January 23, 2022
How to improve your CIBIL or Credit score
How
to improve your CIBIL or Credit score
Business
and personal needs drive a person to reach out for a loan. But getting loan is
not an easy task as it seems. You need to have a good credit rating for getting
a loan apart from your financial stability. The biggest fact about this lending
industry, which I have learned in all these years of my experience. Is that loan
is not provided to the needy, it is provided to the greedy. One who has the
capability to repay it. Apart from your financial papers, net worth
calculation, income proof, CMA and income source, the think which plays a
crucial role in the sanction and approval of your loan is your “CREDIT SCORE”.
You
must have seen or evident many occasions where you come across the testing of
your Credit Score like, “Get your Credit Score” or “Test your Credit Score”.
Many of you must have got your loan application rejected or declined due to poor
credit score. Now the biggest question which is right now popping in your mind
is, “what is the Credit Score”, “Why is it so important for loan approval” and
“how to improve it” etc.
Credit
Score or CIBIL
Credit
Score is the rating provided by a credit bureau which denoted your credit
worthiness and potential to repay the loan or debt. It provides the estimate to
the bank or financial institution about your capability to repay their loans.
It’s a three digit score. It ranges from 300 to 900. The higher your score is,
the better your rating and chances to get the loan sanctioned. In India mostly
credit score is been addressed as CIBIL or CIBIL Score which is not official
correct but due to daily practices it’s apparently considered correct. In India
there are four concerns or in correct words, bureaus authorized by RBI (Reserve
Bank of India) to provide credit score. Credit Information Bureau (India)
Limited [CIBIL] is one of the most preferred credit bureau that is the reason
why credit score in India is referred as CIBIL Score or CIBIL.
Credit
score is only for individuals or persons. For others like company, firm,
business entity and even including individuals the credit analysis is called as
credit rating.
Anybody can check their credit score from various websites available.
Importance
& Benefits of Credit Score
A
good Credit Score provides many privileges and benefits to an individual. Every
finance seeker desires to have a high Credit Score. A credit score above
700-750 is considered good score. The importance and benefits of high credit
score are :-
1. Easy
loan sanction – the people with good credit score gets the loan sanctioned
easily. The loan sanction process starts with the checking of credit score. A
person with good credit score has the higher chances of getting the loan
application approved and loan sanctioned. A bad credit scope gets the loan
application rejected right at the face.
2. Get
low interest rates – the person with good credit rating may get competitively
low interest rate as the banks and financial institutions try to capture the
prospective client. A person with good credit rating has a high negotiating
power to negotiate and lower their interest charging rates.
3. Charges
waiver or decrease – the person with good credit rating may get financial
charges and other charges waiver or decrease which results in financial cost
saving in complete life cycle of loan. Even such category of persons may also
negotiate with the bank or financial institution to waive their charges.
4. Lower
processing Fee – the person with good credit rating may lower or decrease the
processing fee over their loan after negotiation.
5. Higher
and more rewards – In case of credit card, the person with better credit rating
gets more rewards likes cashback, discount, coupons etc.
Credit
Rating Issuers
In
India, credit rating is provided by four Bureaus authorised by RBI (Reserve
Bank of India). We will not go in detail about these
1. Credit Information Bureau (India)
Limited (CIBIL)
2. Equifax
3. Experian
4. CRIF High Mark
How
to improve Credit Rating
This is the most crucial part to discuss. With the help of this knowledge anybody can improve their credit rating. The following will help to improve your credit rating:-
1. Use credit card regularly – If you have credit card use it regularly. If credit card is not used properly then the credit rating is affected as it shows low financial needs and utilisation.
Here is a trick to show your credit card limit usage. If you are not using credit card for shopping or other lucrative purchases, pay your routine bills by your credit cards and get its usage reflection in records.
2. Pay you loans and credits before due date – Pay your loans and credit cards dues a little before their due dates. It reflects the healthy money flow. And holding the payment till the last date degrades your credit track record.
3. Don’t check score frequently – Mostly it is recommended to check your credit score frequently but I have seen in the past that individuals with poor credit score use to frequently check there credit score and it resulted in further decreasing their credit score. So if your credit rating is low don’t check it very frequently. First build a little sound investment record and then check at least after 6-8 months. For better results try to file a good income tax return in the mean while time (between this 6-8 months gap).
4. Diversify your investment portfolio – As now a day’s your investments accounts are linked with Aadhar, your investment details are available at a common pool for access to authorised authorities like credit bureaus. People with diversify investment portfolio have better credit scores always. So just won’t keep your investments in fixed deposits or saving accounts but diversify. Purchase shares, securities, bonds, mutual funds other than just solid assets like real estate.
5. Regular Income Tax Return filing – Income Tax Return is the source of financial record for every authority like Income Tax and credit rating bureaus. The financial records are traced by these bureaus from the income tax returns filed by you. People with no income tax return filing record mostly have poor credit rating.
6. Longevity of Credit life – People with sound and long credit life record like running term loans in the past and timely payments, have better credit score. Take your credit usage and repayment seriously. And if you are not getting long term loan funds then try to get short term small credits for your various usages which will start building your credit usage track record.
7. Avoid defaults – Bank and financial institutions stay away from defaulters. Yes it is obvious that no one knowingly does any default but many times our ill-planned financial cycle or calendar invites payment default. Always run with cover transaction to ensure fund availability for loan payment on due date.
8. Get a credit card – Yes it is correct. Your credit card can help you to get a good credit score. So if you won’t have a credit card get one soon. As it is evident that people with credit card and its good track record have good credit worthiness.
9. Balanced Credit Mix – It is important to even diversify and maintain your credit portfolio. Have a balanced loan structure which reflect an appropriate usage and finance cost maintenance (interest and charges). Use long term funds for long term usage and short term for short term usage. Use specialized fund for specific purpose, like home loan for housing finance etc. All this builds a good credit score.
Do’s
and Don’ts
In
case of building an attractive Credit score. You should :-
Do’s
- Have
a credit card.
- File
income tax return regularly.
- Diversify
your Investment and loan (Credit) profile.
- Keep
Loan defaults at bay.
- Check
your credit score atleast once in every Six Month.
Don’ts
- Avoid
late payment of loan installments.
- In
case of default, negotiate with your lender to have an out of court settlement
& avoid to be listed in defaulters list.
- Don’ts
associate yourself in joint loans with financially unsound individuals and
entities.
- Avoid
providing guarantee for financially unsound individuals and entities.
- Avoid getting to many loans.
Here is my best try to provide you the information about credit score and ways to improve it from my experience and knowledge. Friends I‘am putting my strongest efforts to provide you all the details in simplest language, please show your support and follow my blog. Do share with your friends and family to spread the knowledge.
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The above blog is purely for educational and guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.
Wednesday, November 10, 2021
Introduction to Mutual Funds
Introduction to Mutual Funds
Mutual fund is a hot topic always for people, but due to lucrative returns in the pandemic now everyone wants to understand it. “Mutual funds are subjected to market risk” this phrase surmounts our mind when we think of mutual funds. The reverberance of risk associated with mutual funds acts as a hurdle for investor to take the first step towards Mutual fund investments. This risk factor over-shadows the benefits in lime light. With this blog I’am putting an effort to explain you what is mutual fund in simple language. I will explain you the benefits and cons of mutual funds and types of mutual fund. Here is the simplest guide to mutual funds. So let’s start learning.
What is Mutual Fund ?
Mutual means shared by two
or more people. Fund stands for money collected. Mutual Fund is a pool of
investment created by the mutual fund trust to be used for investing
further in securities, bonds and debts etc. This investment is managed by
experienced fund managers for getting maximum benefits in the form of incomes. This
benefit or income from the fund, so invested by the Assets Management Company are
distributed among the investors in the form of returns.
Why to go for Mutual Funds ?
We do investment in
different assets & securities. Investment provides us an additional income
and future security. Everyone tries to diversify their investment portfolio
which involves investing in securities, shares, bonds and debentures. But if
one wants to invest in securities, bonds and debts, they need to do lots of
research to avoid loss and have desired returns. This involves a lot of skills
and knowledge as well as time to time monitoring is necessary to avoid any uncertainty. Mutual fund Company does the same think on your behalf from the fund
invested by you and others. As mutual funds are managed by experts you can
relax and concentrate on your work and your funds will keep earning.
Terminologies
In order to understand
Mutual Funds better lets understand the few terminologies and abbreviations
most used in the mutual funds operation and mechanism.
1. Sponsors – Mutual fund is formed in the form
of Trust, established by Sponsors. Sponsors are like regulators of mutual
funds. They appoint AMC for the management of Mutual Funds. The very well recognised mutual fund trust is UTI (Unit Trust of India). There may be one sponsor or one sponsor along with other corporates to form a mutual fund trust.
2.
AMC – Assets Management Company. This company
manages the investment of the investor and invest this fund money in securities and
bonds. Mutual fund is been formed by sponsors and they hire AMC’s to handle the
investment of investors. AMC do all the
work to management the mutual fund like investment, marketing,
accounting and other functions. They charge fees for their service from the
investors. Example of AMC are SBI Mutual Fund, HDFC Mutual Fund.
3.
AUM – Asset under management. It is the total
asset which the AMC manage for the mutual fund. The value of the securities,
debts and bonds less the liabilities of the mutual fund is its AUM.
4.
Fund Manager - AMC allocated proper fund manager for a
particular mutual fund to manage and plan its investment and evaluate its
performance. Fund manger is the proper person who manages the portfolio of
mutual fund scheme. For example – Mr. Prashant Jain is the Fund Manager of HDFC
Balanced Advantage Fund.
5. NAV – Net asset value. It is the market value
of the securities held by the AMC under the respective scheme of mutual fund.
It varies on day to day basis as the market fluctuates. But the NAV is same for
a scheme throughout the day, as it is valued at the end of the trading day. For
example HDFC Balanced Advantage Fund - Growth Plan - Direct Plan : NAV on
09/11/2021 : ₹ 303.8310.
Benefits of mutual funds
There are varies benefits of
mutual funds. This is the reason now a days it the prime choice of investors.
1. Professionally managed – Mutual funds are
managed by fund managers. Fund managers are expert in their work and this
provides the expert level performances to the mutual fund. Investor doesn’t
have to personally get involved in the investment decisions.
2. Tax Saving – ELSS (Equity linked saving
scheme) is the type of mutual fund type which qualify for deduction under Sec.
80C of the Income Tax Act. Will discuss this in detail below.
3. Liquidity – Mutual provides you easy entry
and exit options. There are open end schemes which provide high liquidity.
4. Generating Income & High Returns - Mutual
fund can be used for a generating passive or additional income. Mutual may
provide high returns as when the stock market is high the returns on mutual
funds are high. Diversification – Investor can diversify his investment
portfolio by investing in mutual funds. In place of personally investing in
different assets or securities one can invest in mutual fund which has various
securities in its scheme structure. Diversification helps to achieve a balanced
investment and safe returns in future.
5.
Time Saving – A person can concentrate on his
main business or profession and side by side invest in mutual funds to get an
additional income as Mutual funds are managed by Fund Managers.
6. Easy Accessibility – Now one can very easily invest in mutual funds either directly or through a distributor or discount agent.
I. Mutual fund based on fund scheme
II. Mutual fund based on investment objective
III. Based on asset invested
IV. Special funds
I. Mutual fund based on fund scheme.
There are basically two types of mutual funds based on fund scheme :-
(a) Close ended scheme
(b) Open ended scheme
(a) Close ended scheme
In this mutual fund scheme the maturity period of the mutual fund scheme is fixed. There is a well defined initial issue period within which you can purchase the units of the scheme. Once the issue period is closed, only the already issued units can be purchased or sold. Example - Reliance Close Ended Equity Fund - Series A – Growth, etc.
(b) Open ended scheme
III. Based on asset invested
Here the mutual funds are categorised on the basis of the securities in which they invest. Based on asset invested by mutual fund scheme there are three types of mutual funds :-
(a) Equity fund
(b) Debt fund
(c) Hybrid funds
These fund scheme invest in special kinds of asset as per the investment plan or purpose of the Mutual Fund scheme. They can be categorised in four types :-
(a) Index funds
(b) Sectoral funds
(c) Regional Funds
(d) Tax Saving Funds
(a)Index scheme
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The above blog is purely for educational and guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.
Saturday, October 23, 2021
Flipkart Pay later - benefits, uses and activation
Flipkart Pay later : benefits, uses and activation process
Managing finances is a day to day activity now a day. As the inflation is rising worldwide, people are looking for alternative ways to plan their monthly bill payments. There is limit in everyone’s purchasing power but certain unalarmed needs knock everyone’s door now and then.
Diwali is at its arrival and
we are all geared with our shopping list. Diwali is the biggest festival in
India. Festival season is something which add lots of gifts to our shopping
basket always and deep down in our minds everyone wants festivals to be full of
gifts, sweets, new cloths and latest products. But the question is, “How to get the extra money to pay” or "Loan & credit to pay".
Look honestly not all of us
have any access to any credit facility like short term loans, credit cards etc.
And no want to bear the exhausting, complicated, time taking process of loan
approval. Loan approval in itself requires a lot of paper work which is not a
cup of tea for a common person like a student or a homemaker. In addition to
this, short term loans and credit facilities (like Credit Cards) require paying
charges and interests on regular basis.
So here I’am with an easy
solution for all these issues. We are all now very much familiar with online
shopping and e-commerce platforms. So why not to use these platform facilities
to plan our finances. Flipkart is out
with a very useful feature of “Flipkart
Pay Later”. Its quite old now but still, people are not much aware of it and its benefits.
Flipkart Pay later
Flipkart Pay Later is a kind
of credit facility or loan facility offered by flipkart in association with IDFC First Bank, in
which you can pay after the purchase of your product. The payment system is
basically of two different types i.e. single
payment in the subsequent month (Pay
Next Month) or EMI payment. Flipkart Pay Later (EMI) is currently available
for select products where transaction amount is greater than ₹ 2,500.
This facility can also be
used with their partner platforms such as Myntra and 2GUD. Flipkart Pay Later
(EMI) is not available on their partner platforms. But my main emphases is over Pay
Next Month because it does not charge any interest.
No interest, hidden Charges and processing fee
The best think about Flipkart Pay Later in that it won’t charge you any processing fee and interest for the facility. Flipkart Pay Later (EMI) does incorporate interest element in its EMI (every month installment) but in Pay Next Month there is no interest charged. There is a nominal usage fee of ₹10/- will be added to the customer’s dues if the credit usage for the month is higher than ₹1,000/-.
Benefits
- Instant credit upto ₹ 70,000.
- Few minutes application processing time.
- No documentation i.e. e-KYC ( Electronic Know Your Customer)
- Credit for a month without any charge (except ₹ 10) like annual maintenances, service charge, interest charge etc.
- Affordable EMI without any loan approval or credit approval process.
- Easy adjustment of refunds on cancellations from dues payable.
- One bill payment of all purchases made last month or previous months. So individual record keeping.
- Any time cancellation or surrender of the facility after payment of all dues.
- 24*7 customer support.
Penalty
We talked about all the pros, now is the point to discuss the cons. As it is a financial credit or loan so conclusively in case of default, there will some penalty too. Penalty will be charges if you defaulted to pay or failed to pay the due amount or minimum amount due (partial payment). Penalty will be calculated on the outstanding dues (includes outstanding principal amount, interest or late payment panality) as on 5th of each month.
Bill Amount (in ₹) Late Payment Charge Amount (in ₹)
100-500 60
501-1000 125
1001-2000 175
2001-4000 300
4001-5000 410
5000 & Above 600
Minimum amount due is the sum total of "10% of your Pay Later purchases" plus "Convenience fee for the partial payment option" plus "Any rolled over (or unpaid) amount from the previous month(s)" plus "Any late payment charges from the previous month(s)".
Convenience fee is calculated on the amount you carry forward to the next month.
Carry
Forward amount to next month
Convenience
Fee for Partial Payment
Late
Payment Charges for payments after the due date
<= ₹ 500
₹ 60
₹ 60
₹ 501 - ₹ 1000
₹ 60
₹ 125
₹ 1001 - ₹ 2000
₹ 120
₹ 175
₹ 2001 - ₹ 4000
₹ 240
₹ 300
₹ 4001 - ₹ 5000
₹ 330
₹ 410
₹ 5000 & above
₹ 475
₹ 600
Carry
Forward amount to next month
Convenience
Fee for Partial Payment
Late
Payment Charges for payments after the due date
<= ₹ 500
₹ 60
₹ 60
₹ 501 - ₹ 1000
₹ 60
₹ 125
₹ 1001 - ₹ 2000
₹ 120
₹ 175
₹ 2001 - ₹ 4000
₹ 240
₹ 300
₹ 4001 - ₹ 5000
₹ 330
₹ 410
₹ 5000 & above
₹ 475
₹ 600
How to Avail and due payments
One
can activate Flipkart Pay Later by Aadhaar OTP-based e-KYC (Electronic Know
your client) which is valid only for 12 months from the date of activating your
Pay Later account.
For this you have of to
visit the Flipkart Pay Later section under 'My Account' and refer to the ‘Pay
Later’ section in the Flipkart mobile Application or website.
The due payments are to be
done by the 5th of the subsequent month(s).
How to activate
It is a three stage process.
First stage is the Pan Activation. Second stage is the Aadhaar OTP-based e-KYC.
Last stage is the Bank confirmation.
Step 1 : In the Flipkart App
or website. Login and go to Pay Later section under 'My Account' or simply you can search
Step 2 : Enter your PAN
(Permanent Account No). Click on “Activate Now” button.
Step 3 : Verify Aadhaar :
Fill in your Aadhaar no and verify by the OTP received in the registered mobile
with Aadhaar. Click on “Verify” button.
Step 4 : Fill in the OTP
(one time password) in the pop up dialogue box.
Step 5 : Review and submit
your application. Check your details, name, address etc.
Step 6 : Verify your Bank
account by filing your UPI Id or Bank Details. Click on “Confirm and Submit”
button.
Step 7 : Rupee one will be
credited in your bank account linked with Aadhaar.
Step 8 : Your eligibility
will be checked.
Step 9 : Now your will be
informed about your credit limit for Flipkart
Pay later (Pay Next Month).
There is also a offer on the first purchase by using Flipkart Pay Later, you can get 15% off subject to the maximum of ₹150/-.
If
you want to see the complete process, then you can visit the my youtube link :
For Flipkart Pay Later (EMI) your have to check on individual product eligible for it and then proceed. For more details you can visit Flipkart official website and mobile application. I hope this blog helps you out to finance your Diwali shopping plans. I tried best to provide you the best information.
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The above blog is purely for educational and guidance purpose. It's just the reflection of the author's personal experience and judgment. The author has just provided the general information & understanding and its not at all an alternative of any legal advice or practitioner. The content stated in the blog should be used by the reader at his own discretion and sole responsibility. The content of the blog can be only used for any other document, write-up, article, blog and any written or printed material whether on paper or digitally in any form, with the prior permission of the author.
सफर और मंजिल
सफर और मंजिल ये मेरी पहली सोलो ट्रिप (अकेल सफर) होने वाली है। इतनी मुश्किल से इस सफर के लिए सब प्लान (प्रबन्ध) किया है और निकलने को उत्सुक ...
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