What are the different tax exemptions for the different loans?

Tax exemptions are very common with loans in India. This is very crucial as the tax benefit many times are the difference between actually being able to purchase a product and not being able to buy a product. You should be aware of what type of tax exemptions is available for different types of loans. They include the following:

1. Home loans

These are perhaps the biggest loans which a person takes in terms of an amount of money given. Therefore, tax exemptions are given to both the principal as well as the interest earned. For the principal, up to 1.5 lakh rupees can be deducted whereas for interest earned on the loan, up to 2 lakhs in rupees can be deducted if the construction was completed at least 3 years before the financial year the loan was issued on. However, it must be noted that if the property which the loan is given for has its ownership transferred before its completion, the tax benefits availed to the person who took the loan will be not be considered and he/she will have to pay the full amount of the tax benefits availed.

2. Education loans

Before education loans were unthinkable but now with everyone going to colleges abroad, loans of this sort have significantly increased. There is no upper limit for the money which will be deducted on this kind of loan. However, it can only be used for someone who is pursuing higher education. The loan is only subjected to tax exemptions either if the full loan period is complete or if 8 years have passed since you have taken the loan.

3. Car loans

Car loans are generally cheaper than both education and home loans. This is one of the reasons that individuals who have a salary are not allowed to take car loans in India. The only people who are allowed to take car loans are either businessmen or self-employed. There have been many complaints against this and it may be changed.

4. Personal loans

Personal loans are perhaps the smallest loan in terms of an amount of money that is in question. However, these are only available for a declared business or for interest on loan repayments used for projects such as construction.

However, taking a loan is a very complex matter so it is crucial that you do not take the loan without thinking it through or consulting someone.

Why remit 2 india is the safest way to transfer funds?

Remit 2 India is a service which is similar to Other money transfer services . What it does is it helps to transfer funds from abroad into India. There are a number of advantages of remit 2 India which is why it is gaining popularity and slowly but surely taking over the market from other similar services. Given below are the beneficial features of this service and why should you use them.

1. Minimum transaction fee

The minimum transaction fee is to transfer funds using other money transfer services is a whopping $39 US dollars. However, with remit 2 India it goes as low as $9.

2. Dollar to rupee exchange rates

As compared to other services, the dollar-rupee exchange rate favors the dollar as compared to the rupee. The opposite holds true for remit 2 India.

3. Direct deposit to your receiver’s bank in India

When transferring funds, other transfer institutes does not even send deposits directly to the receiver’s bank account in India, while with remit 2 India this is possible.

4. Doorstep deposits

Remit 2 India can deliver deposits at the doorstep of over 6000 locations across India which other money transfer services may not be able to provide. Therefore, Remit 2 India has a better network of delivery as well which may be pivotal for you as not everyone lives in urban cities like Delhi, Mumbai or Bangalore.

5. Direct debit and standing instructions in the USA

12000 banks across the United States have this facility whereas with other money transfer services there are a lot fewer banks which do this.

6. Direct credit into NRE accounts

In India, this facility is available which you cannot get with other money transfer services .

7. Amount of money sent at one time

Other money transfer services do not allow to send more than $7500 at one time which remit 2 India allows. This will help a lot of people who are sending large sums of money.

8. Rewards and referral plan benefits

Remit 2 India allows the client to access these benefits whereas Other money transfer services does not. This is crucial for many clients.

9. Free personal message with every remittance

Every remittance will allow a free personal message with it when remit 2 India is used. This is absolutely pivotal if you want to say something important.

These are just some of the benefits of remit 2 India, there are much more. While remit 2 India will be slower than other money transfer services, these benefits are much more than other money transfer services offers, therefore, remit 2 India is the safer and most probably better way to transfer money to India.

Are you aware of these hidden secrets of ATM cards?

ATM cards have become pretty common nowadays. However, not everyone knows everything that they have to offer. Here are some hidden secrets about the ATM card that you probably did not know about.

1. It may have fraud and theft protection

ATM cards are at very high risk of getting stolen and even more at risk of having someone else use them for their own gains. Therefore, some banks do offer theft and fraud protection against your ATM card.

2. It can help find receipts

There is a little-known feature which some banks offer to ATM card holders, such as the debit card holder where the holder can get his or her old lost receipts back. All the cardholder has to do is to ask the bank for the receipt and the bank will research and email that receipt to you.

3. It has a daily spending limit

This is a feature which may be a problem as you may not get the money immediately when you need it. However, you can plan ahead for your spending by simply spending a certain amount each day.

4. May get cut off if unusual usage found

This is perhaps the greatest hidden secret about an ATM card. It is especially great because if your card is stolen, the person who is using the huge amounts of money will not be able to use it anymore. This is also rarely done so it does not create too many problems with its inactivity for you.

5. Money exits your account quickly

This is an advantage with ATM cards. Any withdrawals you make from your account will quickly be registered. Therefore, you will be aware of the money that exits the account, and how much balance remains.

6. Linked to savings account

Sometimes a checking account will be linked to your savings account but this is actually a disadvantage as sometimes when the two are linked, someone can drain both accounts if they get the card without the owner’s consent.

These are just some of the advantages and disadvantages of ATM cards that you may not be aware of. It is crucial that you have all the knowledge before taking an ATM card as opposed to a credit card as your circumstances may warrant a feature which may actually not be available and this is important for you.

What are the features of the NRO account you should be aware of?

When a citizen of India leaves, the country he/she becomes an NRI and thus he/she has to open an NRO account, an NRE account or an FCNR account. They differ in several ways and when making the choice as to which one to open. Given below are some salient features which must be noted for each option:

1. Eligibility

An NRO account can be held by anyone outside India unless they are in Nepal or Bhutan. This restriction is not placed on NRE and FCNR account holders.

2. Joint accounts

A joint account can be held with residents in an NRO account. With an NRE or FCNR account, you cannot hold a joint account with a resident; you can only hold it on a ‘former or survivor basis.

3. Currency in which account is used

An FCNR account is the exception in this case as both NRE and NRO accounts use rupees whereas an FCNR account uses Pound Sterling, US dollars, Japanese Yen, Euros, Canadian Dollars and Australian Dollars.

4. Repatriability

Repatriability is the ability to transfer money from one country to another. The main difference between an NRO account and other accounts is that an NRO account is not repatriable except under certain conditions.

5. Type of account

An FCNR is a term deposit account whereas NRO and NRE accounts are fixed deposits, savings, current as well as recurring account types.

6. Period of fixed deposits

For an FCNR account, fixed deposits have a period in between 1 and 5 years whereas with NRO and NRE accounts, fixed deposit accounts have the same conditions that apply to resident accounts.

7. Rate of interest

The rate of interest on NRE and NRO accounts are much more flexible than with FCNR accounts which have interest rate ceilings and floors.

8. Tax on interest income

It must be noted that the NRO account is the only one which has taxable income.

9. Loan amount

Only with an NRO account are there ceilings or limits on how much you can loan.

These are just some of the characteristics of an NRO account. There are many other salient features which must be noted and these features are crucial in coming to the decision of which type of bank account is best for you as an NRI in your particular situation.

Top mistakes you should avoid as a NRI account holder

As one travelling abroad and settling down, you will get a lot of access to financial benefits. One of these includes opening the NRI account. Unfortunately, the Indian government makes a multitude of rules for NRI’s that regular citizens of India do not have to contend with. Many NRI’s do not know about them and then get into trouble when they are told. Avoid these problems, here is some information that can make you aware:

1. Not changing resident savings account to an NRO account
It is a fact that NRIs are not allowed to hold a regular resident savings account. However, many of them still do unaware of this fact. It has been said by law that when an Indian citizen’s status changes to an NRI by FEMA rules, they have to convert their account to an NRI account, specifically, an NRO account. All incomes which you received in India, as well as all incomes you need to pay in India, have to be deposited into this account. You must also give the bank adequate notice that you are closing the resident savings account. Usually, the timeframe given for this is 3 months. You do however have the option to change the bank you have your account in. However, an NRO account has to be opened in the bank you are opening your new account in. An NRO account is repatriable. This means you can send the money you earn abroad back to the resident country.

2. Having a PPF account
A PPF account is another account which NRIs are not allowed to have but often keep. The rules for a PPF account which is already opened are extremely convoluted. The rules for these have changed a lot over the years but the current rules are that you can continue with your PPF account when you are an NRI but you have to withdraw the funds after maturity. However, it must also be noted that repatriation is also allowed from an NRO account and this makes even the PPF repatriable if you have followed the legal rules. It must further be noted that if your PPF is not matured then you can continue to keep your PPF in five-year blocks. This is termed as “extension without contribution”.

These are just some of the complications that NRIs have to face at first. It is crucial that you find a banker who knows the Indian system well and can advise you about the best possible way to proceed with the NRI account such as the NRO account as well as a PPF account.