Facts about e tax payment you need to know

Taxes are revenues that are earned by the government. A working citizen of this country has to pay taxes which are used for various government expenditures and also for the proper functioning of the various government machineries. The IT department of the government of India has allowed e-tax payment for people having online bank accounts. Therefore, people in our country can pay income tax by means of a challan through banks and also via the e-payment method. Thus, the Income Tax department has made it extremely easy for people to file their taxes. People no longer need to wait in long queues to make tax payments but can do so from the comfort of their homes.

• Eligibility: All taxpayers can pay his/her income tax online provided he/she has an online banking account with an authorized bank. However, only a few public as well as private sector banks have been authorized to receive e-tax payment by the IT department.
• However, there are two categories of people who are specifically required to pay taxes via the online mode only. They are all the corporate assesses and all assesses who come under section 44B of the Income Tax Act.

Furthermore, there are a number of benefits of paying income tax online. They are:

• Instant transfer of funds.
• You receive a detailed receipt for the taxes paid as soon as the amount is deducted from the online bank account.
• You can download and keep the receipt and the challan for future references.
• The details of the payment are directly sent to the Income Tax department and this reduces the workload of banks as they do not have to do enter the data again.
• You are able to pay taxes from the place and time of your choosing.
• You can also log on to the official website of the Income Tax Department to find out if your tax amount have reached them or not.

Some of the banks which have been authorized by the Income Tax Department to receive e-tax payment on its behalf are: UCO Bank, Vijaya Bank, Oriental Bank of Commerce, State Bank of India and its affiliate banks, ICICI bank, Bank of India, Axis Bank and Allahabad Bank.

The required challan number for paying income tax online is ITNS 280. Similarly, after successful payment of taxes, you will receive an acknowledgement containing the CIN or the Challan Identification Number. This can be used to verify the status of the e-tax payment.

The IT department has also made it mandatory for assesses who have paid over 1 lakh rupees as service tax in the previous year to pay service tax via the online mode. This regulation has been in effect since 1st January 2014.

What is the difference between IMPS and other transfer services?

Online money transfer is a very important banking service that everyone makes use of some point of time or the other in their lives. For parents whose grown children are working or studying in a different city or country transferring of money online from one party to the other is a rudimentary and routine matter. Mainly banks across the country provide the following kinds of online money transfer services; Immediate Payment Service or IMPS for short, National Electronic Funds Transfer or NEFT for short and Real Time Gross Settlement or RTGS for short.

Each of the transfer services mentioned above have different monetary values for minimum transfer, different speeds, have different availability and several other features such as the processing fee levied on the online transfer.  In times of dire need and emergency a quick and easy transfer service is of the utmost importance. In such a case IMPS is the answer to your prayers.

Other transfer services such as NEFT is carried out in batches and is not subject to availability for use during bank holiday periods and on Sundays. NEFT allows for small value transfer which can be as low as one rupee with nominal processing fee charges. The charges are pretty standard provided the two banks (the sender bank and the receiver bank) are NEFT enabled and are part of the huge network. To sum up the features of NEFT transfer, it has no upper limit of transfer. This makes NEFT extremely cost-effective and enables for extensive usage by people when it comes to online transfers.

RTGS has a set minimum as well as maximum transfer value which range between two rupees to ten lakhs. The RTGS transfer facility can be made use of only when the two banks are RTGS enabled. RTGS transfer service is mainly made use of when there is a need for high value transfer instantly. Due to the quick accessibility and speedy transfer the processing fee charged for the transfer is quite exorbitant.

Now when we come to IMPS, it is quite beneficial for most users as it balances somewhere between the advantages of a NEFT and RTGS transfer service. Perhaps one of the biggest perks of IMPS transfer service is that it can be made use of 24*7 and is also available during bank holidays. This is a very important factor for a lot of people who suddenly and very urgently need money. IMPS allows for a minimum transfer of one rupee and a maximum of 2 lakhs. The transaction time is immediate and the processing fee is quite low almost on the same ranks as that of NEFT. However, the only drawback is that it is only internet and online banking specific unlike the other two which can be carried out both online and offline.

New updates of the NEFT you need to know

In today’s world there are many people who are living away from home for the purpose of study or work, sometimes in a different city and sometimes in a different country or continent. Also, in the current scenario of globalization people in the world of trade are conducting their day to day business activities with investors or other businessmen located in countries that are strewn across the globe. Sending money or checks through mails are a risky and dicey affair. When it comes to the financial aspects security is always an important factor. Online money transfer from one bank account to the other is how the financial criteria’s are met in such cases. 

The more the ease and speed of the transfer service, the greater the chances of accessibility. NEFT or National Electronic Funds Transfer is a system of money transfer service that provides for one on one transfer.

Latest Updates of NEFT

According to the latest update the features of the NEFT account stand currently as one of the most secured modes of both online and offline payments. NEFT has no minimum or maximum limit of transfer. Any sum of money can be transferred using NEFT service, only the benefactor’s account and the beneficiaries account need to be NEFT enabled. The benefactor can also track his or her transfer details of the National Electronic Funds Transfer via the branch of origin.

NEFT services were always customer friendly as the processing fee charged for each transfer was always quite low. Earlier the NEFT charges levied were Rs. 2.5 for transfers that were less than Rs. 10,000, rupees five for the transfer sum ranging between Rupees ten thousand to one lakh and Rupees fifteen for money transfers ranging between one lakh to two lakhs and transfers ranging above 2 lakhs were charged rupees twenty-five. However, according to the latest newspaper report that came out on November 6th, HDFC bank has made all NEFT and RTGS money transactions free of any charges effective as of November 1st, 2017. In order to balance the weighing scales, HDFC has declared that any other cheque-related money transactions as well as additional chequebook leaves on top of the already existing twenty-five count will get extremely expensive.

Aside from the processing fee part, the other features of NEFT remain constant. NEFT services cannot be availed of during Sundays and on bank holidays. NEFT transfers can be made only between eight in the morning to six-thirty in the evening during weekdays and between eight in the morning and twelve-thirty in the afternoon on Saturdays.

Why business owners must have a current account?

A current account, also known as Demand Deposit Account, is generally used by businesspeople who have a good number of business transactions with the bank on a regular basis. A business, whether small or big, normally does a number of transactions on a daily or even on an hourly basis. Money is continuously debited and credited and there is generally no savings in the account. A current account has an Overdraft facility that allow businesses to pay their customers and clients even when there is scarcity of funds in their accounts. This is almost like a loan but only for a very short period.
Thus it is imperative for business owners to operate a current account and ensure that their businesses function in a hassle-free manner.

The benefits of a current account are as follows:

• This account helps a businessman to carry out his transactions in an easy and time-bound manner.

• It allows a businessperson to withdraw as much as they want from their account. However, banking cash transaction tax may be levied by the government.

• An important benefit of a current account is that helps to differentiate between business finance and personal finance. Complications may arise when a freelancer or the sole owner of a business parks his/her business money in his/her personal account. This is because a sole owner is not a separate legal entity like a company. If the business transactions are carried out in a single saving account, the proprietor may not be able to gauge the state of his/her business if his/her personal finances are healthy. A separate current helps to differentiate between business finance and personal finance as it records the business income and business expenses.

• Operating a current account helps to elevate your credit standings. Creditors and other lenders often check your credit history before deciding whether to provide credit to you or not. In such cases, a letter of recommendation from your bank where you have a current account may go a long way in facilitating a loan from a creditor.

• Most banks offer services like 2 hours phone banking, door-step banking, internet banking and mobile alert services with current accounts. Sometimes, banks also provide a number of free pay orders or demand drafts and also allow a person to transfer funds instantly using NEFT, RTGS and others. Current account holders do not earn any interest and therefore banks provide a number of value-added services to current account holders.

• The overdraft facility is arguably the most important reason why a businessperson needs a current account. This facility allows a person to overdraw the balance in his account when he/she is short on funds. This is like a short-term loan and the bank may/may not levy interest on this loan.

Smart Facts You Need to Know About the Zero Balance Account

In a growing economy like India, most people manage to save only a small sum of money each month and obviously don't want to be penalized on account of not having a minimum balance in their accounts. Most banks have the account holders maintain a specific amount of balance in their accounts; otherwise, they impose a fine that is deducted from the customers' accounts. Some banks, however, let people open an account on which the minimum balance restrictions are not valid. These accounts are called zero balance savings accounts. Here are the things you should know about a zero balance account where a minimum balance does not have to be maintained.

No Restriction on Balance
The biggest advantage that a zero balance account has over a normal savings account is that no minimum amount of balance has to be maintained. While the amount of the minimum balance may vary from bank to bank, but not maintaining that amount in your regular account will result in a fine that will be deducted from your account. In a zero balance account, there are no such restrictions.

Same Interest Rates
The rate of interest on the zero balance account is same as that on a regular savings account. All normal transactional and non-transactional features are available in this account. You can deposit and withdraw cash at a bank branch as well as an ATM, transfer funds online and avail check book facility in this account just like in a regular account.

Eligibility
According to RBI guidelines, banks are not supposed to levy any restriction depending on the age or income of any individual who wants to open a zero balance bank account.

Limited Number of Transactions
RBI hasn't put a cap on the number of transactions. It is the banks who have come up with this. While there is no restriction on the number of cash deposits that can be made, most banks let the zero balance account holders withdraw cash four times a month, be it a withdrawal at the bank branch or through ATM, RTGS, NEFT, EMI etc.

No More than One Account
You can open only one zero balance savings account in a bank. An existing regular savings account cannot be converted to a zero balance account. If you have a regular account in a bank, you must get it closed within a month of opening the zero balance account in the same bank, otherwise the bank itself closes the regular account after a month.

What are the benefits of the forex card and how can you benefit from it?

A Forex Card or Foreign Exchange Card can make travelling overseas hassle-free for a person. Gone are the days when a person had to go to the foreign currency exchange center every time he/she landed in a foreign country to get local currency. A Forex Card allows the customer to store and electronically transfer money when he is travelling abroad. A person can also use this card to withdraw currency from an ATM located abroad when currency has been loaded into it. Their wide acceptability is due to the fact that they are registered with either the MasterCard network or the Visa network.

Furthermore, such cards can be both single currency as well as multi-currency cards. Multi-currency cards allow a person to seamlessly travel to multiple countries without worrying about cash crunch.

The various benefits of forex cards are:

• Better exchange rates: Usually, loading currencies in this card offer better exchange rates in comparison to purchasing foreign currency as cash. For example, you will usually get an exchange rate markup difference of 50 paise while using a Forex Card. The difference becomes Rs 2 when you buy US dollars with cash.

•  One major benefit of using Forex Cards is that once you have loaded in money in the card, you can stop worrying the fluctuating exchange rates. The money then will become immune to the fluctuations in currency rates and you will be able get full value of the amount that you had put in.

• Needless to say, it is much safer to carry a Forex card that comes with a chip and pin technology than to carry cash. The safeguards that are present in a Forex Card enable you to immediately block it if it is stolen or lost. The balance also becomes frozen and prevents miscreants from getting access to your account. You also have the option of activating a secondary forex card and getting your available balance transferred there.

• Forex cards allow you to carry multiple currencies at once and ensure a seamless travelling experience. Some banks in India allow you to carry up to 16 different currencies like the Australian Dollar, Japanese Yen, Hong Kong Dollars, Euro, US dollars and others.

• You will incur much lesser transaction charges by using a Forex card abroad when compared to the cost incurred while using Debit and Credit cards.

• Dynamic Currency Conversion fee will not be applicable when a person uses a Forex card abroad. This fee is charged when a person uses debit or credit cards for making any transaction.

• Forex Cards have become universally recognized and accepted. It has made life much easier for travelers. It is accepted by most financial institutions, shops, restaurants and other places.

What are the benefits of the ‘Fastag’

Every citizen of India when using the national highways of the country has to pay a form of fee in order to pass the turnpikes which are sometimes owned publicly or privately. These fees need to be usually paid in cash and this policy enables the National Highways Authority to recover the expenses incurred while constructing these roads. When drivers reach the toll tax plazas they need to slow down their vehicles and wait in the formed cues. The drives pay the tax or the fee, are given a token of recognition of their payment and are allowed to pass after it.

This age-old method of paying toll tax changed with the introduction of FASTag. FASTag as the name suggests is basically a tag that is reloadable and allows for subtraction of the toll fees automatically without having to stop at the toll tax plazas. It is a simple, convenient and efficient form of paying tax.
FASTag was introduced by the National Highways Authority of India and the method makes use of a Radio Frequency Identification (RFID) technology.

This technology links the FASTag account of the concerned driver or owner of the vehicle with a prepaid account. A tag is provided by the NHAI which is pasted across the windscreen of the vehicle. The tag is valid for five years after which it needs to be recharged once again. When making the recharge or when paying the amount of FASTag customers of this technology can make the payment through their NEFT and RTGS bank accounts. Customers can also opt for paying with their credit or debit cards or can also indulge in NET banking. This nation-wide Electronic toll collection service guarantees hassle-free driving.

Aside from the benefits already mentioned above, customers by making use of the FASTag feature can cut down on fuel cost which arises as a result of making near non-stop movements. FASTag is not only fuel-saving but also time saving as you no longer need to wait in long ques. It is very environmental friendly as it cuts down on air pollution and guarantees zero usage of paper.

Customers will be able to assess their passage and monetary transactions from their FASTag account by getting a notification on their SMS facility. FASTag is also economically beneficial as there is lowered management at the toll plazas and lowered central monitoring. Many banks across the country are by now FASTag enabled. For both old and new users there is a cash-back of up to ten percent that is being offered of many national banks in the country.