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Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.
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1.No-cost EMIs
No-cost EMIs are the rage this season, with e-commerce companies, lenders and retailers offering such options. For example, you can buy a mobile phone worth Rs 50,000 using this option and repay this loan in 10 equal installments of Rs 5,000 each. These are triple zero schemes where there is no processing fee, down-payment or interest payout involved

However, there are no free lunches. The Reserve Bank of India (RBI) had, in fact, banned 0% EMI in 2013, stating that such offers merely served the purpose of alluring and exploiting vulnerable customers. Since there cannot be an interest-free loan, there cannot be a no-cost EMI. The cost is built into the sales price. If you were to make an upfront payment, you could be offered a discount, which would not be the case when you opt for EMIs.

Then, there could be online offers where the sales price is the same irrespective of whether you are making an upfront payment or in installments. In such cases, you need not be concerned. The required adjustments (built-in discounts or interest charges) will be made in the invoice at the back-end by the merchant. The cost is typically borne by the brands in such cases. The lending partner will recover the cost of extending a loan from the brands. This is also termed subvention fee.

Before making a choice, enquire whether you can get a discount instead of the no-cost EMI offer. Also, find out if you need to make an upfront payment before the rest of the amount is converted into EMIs.

2. Low-cost loans
No-cost EMI offers apart, retailers and lenders also offer loans with interest free periods. Enquire whether there is a processing fee involved. Usually, it is around 2%. This option is useful for borrowers who do not want to lock-in their money. For the convenience of spreading out the cost of say an electrical appliance worth Rs 50,000 over 10-12 months, Rs 1,000 (2% of the price) is a relatively affordable amount to pay in absolute terms. Also, ascertain whether the ‘interest-free’ period comes with an expiry date. Typically, low-value purchases come with an interest-free period of 15 days, post which an interest is charged.

3. Cashback offers

The key clauses to look for while availing a cashback offer are the maximum cap, minimum spend and the effective date. Also, read the fine print to understand how the minimum spend will be computed. “Let’s assume the minimum spend is Rs 3,000. The offer could be applicable to three purchases aggregating Rs 3,000 during the sale or only to a one-time purchase worth Rs 3,000. Both models exist.

An instant cashback, applied at checkout while shopping online, is preferable to one credited after two or three months. Similarly, a 20% cashback may look attractive, but not if it comes with a ceiling of say Rs 1,500 when your total spend is Rs 50,000. If you are using a credit card to pay, there could be a clause that says the cashback could be rolled back if card bills are not cleared on time.

4. Subvention schemes
A tripartite agreement between a developer, lender and borrower, this allows the latter to shell out 10-20% of the total cost initially. The EMIs are deferred till possession or a specified date, making houses more affordable. While the National Housing Bank has barred housing finance companies from participating in such arrangements, banks face no such restrictions. This apart, several builders have come up with their own versions of subvention schemes where the buyer has to book the flat after paying 5-20% of the agreed price. The rest is to be financed after possession. While these structures boost buyers’ affordability, the costs are 7-8% higher than regular rates. If affordability is not a concern, find out if you can negotiate an upfront discount on the price.

5. Freebies with home purchases
Developers shower freebies like modular kitchens, air-conditioners, and semi-furnished apartments to entice buyers. However, it is wise to drive a hard bargain for straight discounts on the rates instead. Most developers have not announced hard discounts (officially notified and applicable to all) during this festive season as there are several factors preventing them from doing so.

This year developers are offering ‘effective’ discounts by way of waiver of GST or even stamp duty and registration charges. For home-seekers, this will result in cost reduction of 5-12%. However, if you are a genuine home buyer, you should try harder to get the price lowered. Developers may extend direct discounts to buyers showing serious intent to seal the deal.
Income tax related changes announced in the Budget usually come into effect from April 1. However, since the full Budget for FY 2019-20 was presented in July this year after the general elections, there are certain tax changes that will come into effect from September 1, 2019.

Here are those main changes in tax laws that will come into effect from September 1

1.TDS on additional payments made when purchasing immovable property

From September 1, while buying a property, you will have to include the payment made for other services or amenities such as club membership fee, car parking fee, electricity and water facility fee and so on when computing the amount paid for the property for the purpose of deducting TDS. Previously, tax was deducted by the buyer from the payment made for the purchase of property. However, other payments such as club membership fees etc. were usually subtracted from the total consideration to compute the amount of TDS. The primary reason for this stems from the fact that 'consideration for immovable property' was not defined properly in the Income Tax Act. Remember, the TDS will continue to be deducted at the rate of one per cent if the value of the property exceeds Rs 50 lakh.

2.TDS on cash withdrawals from bank account

Cash withdrawals exceeding Rs 1 crore on aggregate basis during the year from an account held with a bank, cooperative bank or post office will invite levy of TDS from September 1. The move is aimed at discouraging large cash transactions and also to promote a less cash economy. A new section 194N has been inserted in the Income Tax Act which defines that TDS will be levied at the rate of two per cent on cash withdrawals made from the account.

3.TDS on payments made by individuals and HUFs to contractors and professionals

From September 1, individuals and HUFs making a payment to contractors and professionals exceeding Rs 50 lakh in aggregate per annum will also be required to deduct TDS at the rate of 5 per cent. This would mean that individuals making payments over this limit for house renovation, wedding functions or for any other purpose to a single professional in a year would be required to deduct tax at the time of making the payment. A new section 194N has been inserted in the Income Tax Act for this purpose. However, in order to provide ease of compliance, individuals and HUFs, deducting the tax will not be required to obtain TAN (tax deduction account number). The new law will be applicable to all the payments made by the individual whether for personal use or for business purposes (in case their accounts are not required to be audited.)

4.TDS on non-exempt portion of life insurance

If life insurance maturity proceeds received by you are taxable in your hands, then TDS will be deducted at the rate of five per cent on the net income portion. The net income portion is defined as the total sum received less of total amount of insurance premium paid.

Currently, proceeds received at the maturity of a life insurance policy are exempted from tax if the annual premium paid does not exceed 10 per cent (20 per cent in case of insurance policies sold prior to April 2012) of the sum assured.

If the maturity proceeds received by an individual are taxable, then TDS will be deducted only on the net income portion and not on the total amount paid. Remember TDS will be deducted at the rate of 5 per cent in case the taxable proceeds, i.e., net income portion exceeds Rs 1 lakh. Prior to this TDS was deducted at the rate of 1 per cent on the total amount paid.

5.If PAN is not linked with Aadhaar

As per rules existing prior to changes announced in July Budget 2019 PAN would have become invalid if not linked with Aadhaar by a specified deadline. This would have meant that in case of a person's PAN becoming invalid, it would be treated as if the person never had a PAN.
v However, to protect the validity of previous transactions done using the PAN, Budget 2019 changed the rules such that PAN will become now become inoperative but not invalid if not linked with Aadhaar by the specified deadline.

However, the government is yet to clarify the rules regarding what will happen if the PAN becomes inoperative if not linked with Aadhaar.

6.Inter-changeability of PAN and Aadhaar and mandatory quoting in prescribed transactions

Another important announcement in Budget 2019 was inter-changeability of PAN and Aadhaar. However, Aadhaar can be quoted in lieu of PAN only for certain prescribed transactions. Though the new law comes into effect from September 1, the government is yet to notify the certain prescribed transactions.

1.Identify your Starting Point

If you don't know where you are financially, it can be challenging to plan for where you want to be next year, five years from now or decades down the road in retirement. That's why it is important to identify your starting point. Calculating your net worth is the best way to gauge both your current financial health and your progress over time. Net worth is the amount by which assets exceed liabilities and can provide a wake-up call if you are off track—or confirmation that you are doing well. Many people get into financial trouble by spending too much on wants and don't have enough left over for their needs.

2.Set Your Priorities

Creating a list of needs and wants can help you set financial priorities. Needs are things you must have in order to survive: food, shelter, clothing, healthcare and transportation. Wants, on the other hand, are things you would like to have, but aren't necessary for survival. Knowing the difference between the two, and being mindful of the distinction when making spending choices, goes a long way when it comes to your financial wellness. You'll need to rank your needs as well as your wants in order to clearly define where your money should go first. This not only applies to your current expenses, but to your goals—which can also fall into the categories of wants and needs.

  • Assessing your assets (and your debts) is a great way to start preparing for retirement.
  • Tracking your spending and setting up a budget are good ways to keep on top of your money.
  • Don’t count on social security alone to support your retirement. Investigate retirement vehicles such as IRAs, 401ks, and other investment options to help fund your future.
3.Document Your Spending

Most people could tell you how much money they make in a year. Fewer could state how much money they spend, however, and fewer still could explain how and where they spend it. One of the best ways to figure out your cash flow—what comes in and what goes out—is to create a budget, or a personal spending plan.

A budget forces you to put down on paper all of your income and expenses, and this can be an indispensable tool for helping you meet financial obligations now and in the future. As an added bonus, a budget can be a real eye-opener when it comes to spending choices. Many people are surprised to find out just how much money they are spending on superfluous goods and services.

4.Pay Down Your Debt

Most people have debt—mortgage and auto loans, credit cards, medical bills, student loans, and the like. What makes living with debt so costly is not just the interest and fees, but because it can prevent people from ever “getting ahead” with their financial goals. It can also be an emotional drain on individuals and families.

While the best strategy is to avoid getting into debt to begin with (by making practical spending choices and living within one’s means), there are strategies to pay down and get out from under the debt people have already acquired. 

5. Secure your Financial Future

Due to dire financial circumstances, many people adopt “I’ll never retire” as a retirement plan. This approach has several major flaws.

Firstly, you can’t always control when you retire. You could lose the job that you’ve held for decades, suffer an illness or injury, or be forced to care for a loved one— any of which could lead to an unplanned retirement. Secondly, saying you won't retire is often an excuse for those who don’t want to spend the time and energy to develop a real plan, or who simply don’t know how.

Learning more about your retirement options is an essential part of securing your financial future. Even if you can’t save much, every bit helps. Once you've developed a plan, you could end up making better spending choices now that you have a goal in mind.

The Bottom Line

Even though you may have completed your education, you're not done acquiring financial literacy. It's best to be proactive. Even if you didn't learn money skills at home or at school, it's never too late to catch up. Re-aligning your focus and adjusting your finances now will make all the difference for your future. 

Life is full of exhilaration and risks at the same time. Some unforeseen situations and uncertainties can sometimes put you in both financial and emotional stress. If you want to safeguard your belongings like your car, two wheeler, home, then, buying a general insurance policy is a great option to cover the financial loss. Financial loss arising out of natural calamities, accidents, casualties apart from death, legal actions and thefts, are also covered under various general insurance policies.

Type of General Insurance Policies to Cover Other Diverse Assets:

1. Health Insurance Policy

Due to the sedentary lifestyle, buying a health insurance has become inevitable for everyone. A mediclaim policy would provide you cover from hospitalization expenses and also expenses churning out of diagnostic and screening tests before the medical treatment. Once you have assessed the inclusions and benefits, coverage and premium and then pick a policy meeting the requirements and requirements of your family.

If you want, you can get coverage for every member of your family under one plan in a pocket-friendly manner, with a family floater health insurance plan. And if you have elderly parents then you can buy health insurance for senior citizens. Moreover, every health insurance company has network hospitals under their panel. You can avail the best medical treatment without paying any cash, in a cashless facility, thus saving you from the last minute financial crisis. You can always pick hospitals which are in your vicinity and within your access.

2. Motor/Vehicle/Auto Insurance Policy

The smartest thing to secure your vehicle financially is with a vehicle insurance policy. It would recompense the expenses in case your car meets with an accident, or is stolen or is damaged due to any natural calamities such as floods, earthquake, etc. Under the purview of the Motor Vehicles Act of 1988, it is mandatory for all the vehicles plying on the Indian roads to be secured with a vehicle insurance policy. Vehicle insurance is of two types - Third Party Insurance and Comprehensive Insurance. Third party cover is essential; however, you can choose the type of coverage you require based on your requirement.

3. Travel Insurance Policy

Travel insurance covers your flight delays, baggage loss, hijack distress, medical emergencies also. There is a travel insurance plan for all – be it for international or domestic travel, travel for family, students or senior citizens. While planning your next vacation, do remember to buy a travel insurance for both leisure and business travel. 

4. Home Insurance Policy

It’s easier to secure your home against any man-made or natural catastrophes with a home insurance policy. You find your home to be the most peaceful and serene place. Under situations like fire, theft, flood, strike, riots, burglary and so on. You can check out home insurance, primary home insurance, and premium home insurance and super home insurance.

5. Commercial Insurance

To cover business-related risks, businessmen and owners of big enterprise always prefer to stay secure by buying a commercial insurance policy. It offers insurance cover to different business related requirements for different industries including aviation, telecom, infrastructure, property, marine, pharmaceuticals, energy and so on. In events of burglary, machinery breakdown, housebreaking, risk arising from contractor’s end, the insurer would bear the financial loss. There are an array of other general insurance products such as corporate insurance, crop insurance for farmers, fire insurance, property insurance and likewise. You can buy any of them based on your needs and requirements.

In a Nutshell:

Life is uncertain and so are the risks associated with. For a hassle-free execution and easy claim, you can understand different policies from your advisor. It’s always better to understand and then zero down on one, working best for you.
Please mark all your queries / responses to
Information provided on this newsletter has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. and its affiliates, information providers or content providers, shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this newsletter, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. , its affiliates, information providers and content providers shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this newsletter.