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Sunday, 25 June 2017

Things you must know about EPF (Employees Provident fund)



Things you must know about EPF (Employees Provident Fund)

What is EPF (Employees provident fund)?
EPF (Employees Provident Fund) is a retirement benefit scheme under the Employees Provident Funds and Miscellaneous Provisions Act 1952. This fund is managed and overseen by the Employees Provident Fund Organisation (EPFO). Under this scheme an employee has to pay a certain contribution from his/her salary towards the scheme and an equal amount of contribution is paid by his/her employer. Every establishment with over 20 employees is required by law to register with the EPFO. At present, according to the EPF regulations, all employees drawing salary less than Rs. 15000 per month have to mandatorily become a member of EPF.
EPF-EPFO
Image credit: www.epfindia.nic.in
How much do you contribute to EPF?
At present, 12 percent of your basic wages plus dearness allowance gets contributed from your salary to the PF account on a monthly basis.

How much does your employer contribute to EPF?
At present, according to EPF regulations, your employer contributes an equal amount i.e. 12 percent of your basic wages plus dearness allowance. The total share of employer’s contribution does not go into EPF account. 8.33 percent of employer’s contribution goes to Employees Pension Scheme but it is calculated on Rs. 15000.

Can an employee contribute more than 12 percent of basic salary?
Yes, an employee can contribute more than 12 percent of his/her basic salary. Generally employees contribute only 12 percent of their salary but they can contribute upto 100 percent of their salary (Basic + DA) in EPF. However the employer can not contribute more than 12 percent. This is called Voluntary Provident Fund (VPF). This Voluntary Provident Fund also earns tax free interest.
EPF
What is the rate of interest for EPF account?
Currently, 8.65 percent is the rate of interest applicable on the EPF contributions made by the employee and the employer. The interest in EPF is calculated on monthly running balance. The rate of compound interest is decided by the government and central board of trustees. It should be noted that interest will only accumulate on your EPF balance and not on your EPS balance as EPS is a pension scheme.

Are partial withdrawals / advances allowed from EPF account?
Yes, you can go for partial withdrawal / advance from your EPF corpus for specific purposes / reasons like marriage (self, son, daughter, brother and sister), education (self, son and daughter), medical treatment (self and family), purchase/construction of house/ flat etc. However, you can avail these partial withdrawal / advances if you have completed a minimum number of years. The amount of advance also depends on the specific situation and the number of years of service. And on such advances you do not have to pay any interest.

How to check the EPF balance in your account?
If you do not know how much amount is accumulated in your EPF account, you can it online. The entire process of checking EPF balance / passbook is very simple and hassle free. Login to EPFO website (www.epfindia.com) using your UAN (Universal Account Number) to check your EPF balance / passbook. If you want, you can also download or take a print out of this passbook. You can also ckech your EPF balance / passbook through EPFO Mobile App "m-epf".

What is UAN (Universal Account Number)?
UAN is a 12 digit unique number given by EPFO to its members. A universal number is generated for each of the PF (Provident Fund) Account Number at EPFO. No two EPF members can have the same UAN. This UAN number remains same even with the change of the job. Because of this universal number, you can easily transfer your EPF balance in case of the job change. If you don’t know have your UAN, contact your employer. To avail the benefits of the UAN, you have to activate your UAN. This activation is done through the UAN member portal. After your UAN activation, you can easily check your EPF balance through the UAN.

What is the importance of 5 years of continuous service?
People tend to switch employments in their early career days, After leaving a job, they have two alternatives with respect to their EPF account. Either transfer their EPF balance to the new employer or withdraw their entire amount after the waiting period. There is no tax on withdrawal amount if you have completed 5 years of continuous service. In the event, if you changed your job in less than 5 years and transferred your EPF to the new employer then it will be considered as continuous service. Therefore, it is better to transfer your current EPF to your new employer.

What are the tax benefits?
The employer contribution towards your EPF is tax free. The amount of your contribution is tax deductible under Section 80C of the Income Tax Act. But you can not claim tax deduction under Section 80C on the employer's contribution. The money you contribute in your EPF account, the interest you earned on it and the money you withdraw after completing the mandatory period of 5 years are exempt from income tax.

You may also like to read: What is a SIP?

You may also like to read: Money saving tips

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Saturday, 24 June 2017

How to apply for new PAN card online? Check new PAN card status online



How to apply for new PAN card online? Check new PAN card status online
The government has started issuing new PAN card from January 1, 2017 that have added security features to make them tamper proof and with bilingual content in Hindi and English. The new PAN card is being issued to new applicants. However, the existing PAN card holders can also apply for the new PAN card and they will be issued newly designed PAN card.

How to apply for new PAN card online? Check new PAN card status online
New PAN Card
What is Pan Card?
PAN (Permanent Account Number) is a unique 10-digit alphanumeric number allotted to each taxpayer and issued in the form of a laminated card by Income Tax Department under the supervision of the Central Board of Direct Taxes. Pan card also serves as an important identity proof like driving licence and Aadhaar card and accepted at all the places. PAN is mandatory to carry out financial transactions such as opening a demat account, receiving taxable salary or professional fees and sale or purchase of assets above specified limits. The PAN number once allotted to an individual remains unaffected by change of address within or across states in India. How to link PAN to Aadhaar?

How to apply for new PAN card online? Check new PAN card status online

Features of new PAN card
1. Addition of a Quick Response (QR) code having details of the PAN card holder which will help in verification process. The QR code of the card will help in providing the details of the PAN card holder when it is produced before any authority.

2. Content on the new PAN card written both in Hindi and English, keeping in view the Rajbhasha policy of the government.

3. Legends have been incorporated for particulars such as Name, father’s Name and Date of Birth on the new PAN card.

4. A different positioning of PAN card holder’s signature.

5. Position of the PAN number has been changed.

6. Tamper proof.

How to apply for new PAN card online? Check new PAN card status online
Online PAN application is a simple and hassle-free process. The Income Tax Department of India has authorized NSDL and UTIITSL, two primary agencies for issuing PAN card in the country. Online application for new PAN card can be made on the portals of NSDL as well as the UTIITSL. You have to fill and submit the applicable form along with online payment of fee. Filled form along with copies of required documents can then be sent by post to either NSDL or UTIITSL for verification purposes

NSDL
You can apply for the new PAN card online through NSDL.
New PAN Card
2. Fill the form 49A (for Indian citizens only) online and submit the form.

3. Make payment. Payment can be made either by Demand Draft, Credit card/Debit Card and Net Banking. (Fee for processing PAN application is Rs 107/- if communication address is within India and Rs 771/- if communication address is outside India).

4. On confirmation, and on successful payment in case of credit card / debit card / net banking payment, an acknowledgement will be displayed on the screen. Save and print this acknowledgement.  You have to affix two recent colour photographs in the space provided. Signature / Left hand thumb impression should be provided across the photo affixed on the left side of the acknowledgement only. Signature / left thumb impression should be within the box provided in the acknowledgment. Thumb impression (if used) should be attested by a Magistrate / a Notary Public / Gazetted Officer, under official seal and stamp.

5. The acknowledgment duly signed and affixed with recent colour photographs along with Demand Draft (if any), proof of identity, proof of address and proof of date of birth as specified in the application form is to be sent to NSDL at (Superscribe the envelope with 'APPLICATION FOR PAN -- N-15 digit Acknowledgement Number)

Income Tax PAN Services Unit,
NSDL e-Governance Infrastructure Limited,
5th Floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Model Colony, Near Deep Bungalow Chowk,
Pune – 411 016UTI

How to track new PAN card status?
You can track your new PAN card status in the following ways. Always use your 15-digit acknowledgement number for tracking the new pan card status.

1. Check status at TIN website https://tin.tin.nsdl.com/pantan/StatusTrack.html

2. SMS ‘NSDLPAN 15 digit ack. no.’ to 57575.

3. Send e-mail at tininfo@nsdl.co.in

4. Contact at 020 - 2721-8080

5. Write to at following address:
Income Tax PAN Services Unit,
NSDL e-Governance Infrastructure Limited,
5th Floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Model Colony, Near Deep Bungalow Chowk,
Pune – 411 016UTI

UTIITSL
You can also apply for the new PAN card online through UTIITSL.
New PAN Card
2. Click on “Apply for new PAN card (Form 49A)”.

3. Fill the form and click on “Submit” button.

4. Applicant should click on "Validation" followed by "Submit" button once the application is filled in.

5. Now make the payment.

6. On successful payment, save and take a print out of the filled form.

7. Affix two photographs.

8. You have to sign at the 3 specified positions on this photo-affixed form as follows:
i) On the left hand box, sign across the affixed photograph.
ii) On the right hand box, sign below the photo in the space provided.
iii) On page 2 of the form, sign in the bottom right hand box in the space provided.

9. Attach copy of the documents being submitted as proof of identity, proof of address and proof of date of birth as per information provided in the form.

10. Now submit or dispatch this complete set to the nearest UTIITSL office address below at any one of Mumbai, Kolkata, Chennai or New Delhi regions for processing of new PAN Card.

PAN PDC Incharge – Mumbai region
UTI Infrastructure Technology And Services Limited
Plot No. 3, Sector 11, CBD Belapur, NAVI MUMBAI – 400614 
Tel No:(022)67931300

PAN PDC Incharge – Kolkata region
UTI Infrastructure Technology And Services Limited
29, N. S. Road, Ground Floor, 
Opp. Gilander House and Standard Chartered Bank, KOLKATA – 700001
Tel No:(033) 22108959 / 22424774

PAN PDC Incharge – Chennai region
UTI Inftrastructure Technology And Services Limited
D- 1, First Floor, Thiru - Vi-Ka Industrial Estate. Guindy, CHENNAI – 600032
Tel No:044-22500426/044-22500183

PAN PDC Incharge - New Delhi region
UTI Infrastructure Technology And Services Limited
1/28 Sunlight Building, Asaf Ali Road, NEW DELHI -110002
Tel No:(011) 23211262/23211273-23211274

How to track new PAN card status?
You can track your PAN card status using your coupon number (Application number) at the website: http://www.trackpan.utiitsl.com/PANONLINE/#forward

How to replace your existing PAN card with new PAN card?

The existing PAN card holders who want to apply for this tamper proof PAN card can fill new application form. You have to mention your existing Pan number on the form and surrender your existing PAN card. Submit the filled application form at your local IT PAN service center.

You may also like to read: What is Mutual Funds?
You may also like to read: What is Atal Pension Yojana?

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Wednesday, 21 June 2017

How to invest in mutual funds online?



How to invest in mutual funds online?

What are mutual funds?
Mutual funds are an investment vehicle for investing in stocks and bonds. Mutual funds pool money from a large number of investors and invest this money in securities such as stocks, bonds, money markets instruments and similar securities. Mutual funds are managed by professional fund managers, who invest the fund's money in various securities and attempt to produce capital gains for the fund's investors. Every investor has a share in the gains or loss of the fund. Investing in a mutual fund is much easier than buying or selling individual stocks and bonds on your own. Benefits of investing in mutual funds
Mutual Funds
How to invest in mutual funds online?
With the rapid growth of internet, the use of online services has become quite popular among people. Most of the financial transactions are completed online – whether it is online shopping, transferring money or investing in mutual funds. You can invest in mutual funds online through AMC (Asset Management Company) websites, brokers’ platforms or independent websites.

KYC compliance
KYC compliance is compulsory for investing in Mutual Funds in India. You have to fulfill KYC verification requirement with a KYC registration agency. KYC verification is one time exercise post which you can invest in any mutual fund in India. There are two ways to become a KYC compliant - offline KYC process and eKYC process (online). These days, it is possible to complete your KYC online through certain fund houses or transfer agents in the following ways.
Mutual Funds
PAN card based e-KYC
Some fund houses offer this service. The entire process is easy and simple. You have to fill a form online. Take a print out of this form, paste a photograph and sign on it. Now upload its scanned copy along with other relevant documents. Documents required would be PAN card, proof of identity, proof of address and a photograph. Your in-person verification will be done using a webcam or your smart phone without going anywhere.

Aadhaar card based e-KYC
In this process you have to provide your Aadhaar number and the mobile number (registered with the Aadhaar card). An OTP will be sent to your registered mobile number. You have to enter the OTP. You have to also upload a scanned self attested copy of your Aadhaar card. This method has some restrictions. You can invest up to a maximum of Rs. 50,000 per annum in one fund house.

Always opt for PAN card based e-KYC instead of Aadhaar card based e-KYC to avoid investment limits.

Check your KYC status
You can check your KYC status with your PAN number with any of the KYC registration agency

Investing in Mutual Funds online
Mutual Funds
Decide your fund
Once you are KYC verified, you can invest in mutual funds online. Now you need to identify which mutual fund is best suitable to you. There are various types of mutual funds schemes are available in the market. Therefore you should choose the mutual funds based on your risk profile and personal goals. You also need to decide the medium of your investment: Direct or through an advisor or a distribution house.

Invest online
Once you have decided the mutual funds scheme you want to invest in. Visit the website of the Mutual Fund Company or AMC (Asset Management Company) whose mutual funds you want to invest. Complete a simple registration process and create a folio for your investment. All the subsequent transactions in the folio will be possible online using your bank account. But if you want to invest in other fund houses, you need to go through the entire process again through their websites. If you choose to invest through independent portals then you have to open an account with them. Once you have opened an account, you can buy mutual funds of various fund houses online using your bank account. You can also invest in mutual funds online through brokers portal if you have a demat account.

Systematic Investment Plan (SIP)
You can also start a SIP. You need to decide the date and duration of the SIP. You have to give a standing instruction to intermediary / Mutual Fund Company and the money gets debited automatically from your bank account on investment date and gets invested into SIP. This can be done by submitting a mandate to the Mutual Fund Company / intermediary or by adding the Mutual Fund Company / intermediary as a biller in your internet banking. What is SIP?

You may also like to read: Equity Linked Savings Scheme (ELSS)
You may also like to read: How to set your financial life in order?

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Monday, 19 June 2017

10 Tips to use credit cards wisely



10 Tips to use credit cards wisely
Most of us have a credit card or two or planning to have one shortly. Credit cards are a wonderful tool and have made our financial life easier and simpler. You may have often heard about the potential drawbacks of credit cards use. If you can use credit card responsibly, it will not cause any damage to your financial health. Follow the below tips to use your credit cards wisely.
Tips to use credit cards wisely
10 Tips to use credit cards wisely

1. Choose the right Credit card
Choosing the best credit card is an important decision. There are lots of credit cards in the market with different fees, interest rates, rewards and other incentives. All the credit cards have different features to suit different needs of the people. Therefore, it is very important to choose a right credit card for you. From the available options, find the credit card that is the best fit for your ways of managing money.

2. Know the rate of interest and other charges
Credit cards issuers charge interest on your credit card outstanding dues. You should be well aware about the rate of interest and other charges, before start using your credit card. Read the terms and conditions of your credit card carefully as the details of interest rates, late payment penalties, cash withdrawal fees, annual fees and other charges are mentioned in terms and conditions. Your credit card may have a grace period during which you can pay all your outstanding dues to avoid charges. Usually grace period is about 20 days depending on your credit card terms and conditions.
Tips to use credit cards wisely

3. Know the credit limit
The credit cards provider sets your credit limit on the basis of various factors such as your income, credit score, spending habits and repayment history. Here, credit limit means the maximum amount the credit card provider allows you to spend on your credit card. Always keep a practical credit limit. If you are a first-time credit card user, it will definitely help to keep a tab on over spending.

4. Set a personal credit limit
The credit cards provider sets a maximum credit limit for your credit card. It is always good to keep a personal credit limit too. Try to not spend more than 30% of your total credit limit. If you are a first-time credit card user, it will definitely help to keep a tab on over spending.

5. Avoid cash withdrawal facility
It is very tempting option to withdraw cash from credit cards but do not fall in the trap, it is not your debit card. The interest rate on cash withdrawal from credit cards is the highest. Therefore, unless there is an extreme emergency, you should not use credit cards to withdraw cash. Instead of withdrawing cash from your credit card try to swipe it wherever possible.

6. Check your credit card statement
All the users of credit card receive the credit card statement every month. Most of the people already know the total amount due on their credit card so they don’t care to give the statement a reading. But this is not a good habit and sometimes can prove to be costly. If there is an incorrect information in the statement, that might be overlooked. The statement of your credit card contains information about all transactions, credit limit and available credit limit; cash advance limit and status of reward points.
Tips to use credit cards wisely

7. Pay the full billed amount
When you pay only the minimum amount due of your credit card bill, you are focusing on paying more in interest charges later. This habit can get you into serious monetary trouble after some time, particularly if your credit card charges a high interest rate. This will also affect your credit score. Therefore, when you receive your credit card statement, always pay the full billed amount of your credit card bill.

8. Keep a track of the rewards point and cash back offers
Almost all the credit cards offer rewards point or cash back. When you start using your credit card keep a track of the rewards point and cash back offers. You should know the reward program and use your credit card accordingly. You can earn reward points and then redeem your reward points for cash back, gift cards and merchandise. You should also know the redemption process and rules with regards to redemption.

9. Always check alerts
Always check all alerts you receive from your credit cards issuer through email or SMS. Credit cards issuers providing notice about addition of new fees or increase in existing fees. Through these alerts you will remain updated about your credit cards.

10. Do not share your credit card details
Credit cards are a wonderful financial tool, which if not used with care can damage your financial position. Credit card users should be fully aware of its working and implications. Never share your credit cards detail to people who ask for this. Before entering your credit card online make sure the website is secure and your browser displays the secure lock.

You may also like to read: Benefits of investing in Mutual Funds
You may also like to read: 7 Habits that can make you rich

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