6 steps to follow when you change your bank account

 

Steps to download eCAS (electronic Consolidated Account Statement) via NSDL

 

8 ways to save taxes under Section 80 C

 

How to pay advance tax on time! Quarter 1 - Deadline 15 Jun

 

To pre-pay or not to pre-pay my housing loan- that is the question!

Most of us who have borrowed money to buy a house are often plagued with the question - should we pay it off early? Or just keep plodding along till the term ends? There are passionate proponents for both sides. Confused?

There are no right or wrong answers. Each of us is unique and even if logic says you may make more money if you don't pre-pay, it may cause you stress to have a loan hanging over your head.

Perhaps, this step-by-step thought process will bring some clarity.

Before you start just pop your Relationship Manager a mail, and keep this information handy.

• Are there any pre-payment penalties on my loan?
• What is the current Interest Rate on my loan?
• What is the tenure left on the loan? 
• If the loan is not pre-paid, by the end of the term, what will the property actually cost you?

Ready?

Step 1 :  EMI Vs Income

Is your Equated Monthly Installment (EMI)  more than 20-30% of your monthly income? Yes?  Proceed to the next step. No? you can still go through the next steps to clarify your thinking.

Reducing the EMI to 25% of monthly expenses worked well for one of my clients who had to take a salary cut during the pandemic. By tightening other expenses he was able to keep paying the EMI.                               

Step 2 : Time left on Loan

Do you have less than 10 years left on your loan?  If yes, proceed to the next step!

P.S. If you are young and have few responsibilities you can start pre-paying after 5-6 years after starting the loan.

 A client in Ahmedabad would have spent 78 lacs on a house that was worth 36 lacs is she had paid interest for the entire term. She pre-paid after 6 years and brought the overall cost down substantially!

Step 3 : Check your Asset Allocation

Take a look at the financial assets you hold. Already heavy on equity vs your model?   Are the markets up? If yes, you could consider using some of your equity profits to pre-pay the loan. But before you decide, proceed to the next step!

 A couple checked their asset allocation on 5th April 2021. Their model indicated a ratio of 30: 70 (Debt to Equity). Actual ratio 15: 85! 

They sold some of their equity and brought their EMI to 10% of their expenses. On 15th Apr 2021, the wife received an email that her company will shut down on 1st June 2021. She is highly qualified and will definitely get another job. Thankfully, since their EMI is now so much lower, and they have 9 months of household expenses in emergency funds, they are secure. And as we speak, markets have corrected!

Step 4 : Loan Rate Vs Investment Return

Be honest with yourself when you answer these questions. Are you conservative by nature? Do you prefer FD's & Interest earning products? What are the current net of tax returns on the products you normally invest in? 

If your answer is that  you would probably make less on the products you invest in, proceed to the next step!

A lady was paying Rs. 78000 p.m. as EMI @ 9.1%. The rest of her savings were being away in bank fixed deposits which were earning her 6.8% net of tax (she was always worried about losing her job). We used some of her bonus to pre-pay her loan over a period of time. Today she is debt free and she sleeps in peace. 

 
Step 5  : A few more checks before you pre-pay!

• Is your Current income stable?
• So you have 9-12 months Emergency Funds ?
• Any big goals or events coming up? for e.g. a baby on the way?
• Have you got a thumbs up from your CA & financial advisor?

Go for it!

Life is uncertain. Carefully calculate your monthly expenses. Keep a min of 9 months in ultra safe investments like liquid funds and bank deposits. Most importantly, before you actually pre-pay consult your CA and advisor for tax write-offs/other benefits. 

A client who ran his own flourishing business was confident that he didn't need to worry about emergency money. Due to the lockdown all his outstanding payments were delayed and he had to borrow from his dad to pay his EMI's.

A word of caution - these are only pointers. Please consult professionals before executing.

6 Cool Changes in your Health Policy

 6 Cool Changes in your Health Policy

Effective Oct 1, 2020

Clarity & Standardisation

Standard wordings for exclusions & definitions for pre-existing diseases.

More Inclusions Like:

• Tele-medicine
• Treatment of mental illnesses
• Behavioral disorders
• Neuro-developmental disorders
• Genetic diseases
• Puberty-related disorders
• Menopause related disorders
• Robotic surgeries etc

Claim Decision

Within 30 Days of submission!

Claim Rejection

Not allowed after 8 years of premium payment

Payment Delays

They delay. They pay! 2 % above the bank rate

Waiting Period Reduced

90 Days for lifestyle diseases like diabetes & hypertension

Ask your health insurance provider for more details.

4 Ways to link your Aadhaar & PAN in time!

Deadline June 30, 2021

1. Via SMS

• Type          : UIDPAN (space) Your 12 Digit Aadhaar No. (space) Your 10 Digit PAN No.
• Send SMS: 567678 OR 56161

2. Income Tax Website

• Step 1 - Go To: https://www.incometaxindiaefiling.gov.in/
• Step 2 - Go to: Quick Links - Link Aadhaar
• Step 3 - Keep PAN & Aadhaar card handy. Follow instructions

3. Call your CA

Your CA can do it for you!

4. Call the HelpLine

1800 103 0025        Or     080 461 22000      Or        080 265 00026

What If I don't Do it?

• PAN will become inoperative.
• You will not be able to file your tax returns
• Pay higher TDS
• Penalty of Rs. 1000 to make your PAN operational again

Cutting Chai or Cyber Crime anyone?

There is no escape from technology. Like it or not, we are all being dragged into the digital era - some joyously and some kicking and screaming. 

Darshak is a young man, who even pays his chaiwalla with his digital wallet. Just like in the ads. One February in Sunday, that act of paying digitally literally scalded his throat. He was in a class for Financial Modelling, when he got two text messages. One saying his bank account had been debited by Rs 4523/- and a few minutes later, debited a second time with an amount of Rs. 10000/-.

Since he was in class, his phone was on silent and he only saw the messages about half an hour later, in his chai break - and then had a mini heart attack! His bank account was wiped clean. His debit and credit cards were with him. It was a Sunday.... what was going on?

Most of us know or can guess what happened. Somehow, a fraudster had managed to get his bank details and swiped out all the money from his savings account!

Lots of tips for those who ever have the misfortune of having to deal with this.

• Call your bank and block your cards to prevent any further misuse. (make sure you have that number on speed dial)
• You need to go, with an application letter, asking for an FIR stating all the details of the transactions, including your bank details. A "presence certificate/letter"   would be very useful, if someone can vouch for where you were at the time of the fraud. The presence letter should state who you were with when the transaction took place. In these days of lockdown, not sure how you will be able to go!
• The inspector will ask you a bunch of questions and when satisfied, stamp your application letter. Carry copies of all paperwork and ask the police station to stamp all of them
• The police dispatch department will take the original, stamp a photocopy and then send the original to your bank.
• It doesn't end there. You have to take the photocopies, the presence letter copy, your original PAN card/Aadhaar card and all your debit, credit card, savings account details and go to the nearest bank branch of your bank (where the fraud happened)- NOT your home branch.
• The special banking fraud department will accept the papers and you will get a text message with a complaint registration no. Usually, if a bank plans to return the money, it will be credited to your account in 21-30 days.

So what can we do to minimise our risks:

• Whenever you use online banking, use the "virtual keyboard" which almost all websites provide. It shuffles the characters, making it quite hard for fraudsters to steal your pin or password. (It's quite a pain to use, but keep reminding yourself it's worse to lose the money). Make sure the site address always shows https - the 's' is crucial
•  Don't leave too much money in your savings account. Best to park  in mutual funds like liquid and overnight funds - access within 24 hours and a slightly higher return. Fraudsters still haven't figured out to go after these, thank goodness.  
• If you make payments on debit/credit cards online, try not to save the details on any website. As we know, this data has been stolen from so many well-known sites. Also, have two credit cards - one with very low limits, which you use online.
• Avoid using debit cards online. 
• The Govt has encouraged us to use digital wallets like PayTM, Google Pay, RuPay and a host of others. Some, not all, ask for your bank details - account number, etc. Avoid using these.  Especially avoid giving your CVV number ( those 3 little numbers on the back of your credit card) to anyone.
• Re-load using net banking, where you don't have to give all this information. And use the virtual keyboard.
• Many of us have our banks' mobile apps loaded on our phones. Dicey - best use your laptop or computer for transactions.

You could also watch JamTara on Netflix to figure out more ways that we get taken for a ride!

In the meantime, Darshak is holding his breath, wondering if he will ever get his money back! Something tells me that he will not pay his chai-walla with his digital wallet in the near future!

Your Silver Lined Cheque Book

Thank you to all very informed women of the Prism group for inviting me to speak on 6th April 2018 at the Mahratta Chamber of Commerce and for the wonderful feedback below. As you can see your lovely gift holds pride of place.

[06/04, 20:39] Suj gave a talk at the maratha chamber of commerce. She had the audience in rapt attention and singing praises. Tara  Vaidya

[06/04, 20:43] Great talk. Difficult things made to sound very simple. Thanks 

[06/04, 21:00] Very eloquent speaker. Handled the q n a session well. Made notes. Going to discuss with dj tmrw

[06/04, 21:57]  Sujata was great of course, snacks were yum, auditorium was freezing! 

Sangeeta Shahaney

[06/04, 23:16] 

I loved it, got me thinking, one needs to learn and put some effort into understanding mutual funds etc. the subject is so huge, one has to make a beginning somewhere, Sujatha gave a good overview in very simple and understandable terms, she is a great presenter, it was a pleasure listening to her. A very good program, if there had been more such programs, I would have stayed on as member, thanks for letting me attend.

Poonam Gupta 

[06/04, 23:37] Good evening!

I had to run off because I didn’t want to be late for the Friday family dinner.... 

Thanks so much for inviting me!

I really loved the afternoon.... the presentation you’ve created is informative, humorous and easy to understand. As are you!

Now tell me what exactly I need to do to rope you in for the same thing for WZCC women entrepreneurs?

Mahrukh Bharucha

Thanks for organising yesterday' sprogramme .and getting to talk to us young investment advisor Sujata Kabraji   who understands women' problem and is very knowledgeable.

Thanks Sujata  for very  infirmative talk.

Shobha Deshmukh

Thanks Sujata for giving us basic inputs of finance planning to enable us to plan and enjoy our old age ! 🏼

Manju Prasad

Thanks Sujata for giving us basic inputs of finance planning to enable us to plan and enjoy our old age ! 🏼

A complex subject like finance explained in very simple and easy to understand terms. Thanks Sujata.

Lata Phatak

Thanks Sujata for explaining it so well

Romi Advani

[09/04, 09:09] 

Sujata’s talk was very well conducted and presented . Just the right amount of simplified explanations on various aspects of finance , investments, and tax implications for non finance people-sr. Citizens to grasp easily . Some information were very helpful for me too.

[09/04, 09:09] My compliments to Sujata for her flawless handling of the powerpoint presentation 

So well simplified.

I would surely love to interact with here whenever she visits Pune next.

 aruna advani

Thanks for organising  excellent  lecture  for us I would like Sujata to take more workshop for Prism  members so we understand  the investment  cycle properly.Thanks once again 

neelam bansal

I liked  the advice on will preparation

And safe guards on insurance policy realisation.

Other tips to save money was useful.

On the whole a well organised  program 

Tku. 

Rathna Narayanswamy

[09/04, 11:28] 

 The talk was very good and informative. Some members said that we should have more such talks .

Veena agarwal

Thank you PRISM for organising the talk by Sujata Kabraji. The program lived up to its promises made in your invite: paranoid about numbers? Make your savings account work for you, insurance and pension plans etc.
Sujata’s presentation, with her humour and appropriate illustrations, personal experiences and anecdotes was able to build a rapport with us. Her patient and honest responses to the many questions raised were encouraging.
An informative talk. I would certainly like another more detailed session with her and from the comments overheard after the talk, most of the group felt the same.

Mira Bhojwani

RBI Floating Rate Bonds @ 7.15% anyone? 10 Things you should know!

The Reserve Bank of India offers bonds with a taxable rate of interest of 7.15% p.a. The key piece of information you must know is that the interest rate is re-set every 6 months.

Before investing do go through 10 more bits of information you should know.





1. No maximum limit for investment in the RBI 7.15% Floating Rate (Taxable) Bonds.  Each bond will be issued for a minimum amount of Rs.1,000 (which will be the face value) and in multiples thereof. 

2. Resident individuals and Hindu Undivided Families only. NRIs are not eligible 

3. Choose between the cumulative and non-cumulative modes for payment of interest.  

• Cumulative option- interest is paid with the principal when the bonds mature.
• Non-cumulative option -  interest is paid half-yearly (1st August and 1st February) 

Do remember that you can’t change the option in middle from Non-Cumulative to Cumulative and vice versa. Pick carefully at the time of filling the form. 

4. Interest income earned from these bonds is added to your income and taxed as per your slabs. Exempt from wealth tax though, under the Wealth Tax Act, 1957.  

5. The bonds are not transferable but can be transmitted. They cannot be sold in the secondary market. Not eligible as collateral for loans from banking institutions, non-banking financial companies or financial institutions. 

6. They can only be held in physical form by the investor - not demat. 

 7.The bond tenure is 7 years from the date of issue for investors below age 60. 

a) Lock in period for investors in the age bracket of 60 - 70 years - 6 years from the date of issue. 

(b) Lock in period for investors in the age bracket of 70 - 80 years - 5 years from the date of issue.  

(c) Lock in period for investors age of 80 years and above - 4 years from the date of issue. 

8. In case of joint holders or more than two holders of the Bond, the above lock-in period will be applicable even if any one of the holders fulfills the above conditions of eligibility. 

9. The effective date of premature encashment for eligible investors will be 1st August and 1st February every year. However, 50% of interest due and payable for the last six months of the holding period will be recovered in such cases, both in respect of Cumulative and Non-cumulative bonds. 

10. The biggest plus of these bonds is the safety - it is guaranteed by the Government of India. In addition, the interest rate is higher than FD's in banks currently. However, the downsides are that the interest is taxable. More importantly, if interest rates go up, you will be stuck with a product that is earning you less.

Paperwork required to apply will be the application form, PAN card, Aadhaar card/proof of address and your cheque!

Breaking the Writer’s Block on Finance for the Network of Women in Media, Mumbai

·       Paranoid about numbers? Do you get cross-eyed when your CA sends you all those forms?

·       Have more than a couple of lakhs lying in your savings account and would like to make it work harder for you?

·       Ever worried about how you would manage in this hire/fire culture?

·       Will medical costs eat into your retirement nest? Hey - do you have a retirement nest at all?

·       Could freelance work be an option? Are salaried people really at advantage? What do you need to think about before you take the plunge?

·       Why on earth do you need to write a will?

These were some of the questions discussed on 24th Feb 2018 with the dynamic women in media.

Let’s Talk Business - Cafe Mutual 2018

Ajith Menon - putting me on the spot about saying 'No' to clients, not having a visiting card and other such crazy questions

Co-Hosting the Network FP National Conference-19th Jan 2018

This was a fun event - total tongue in cheek - gently roasting the speakers - it was a lot of hard work but tons of laughs! The topic was close to my heart too! Ethics at heart, Growth on Mind.

Ouch! I broke my writing arm!

Have you ever thought about this? If you are single, most likely you operate your bank accounts and investments in your single name.

What if you have a fall and can't sign for a few weeks or months? How would you pay your bills, draw money or access your investments? It's a thought that has haunted me over the last few months whilst I stepped in to help a friend in a similar situation.

Dummies Guide to Your Monthly Portfolio!

We send you a monthly report of what you have invested in so that you can track your progress. Do your eyes glaze over when you try and read these reports?  It does have a lot of info, so for those of you who just want to take baby steps, a few simple pointers:

On the first page of your report, there is a graph titled Current Asset Allocation- take a peek. It tells you how much you have in debt (interest earning investments) and how much in equity mutual funds. If you like big words, or want to impress your better half, casually mention how your asset allocation is exactly how you planned it. Asset allocation should be based on your goals, your risk taking ability and capacity. Maintaining the right balance is crucial - you know all that stuff about not having all your eggs in one basket?

Arbitrage - Spread too thin?

For a while now returns from arbitrage schemes have fallen and after meeting with several fund managers, it seems likely that the returns will remain on the lower side for a while. 

The reasons are manifold - 

• In the 2014 budget, taxation on debt products changed. In order to get relief on these, you have to hold it for 3 years and over.  Arbitrage has a lock in of 1-3 months so money gravitated to it.
• Over the last year, interest rates have fallen, and since most arbitrage funds have about 35% in debt, returns have been affected due to this too. 
• And then, fund houses launched hybrid products which include arbitrage components. So more money went into arbitrage and the spreads reduced.
• Finally, the market has been moving sideways and for arbitrage to give good returns, the market has to be on the rise and volatile.

If you are looking for higher returns than what you have been getting in the last year, it's not a bad idea to explore other options.

Wooing Women Investors - Panel Discussion - Cafe Mutual 2016

If you have the patience, you can listen to the 39 minute recording. Link below:
http://www.cafemutualevents.com/videos.html

Financial Stuff Women Need To Understand @ SAS Pune - 12th Jun 2015