Finance

What is Repo Rate, Reverse repo rate,CRR,SLR,MCLR,NPA,LAF and Bank Rate – Explained – Easily – In Hindi

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What is Repo rate,reverse repo rate,CRR,SLR,MCLR,NPA,LAF and Bank rate this is what I am going to explain you easily in Hindi

Repo Rate
When a commercial bank goes through financial crisis, they approach Reserve Bank of India. The interest at which bank borrows funds from RBI by selling their securities and bonds is called “Repo Rate”. In fact the Repo full form is repurchase agreement. In other words, it is simply the rate at which RBI lends funds to commercial banks when they are facing a financial crunch and are unable to take care of their expenses.

In this case, a repurchasing agreement is signed by both the parties stating that the securities will be repurchased on a given date at a predetermined price.

This is one of the powerful tool to control liquidity, money supply and inflation level. For example if country economy needs less money supply RBI increases the Repo rate making it difficult to borrow money.

Bank Rate
The rate of interest charged by the central bank on the loans they have extended to commercial banks and other financial institutions is called “Bank Rate”. There is no repurchasing agreement signed, no securities sold or collateral involved. Banks borrow funds from the RBI and lends the money to their customers at a higher interest rate, thus, making profits.

Reverse Repo Rate
Reverse Repo Rate is the interest rate offered by RBI to banks who deposit into their treasury. When commercial banks generate excess funds, they choose to deposit it in RBI which is safer than lending it to their account holders or other companies. The rate of interest earned by depositing money in RBI is called reverse repo rate.

There may be circumstances when RBI needs money and asks commercial banks to come and give money on the basis of Reverse Repo Rate. So it generates good profit to the banks.

Main objective of repo rate is to deal with deficiency of funds. Whereas, reverse repo rate deals with liquidity in the economy.

Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks decreases. The RBI uses the CRR to drain out excessive money from the system.

Statutory liquidity ratio (SLR) is the Indian government term for reserve requirement that the commercial banks in India require to maintain in the form of gold, government approved securities before providing credit to the customers.

SLR is determined by a percentage of total demand and time liabilities.

Time Liabilities refer to the liabilities which the commercial banks are liable to pay to the customers after a certain period mutually agreed upon, and demand liabilities are such deposits of the customers which are payable on demand.

Example of time liability is a six month fixed deposit which is payable on demand only after six months.

Example of demand liability is a deposit maintained in saving account or current account that is payable on demand through a withdrawal form such as a cheque, internet banking etc.

Marginal standing facility rate is a window for banks to borrow from Reserve Bank of India in emergency situation when inter-bank liquidity dries up completely. Banks borrow from the central bank by pledging government securities at a rate higher than the repo rate under liquidity adjustment facility(LSF)

Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements. LAF is used to aid banks in adjusting the day to day mismatches in liquidity. LAF consists of repo and reverse repo operations

Marginal cost of funds based lending rate (MCLR)
The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. Earlier loans were given as part of Base Rates.

Non-Performing Asset(NPA)
Non-Performing Asset (NPA) is a loan or an advance where its interest and /or instalment of principal remain overdue for a period of time. Generally NPA refers to an asset which is not producing income.

All Rate in Real time can be checked here: https://www.rbi.org.in/home.aspx

Disclaimer: All data has been taken for informative and education purposes.

Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for “fair use” for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favour of fair use.

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How to File Your Income Tax Return – Step by Step – Live Demo – Explained – In Hindi

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How to file your income tax return this is what I am going to show you live demo explained in Hindi.

Now as many people knows about income tax that we have to pay tax for the income we have earned within the specified limits defined by the finance ministry of our country, but people even today does not know that even if you are filing taxes you have to file Income tax return which is mandatory, it’s very useful if you have already submitted tax more than it was required or get to know what tax is left I need to submit to the IT department.

Generally salaried employees get Form 16 from there company in which they work, which is actually the tax submitted on your behalf to the government and has all details including the savings which you have done in various schemes like NPS, insurance, FD etc if you have made aware your company about this before preparation of Form 16.

Companies finance\tax department prepares the form 16 and the savings proof(which you have submitted) basically on which you can get tax exemption is at the end is submitted to the Income tax department and the Form 16 has all the details about it.

Now days it’s very easy to file IT return(Income tax return). You require below details to fill IT Return:
1. Pan Card
2. Aadhar card
3. Form 16 from your employer
4. Form 26AS download from the website mentioned in next point (shown in video)
5. Your registration details in e-filing site of Income tax India Department(https://incometaxindiaefiling.gov.in/)

Process to fill ITR

1. First method is simple either you can fill your IT Return online on website mentioned in above link then you can go for verification by E-Verify(Online easiest method will show you)

Note: If you are using ITR-5 then you have option to send the acknowledgement letter duly signed to below address if not doing e-Verify

Income Tax Department – CPC, Post Box No – 1, Electronic City Post Office, Bangalore – 560100, Karnataka, India

Acknowledgement form downloaded is password protected which can be easily open by as follows:
The password is your PAN number in lower letters along with date of birth.
Example:
PAN: BBBPA1234F
Date of birth: 01/01/1985
Password: bbbpa1234f01011985

2. Second method is to download the relevant form which you have to fill like ITR-1, ITR-2 etc. The form is actually in excel sheet and is having macros in it, you will fill the excel form(remember copy paste will not work) then you will have to generate the XML file which you will upload on Income tax site, after uploading you will get the acknowledgement letter and now the process is same as shown in first method.

Main Website
http://www.incometaxindia.gov.in/Pages/default.aspx

Important Links
http://www.incometaxindia.gov.in/Pages/tax-services.aspx

Tax Calculator
http://www.incometaxindia.gov.in/Pages/tax-calculators.aspx

IT Return Forms Meaning
http://www.incometaxindia.gov.in/Pages/downloads/income-tax-return.aspx

Income Tax Exemption Section List(Official)
https://www.incometaxindia.gov.in/Charts%20%20Tables/Deductions.htm

Income Tax Slab (Official List)
http://www.incometaxindia.gov.in/pages/charts-and-tables.aspx

Pay Tax Online
https://www.incometaxindia.gov.in/Pages/tax-services/pay-tax-online.aspx

Please watch the complete video for proper understanding.

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What is GST – Goods and Services Tax – How does it work – Basics – Explained – In Hindi

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What is GST Tax in India this is what I am going to explain you with all the basics in Hindi

GST or Goods and Services Tax is a multistage destination based tax system which is applicable when any value addition to the goods or service is done.

Here multistage means starting from when raw material is procured till the time the product is delivered to customer.

what is gst tax in india

Currently Indian tax structure is divided in two types

Direct Taxes

Where liability cannot be passed to somebody else.(Example – Income Tax)

Indirect Taxes

where liability can be passed to someone else. Example VAT(Value Added Tax), Service Tax etc

When GST will be implemented three types of taxes will be applicable

  • CGST : Revenue collected by central government
  • SGST : Revenue collected by state government for Within state sales
  • IGST : Revenue collected by central government for outside state sales

What is Input Tax Credit

To make sure that tax is levied only on the amount of value addition at each stage of the supply chain, credit for the taxes paid at the previous stage is granted.

Who is liable to pay GST

Businesses and traders with annual sales above Rs20 lakh are liable to pay GST. The threshold for paying GST is Rs10 lakh in the case of northeastern and special category states. GST is applicable on inter-state trade irrespective of this threshold.

Products not covering under GST

Crude oil, diesel, petrol, natural gas and jet fuel are temporarily kept out of GST. Liquor is kept out of GST as a constitutional provision and hence it would require an amendment to Constitution if it is to be brought into GST net.
What is the anti-profiteering mechanism : To prevent the possibility of prices going up and to make sure that the reduced tax burden on products and services are passed on to consumers.
Authority to be set up by the government will act on complaints of profiteering and direct a profiteering supplier to cut price, return the benefit of reduced tax burden to the buyer with 18% interest, or recover such amount if the buyer cannot be identified or doesn’t make a claim. A profiteering business could lose its GST registration, too.

GST rates

0%, 5%, 12%, 18% and 28%

Main Website for GST related all information

To Apply GST online

Link to the GST Presentation

Benefits of GST

  • Brings transparency on the taxes levied
  • Improve the ease of doing business
  • Improve tax compliance
  • Boost revenue (Central as well state governments)
  • Eliminate tax cascading effect as shown earlier
  • Accelerate GDP growth rate
  • Exports would be zero-rated only tax on Imports as per GST norms

Please watch the complete video for proper understanding. If you like my video please make me happy by sharing it on social media and subscribing my YouTube channel

You can also read my other GST related articles. In which i have shown on how to fill various GST returns like GSTR1 and GSTR3B

What is SIP – Systematic Investment Plan – ELSS – Mutual Fund – Details – Explained – In Hindi

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What is SIP, Systematic Investment plan this is what I am going to explain you in hindi, its benefits and other details.

SIP means investing smaller amount on regular period of time for continuously for few years. The money invested in SIP is used to buy mutual funds basically it is used to buy NAVs(Net Asset values) which is basically a value given to a particular groups created by adjoining different equities of same subset(Same subset means having same properties like it can be of same values in market nearly, or may be basis of classification like finance, bluechip, banking etc)

You invest money in a mutual fund. This is an investment. SIP is a method of investing in mutual funds.

While investing small amount of money can give you good returns even may be better than recurring deposits. The longer you invest the more you will accumulate money.

Investing and opting out can be done anytime whenever you want it does not penalize for this.

This is a flexible option to invest money. However NAV value as totally dependent on mutual funds so totally it depends on equity market directly.

SIP

What is NAV: The Net Asset Value (NAV) of a mutual fund is the price at which units of a mutual fund are bought or sold. It is the market value of the fund after deducting its liabilities. The value of all units of a mutual fund portfolio are calculated on a daily basis, from this all expenses are then subtracted. The result is then divided by the total number of units the resultant value is the NAV. NAV is also sometimes referred to as Net Book Value or book Value

Investments cab be done on daily\monthly or quarterly basis.

Compounding and rupee cost averaging is the main reason which will give a good amount on your money.

For equity funds always withdraw money after 1 year of investment to avoid tax.
For non-equity funds withdraw money within 3 years to give tax as per your income slab.

Now the question arises how should we invest, what all factors we should consider.

Basically main thing we can see before investing:

1. CRISIL rating.
    CRISIL is an organization which provides ranking to different mutual funds based on their performance in each quarter.
    CRISIL (formerly Credit Rating Information Services of India Limited) is a global analytical company providing ratings, research, and risk and policy advisory services. CRISIL’s majority   shareholder is Standard & Poor’s, a division of McGraw Hill Financial and provider of financial market intelligence.
    https://crisil.com/capital-markets/crisil-mf-ranking-list.html

2. Second thing you can see that how old is the mutual fund and what is the performance in last three years.
3. It’s always good to build a diversified portfolios for investment.

Mutual Fund-SIP-ELSS

Main requirements to buy SIP\Mutual Funds
1. PAN Card
2. Bank Account
3. KYC

KYC Registration Agency
https://www.cvlkra.com
https://kra.ndml.in
https://www.nsekra.com
https://camskra.com
https://www.karvykra.com

KYC Registration Documents Required
1. 2 Passport Size Photo
2. PAN Card
3. Address Proof
4. Bank Details

Those who already have Demat accounts, there KYC would have already done when they would have opened the account. Also if having demat account we can buy SIP online. Now a days eKYC is also done.

Top Rated Mutual Funds
http://www.moneycontrol.com/mutual-funds/top-rated-funds

Sites to Buy SIP Online
https://assetmanagement.kotak.com/sip
https://www.sbimf.com/
https://www.reliancemutual.com/sip
https://online.franklintempletonindia.com/asp_app/Investors/InvestOnline/InvOnlineBrkTrans.asp

What is ELSS : Tax saving mutual funds (commonly known as Equity linked Saving Schemes – ELSS)

Only investments in Equity Linked Savings Schemes (ELSSs) or tax saving mutual fund schemes qualify for a tax deduction under Section 80C (Max Rs 1.5 Lakhs)of the Income Tax Act. ELSS funds have a lock­-in period of 3 years and invest a majority of their portfolio in the stock market.

The invested amount can be withdrawn only after 3 years. ELSS funds do not allow premature redemptions before completion of the 3­ year lock­-in period.

ELSS funds have two plan options: growth and dividend, Growth option is recommended for long term capital gains. In dividend option customer can choose pay-out of dividends or reinvestments of dividends. Dividend received will not be taxable however if you are reinvesting the dividend it will be treated as fresh investment and you can claim tax benefit from it.

A Direct plan is what you buy directly from the mutual fund company (usually from their own website), whereas a Regular plan is what you buy through an advisor, broker or distributor (intermediary). In a regular plan, the mutual fund company pays commission to the intermediary and therefore its little bit less fruitful.

Please watch the complete video for proper understanding.

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