Saving Schemes

How to Transfer Sukanya Samriddhi Yojna Account?: It is very important to know how to transfer your Sukanya Samriddhi Yojna account. You gain mobility when you transfer your funds from your Sukanya Samriddhi Yojna account. The simple way to transfer funds from the Sukanya Samriddhi Yojna account is to transfer it from your one financial institution to another.

There are several options available for you when you are trying to transfer funds from one account to another. You can transfer funds from a post office to a bank or from one bank to another bank or lastly, from one post office to another post office in India.

It is important to know how to transfer your Sukanya Samriddhi Yojna account. When you don’t have adequate information about the transfer, you will be confused. Therefore, it’s important to know all the information about the Sukanya Samriddhi Yojna account. In this article, you will find helpful information about how you can transfer your Sukanya Samriddhi Yojna account from any of the above options.

What is a Sukanya Samriddhi Yojna Account?

Sukanya Samriddhi Yojna account is an initiative by the Indian government. It is a saving scheme part of the “Beti Bachao, Beti Padhao Yojna”. The scheme is which is helpful for the girl children of India. This scheme will help the girl children save money and use it towards achieving their goals and dreams in life.

The Sukanya Samriddhi Yojna account can be opened by the parents if the girl child is below the age of ten. The maturity or tenure of this account is till the girl child turns twenty-one years old. However, if the child gets married at eighteen, the tenure of the account will reach its maturity. The Indian government increased the amount of interest on this account in April 2020.

According to the new announcements, the interest rate of the Sukanya Samriddhi Yojna account is increased to 7.6% annually. The minimum amount to deposit in the account is Rs. 250 and the maximum amount that a person can deposit is Rs. 1,50,000 per year. The eligibility of tax deductions on this scheme is up to Rs. 1,50,000, under the Section 80C.

Reasons for Transferring the Sukanya Samriddhi Yojna Account

There can be several reasons for the transfer of the Sukanya Samriddhi Yojna account. Some of the reasons are listed below:

• With the digital advancement in banking, it is very easy to deposit money online. However, the post office where you have opened the account may not have online facilities or it may not be connected to the Core Banking Solutions facility.
• If the person is moving to another state or city or a different part of the city, they would want to have the bank or post office near to their house, so they can easily deposit money in the account.
• Lastly, if the financial institution where the person has opened the account, the post office or the bank, isn’t providing you with proper services.

How to Transfer Your Sukanya Samriddhi Yojna Account

If you want to transfer your SSY account from one financial institution to another, you need to pay a sum of hundred rupees. You can transfer your account only once a year. If you are Sukanya Samriddhi Yojna account from one post office to another, it’s free and you don’t need to pay the amount.

If the parents of the child are handling the account, the child doesn’t need to visit the post office or bank. However, if the child is operating the account by herself, she will need to do the transfer process of her account.

Steps To Follow While Transferring Your Account

Here are the steps that you need to follow when you want to transfer your account:

Visit the post office or bank where you have your Sukanya Samriddhi account along with your passbook and KYC documents.

Inform the post office or bank officials that you want to transfer your Sukanya Samriddhi account to another post office or bank.

Then, you will need to fill the Sukanya Samriddhi Yojna account transfer request form.

It’s important that you need to surrender the passbook you received when you opened your account in the post office or bank.

After you submit the form and surrender the passbook, the official will close your account opened in the post office or bank and give you the necessary documents you need to submit to the new bank. The documents will include a certified copy of the account, your account opening application, your specimen signature, among other documents.

The official will give a cheque or a demand draft with the outstanding balance in the Sukanya Samriddhi Yojna account.

You will receive these documents. However, there are some other documents that the bank or post office will send to the new bank or post office where you want to open the account.

After you complete this process at your bank or post office, you can visit the bank or post office where you are opening the account and submit all the documents you received from your old bank or post office.

You will have to fill a Sukanya Samriddhi Yojna account opening form and hand over the KYC documents to complete the transfer procedure.

Documents To Be Submitted in New Bank

Here are some of the documents you will need to submit at the new bank or post office:

• Your Birth certificate ( if you are handling your account) or the birth certificate of the child.
• The address proof of the guardian.
• Guardian’s identity proof
• Your passport size photographs or passport size photographs of the child.

The new bank or post office will open a new account for you. Your new account will be opened on the date your previous account was closed. For example, if your old account was closed and transferred on 02.04.2018, your new Sukanya Samriddhi Yojna account in the new bank or post office will be opened on 02.04.2018. The reason for that is the maturity period of the Sukanya Samriddhi Yojna account cannot be changed. According to the scheme, the date is fixed and transferring your account will not change the maturity date of the account.

The new bank or post office will provide you will a new passbook. This passbook will have your personal details and the carried forward balance from your old account. Along with the details, it will also add the date of interest in your new account. This is so that you don’t lose any interest.

List of Authorized Banks for opening SSY Account

Here are some of the banks where you can open or transfer your Sukanya Samriddhi Yojna account:

• State Bank of India (SBI)
• Bank of India (BOI)
• Canara Bank
• Indian Overseas Bank (IOB)
• Punjab National Bank (PNB)
• Andhra Bank
• Corporation Bank
• UCO Bank
• Central Bank of India
• Syndicate Bank
• Union Bank of India (UBI)
• United Bank of India (UBI)
• Axis Bank Limited
• ICICI Bank
• IDBI Bank Ltd

Interest Rates of Post Office Small Savings Schemes: Indian Post is one of the most popular postal chains in the country. It is best known for its postal and courier services nationwide. The India Post controls the overall postal chain of the country, and it also provides various saving schemes for the public. With the rapid advancements in the communication fields and the inventions of the mobile phone, e-mails, and texts, the Indian post saw a downfall in the past years. But, the banking and the depository services of the India post became popular among the public for their attractive interest rates and yields.

In recent times, managing funds and finances have become the most challenging for individuals. Most people do not have any idea about investments and saving schemes, making it difficult for them to save money for their future. To increase investment activities and inculcate saving habits in Indians, the Government of India introduced various saving schemes under the Postal services.

The several savings and depository services available for the public under India Post are called Post Office Saving Schemes. These were introduced to increasing investment activities among the public, thereby providing them with high yields. The depository services are provided by every branch of India post across the country.

This article will discuss various post-saving bank schemes, their interest rates, benefits and other terms related to Post Office Savings Schemes.

What are Saving Schemes?

Savings schemes can be defined as the instruments that help individuals manage their finances and provide investment opportunities to help them achieve their financial goals over a given period. The Government introduced these savings schemes to inculcate saving discipline among individuals and to provide risk-free investment opportunities. The savings earned from these schemes can be used for different purposes such as children’s education, marriage or other emergencies.

Types of Post Office Saving Schemes

The India Post provides various saving schemes as per the requirement of the public, and these schemes are both short-term and long-term. They provide an easy investment opportunity to the public. Presently, the Post Office provides nine different types of Postal Saving Schemes that cater to the needs of every individual. Let us discuss each Post Office Saving Scheme in detail.

• Post Office Savings Account: This is the first and the most common saving scheme under the Post Bank. This account is just like other savings bank accounts, but the only thing that separates it from the regular savings bank account is its holding and operating with a Post Office. Like other savings bank accounts, these accounts can also be transferred from one Post office to another. The interest rate on these savings account is also 4% per annum. The Post Office Savings Account can be opened just by depositing ₹20, but one has to maintain a minimum balance of ₹50 in the account.
• Post Office Monthly Income Scheme: Post Office Monthly Income Scheme or POMIS is another saving scheme offered by the post office that assures a guaranteed monthly income on a small investment made by the investor. Any Indian resident can open an MIS account with the post office. Even a minor can also open an MIS account, and if the minor is above 10 years of age, He/she can even operate the account. One can open an MIS account with a minimum amount of ₹1,500 and a maximum of ₹4,50,000 individually. But, if one opens an MIS account jointly, the maximum amount of deposit becomes 9 lakhs. The Post office offers an interest rate of 6.6% per annum under the POMIS with a maturity period of 5 years. POMIS scheme also offers liquidity of investment within a year. However, the bank charges 2% as a penalty on the investment if it is withdrawn between 1-3 years.
• Post Office Recurring Deposit Account: Recurring Deposit Account is another saving and investment instrument offered by the post office, where a person deposits a certain sum at monthly intervals for over 5 years. A recurring deposit account yields a 5.8% interest per annum that is compounded quarterly. If a person fails to pay the monthly instalment of nay month, he/she can be charged with a late fee of 5 paise for every 5 rupees. Recurring deposit accounts allow a 50% withdrawal after 1 year of investment.
• Post Office Time Deposit Scheme: It is another saving scheme offered by the Post Bank. Under this scheme, a person can invest a lump sum for 1, 2, 3, and 5 years of period. The time deposit yield different rates of interest depending on the tenure of the investment. For 1, 2, and 3 years of time deposit, the interest rate is 5.5%, but for 5 years, it is 6.7%. The minimum investment in a time deposit is ₹200, and there is no upper limit. The best feature of a time deposit is that a person can hold as many time deposit account as he/she wants. If a person invests for 5 years in a time deposit, he/she can claim deduction under section 80C of the Income Tax Act.
• Kisan Vikash Patra: Kisan Vikash Patra is another saving scheme that provides an annual interest rate of 6.9% on investment. Any citizen of India can invest in Kisan Vikash Patra with a minimum investment of ₹1,000. The amount invested under the saving scheme doubles every 10 years and 4 months. The Kisan Vikash Scheme are easily transferrable and can also be endorsed to third parties. The scheme offers the liquidity of cash after 2.5 years, starting from the date of investment.
• Senior Citizen Savings Scheme: The Senior Citizen Saving Scheme or SCSS is an investment scheme under the postal services offered to citizens above the age of 60 years. A person who is 55 years of age can also benefit from the scheme if h/she has taken voluntary retirement. The investment amount under this scheme can be only in multiples of 1000, and the maximum investment can be ₹15 lakhs. The account under the scheme can also be held and operated jointly. The Scheme provides an annual interest of 7.4% payable on the 1 day of each quarter. The scheme also facilitates premature withdrawals after a year and with a penalty of 1.5% of the investment.
• Public Provident Fund: Public Provident Fund is a Long term investment instrument offered by the Post bank. The maturity period of the investment is 15 years. The scheme offers 7.1% interest per annum compounded yearly. The minimum investment for the scheme is ₹500, and the maximum is ₹1.5 lakh per year. The Scheme allows one time or monthly deposit of the investment amount.
• National Savings Certificate: National Savings Certificate or NSC is an investment policy with a maturity period of 5 years and offers a yearly interest of 6.8%. The interest under the scheme is compounded semi-annually. A person can start investing in NSC with a minimum of ₹500, and there is no maximum limit to the investment. The certificates acquired under NSC can be used as security against bank loans.
• Sukanya Samriddhi Scheme: It is one of the most benefitting schemes under the Postal services. It was introduced by the Government of India to help girl children. The saving scheme offers the highest interest rate, which is 7.6% per annum. The minimum investment is ₹1,000, and the maximum investment is ₹1.5 lakhs per year. The investment amount shall be deposited yearly or monthly for 15 years, and after 15 years, the investment will continue to earn interest till maturity. The maturity period of the scheme is 21 years from the date of opening.

Comparison of Interest Rates And Taxability of Post Office Savings Scheme

In the above paragraphs, we discussed savings schemes and the types of saving schemes offered by Post Offices. Now let us compare the interest rates of these saving schemes and discuss their taxability.

Name Of The Scheme	Interest Rates	Taxability
Post Office Savings Account	4.0% per annum, compounded annually	Taxable amount is exempted up to ₹50,000 on the total interest.
Post Office Monthly Income Scheme	6.6% per annum, payable monthly	The interest earned under the scheme is fully taxable.
Post Office Recurring Deposit	5.8% per annum, compounded quarterly	TDS is not applicable on the interest earned under the scheme, But interest is taxable as per an individual’s tax slab.
Post Office Time Deposit Scheme (5 years Tenure)	6.7% per annum	Tax savings up to ₹1.5 lakhs per annum, under section 80 C on a 5-year term deposit.
Kisan Vikash Patra	6.9% per annum, compounded annually	TDS is applicable on the interest earned, and the interest amount is exempted on maturity.
Senior Citizen Savings Scheme	7.4% per annum, compounded annually	Tax savings up to ₹1.5 lakhs per annum under section 80 C and TDS savings up to ₹50,000 on the total interest earned.
Public Provident Fund	7.1% per annum, compounded annually	A maximum deposit of 1.5 lakh is exempted under the Income-tax.
National Savings Certificate	6.8% per annum, compounded half-yearly	Tax relaxation up to ₹1.5 lakhs per annum.
Sukanya Samriddhi Scheme	7.6% per annum, compounded annually	A deposit of up to 1.5 lakhs is exempted. The interest earned on maturity is tax-free.

Importance of Post Office Savings Schemes

Post office savings schemes are essential for an individual as well as the country’s economy for the following reasons:

• The first importance is that these savings schemes are risk-free and reliable as the Government backs them. These savings schemes offer the best and most profitable investment options to an individual to mobilise their funds.
• Secondly, these savings schemes offer the most attractive and reasonable rates of return to the investors. The rates of these schemes are revised every 3 months by the Ministry of Finances.
• The Savings Schemes under India Post are easy to open with very minimal documentation and quick enrolment.
• The savings schemes are designed for every individual across the different economic strata of the country.
• The post office savings scheme offer high tax benefits to the investors, which make it more attractive.

Accessing NPS Account and CRA: The National Pension Scheme or NPS is a government scheme to mobilize your earnings to receive a regular income as some pension after you retire. The government launched this scheme under the pension fund regulatory and development authority in 2009. You can use the method by setting up an account.

The government has appointed the NSDL as the central record-keeping agency. They handle all accounts of the new pension scheme. When subscribers open a new PRAN account (Permanent retirement Account), they will get an I-pin and a T-pin.

How to Log in to NPS Online?

• Step 1: Visit the portal of NSDL.
• Step 2: Click on ‘Open your NPS account/ Contribute Online.’
• Step 3: Click on ‘login with PRAN/ I-Pin.’
• Step 4: Click on ‘Password for e NPS.’ Enter the PRAN, DOB, new password, confirm password, and input the captcha.
• Step 5: Click on ‘submit.’
• Step 6: Enter the OTP.
• Step 7: Log in with the new password.

Once you have got a valid PRAN, you can go to the official webpage of NSDL. The first page is the login page. You can go to the separate window they provide if you are an NPS subscriber.

Each customer with a unique PRAN can use it to track their NPS account on the NSDL website through a mobile app or the NPS portal online. The NSDL also gives all the customers a confidential I-pin to maintain the customer’s security. They can use to log in to their NPS account with that number.

Why Should Customers Want to Reset their NPS I-pins?

1. Customers can wish to change their NPS I-pin if they are faced with the following scenarios.
2. Initially, when a person enrolls with the NPS, they will get an I-pin in their registered email account. As soon as they get the mail, they can use the I-pin to log in to their NPS account. As a security measure, the officials want the customers to reset their NPS I-pin in the very beginning.
3. Customers can change their I-pin if they have forgotten the pin.

Steps to Reset NPS I-Pin

As soon as the customer has created an account in the NPS, they will get an I-pin in their registered mail account. They have to log in to their new account using it, and then they can reset it for safety purposes.

• Step 1: Log on to the NSDL website once you have your PRAN (Permanent Retirement Account Number).
• Step 2: There will be a ‘Set or Reset I-Pin’ option on the bottom right corner of the page. You can click on it to open a new page.
• Step 3: You will see banks where you have to fill in the details such as the PRAN, your name, the date of birth (DOB). All the details you enter into the spaces should match with the ones you have filled in your PRN card.
• Step 4: Enter your password or the I-pin.
• Step 5: Re-enter the password if required.
• Step 6: After entering the password, click on ‘generate OTP.’
• Step 7: You will get an OTP on your registered mobile number.
• Step 8: Enter the OTP you got on the portal and finally click on ‘submit.’

NPS subscribers can also reset their password or the I-pin if they have forgotten it; otherwise, the account can get locked. The authorities have made a rule to block the account if they enter their NPS account number consecutively five times to stop unauthorized access.

If it happens, then they have to reset the password by answering the secret question that you had set at the beginning of the creation of your account. If the user is unable to remember the answer to the question as well, you can submit a request to reissue the I-pin.

Steps to Reset Password for NPS if you have Forgotten It

• Step 1: Visit the welcome page for NPS account login on the official site.
• Step 2: A new window will open. Click on the ‘Forgot Password’ link.
• Step 3: A new tab will initiate where you have to input details such as your DOB, PRAN, etc.
• Step 4: Enter a new password on the space for the new password.
• Step 5: Log in to the account using the new password.

What is a T-pin?

A person with the Permanent Retirement Account or PRAN gets a T-pin from the CRA apart from the I-pin.

Advantages of I-pin

1. All I-pin holders can access the CRA system while checking their account details online, such as an address, bank account details, and nominee details for Tier 1 and Tier 2 NPS accounts.
2. All I-pin holders can generate their statement of holding both the Tier 1 and 2 accounts that give them the latest valuation of their total investments.
3. The I-pin holders can also generate their statement for transactions for the last three financial years as well as the invoice for the current financial years for Tier 1 and 2 accounts.
4. The I-pin holders can track their credit for their monthly contributions into their Tier 1 account.
5. If I-pin holders have any grievances, they can register an official complaint against the CRA or the Nodal Office after logging in to the CRA system. Once their complaint is recorded, the system generates a token number, and they can use it to track the status of the complaint later.

Advantages of T-pin

1. T-pin holders can dial the toll-free helpline number 1800222080 using their T-pin number if they have any queries or complaints.
2. T-pin can be useful if the holders need to speak to the NSDL, i.e., the Central Record Keeping Agency for the NPS.
3. The T-pin holder can access the Interactive Voice Response or the IVR system to avail of the services. These include changing T-pin, checking holding details, checking the status of any fund manager schemes, enquiring the details of the last contribution credit, checking the details of the latest withdrawal request, and requesting the transaction statement for the previous three financial years, and checking account details.

LIC Bonus Rates: LIC announced its bonus in 2016-17 calendars on LIC’s One Time Diamond Jubilee. LIC releases a bonus every September along with LIC Diamond Jubilee. In LIC bonus is a part of the return which is guaranteed to the LIC holders. In this article, we are going to discuss the LIC bonus and its overview. Bonus which we are going to cover in this article is:-LIC One’s Diamond Jubilee Bonus.

• What is the Meaning of a Bonus?
• What are the Types of Bonuses?
• How to Calculate The Bonus Returns?
• How to compare The Diamond Jubilee Bonus with other LIC bonuses or with any other privacy policies company?

What is LIC Bonus, An Overview?

The Actuarial department does an evaluation, and the bonus rates will declare in September every year. There are so many types of bonuses are states in Sept by the Actuarial department:-

1. SRB (Simple Reversionary Bonus)
2. FAB (Final Additional Bonus)
3. LA (Loyalty Bonus)

LIC has a LIC Act in which it shares its 95% of its profit to their policyholders and the remaining 5% with the government as its owner. In the year 2014-15, the regular Bonus of the LIC given to their policyholder is Rs. 34283 crores. And in 2015-16, LIC has paid Rs. 2502 as a surplus to the government up from Rs. 1803 crore.

In 2019-20 Life Insurance Corporation (LIC) has allocated a dividend of Rs. 2697.74 crore to the government for 2019-20 financial years. In those 2019-20 financial years, LIC generates a total surplus of approx Rs. 53955 crore, according to the sources. In 2019-20, Rs. 51257 crore surplus is reserved for the policyholders.

Life Insurance Corporation (LIC) of India, on their 60th anniversary, declared a bonus name as “One Time Diamond Jubilee Bonus.”

The new LIC policies, which open between 01/04/2015 to 31/03/2016, are relevant for the One Time Diamond Jubilee Bonus bonus rates. One Time Diamond Jubilee Bonus is also applicable for the claims by deaths or the claims which maturity period is over (including those discounted within one year of maturity) or surrendered on or after 01/01/2016.

Note: The Bonus is paid according to the policy rules and conditions and depends on the sum assured and policy term. The premium will be added to the account and paid when the maturity period will over.

LIC One Time Diamond Jubilee Bonus (60th Anniversary Bonus)

One-time additional bonus to the simple reversionary bonus, final additional bonus, and loyalty bonus is added on the occasion of LIC 60th Anniversary celebration named Life Insurance Corporation (LIC) of India’s “One Time Diamond Jubilee Bonus.” As per the Life Insurance Corporation of India declaration, they will pay Rs. 5 to Rs. 60 per Rs. 1000 sum assured, depending on the tenor of the policy. The older the policyholder is, the more the jubilee bonus will be offered to them compared to the new policyholders.

Some points to be considered by the LIC of India while offering the Jubilee Bonus to their policyholders:-

1. Policies from 31st March 2016 are eligible for the jubilee bonus and exist on or after the procedures of 1st September 2016.
2. This jubilee bonus will be paid over the regular annual bonus or its profit-sharing annual payout. The holders of money back get the profit of whole life from these profit plans.
3. Diamond Jubilee Bonus can revive the old policies.
4. Policies that lapse as of 31st March 2016 can also revive the eligibility of the Diamond Jubilee Bonus and can get the profit from the bonus offer.
5. Diamond Jubilee Bonus on the 60th Anniversary of LIC benefits over 29 crore individual policyholders and 12 lakhs group policyholders.
6. Depends on the duration of the policy, Diamond Jubilee Bonus can be Rs. 500 for a policyholder with the assured sum of Rs. 100000 to Rs. 6000. It means that older policyholders can get more profits as compared to the new policyholders. And also, the closer the maturity date, the maximum the profit.
7. The bonus will automatically increase by Rs. 500 each for every five-year gap in older policies. E.g., an approach that started in April 2008 will get Rs. 1,000 for every Rs. 1 lakh of the assured sum from 1st April 2008 to 31st March 2016.

LIC Special Bonus

As LIC announced its Diamond Jubilee Bonus on the 60th anniversary, it announces LIC Special Bonus on its 50th anniversary on 1st September 2005. In this bonus, a policyholder can get Rs. 5 to Rs. 50 per thousand sums assured.

The Life Insurance Corporation of India declares seven bonus plans for its 55th-anniversary celebration:-

1. Jeevan Anand,
2. Child Future Plan,
3. Jeevan Tarang,
4. Jeevan Madhur,
5. Jeevan Pramukh,
6. Jeevan Bharti I and
7. Jeevan Shree I.

All these bonus plans range between Rs. 1 to Rs. 6 per thousand sums assured.

These seven bonus plans were declared in 2011-12 under seven of its ‘With Profit Plans’ and Loyalty Additional Bonus (LAB) on the 55th-anniversary celebration.

What is Bonus?

Life insurance companies or organisations distribute their profits to their policyholders in some fixed percentage; this percentage is known as a bonus. Companies distribute various types of bonuses during a financial calendar.

Who is Eligible for the Bonus?

If you think everyone can grab the bonus, then this is not correct, everyone is not eligible for the prize, or you can say that every policyholder is not declared under the dividend. Only those policyholders who come under the eligibility criteria fixed by LIC are eligible for the prize. Types of policies that come under bonus criteria:-

• Participating insurance policies
• Traditional policies
• Endowment policies
• Whole life insurance policies
• Money-back plan policies

Types of Bonuses given by the Insurance Companies

Reversionary Bonus: Percentage rate declaration which applied to the sum assured of the policies. After order, they became a part of the guaranteed benefits of the guidelines. These will be paid at the end of the maturity period only or in case of death. There are three kinds of reversionary bonus:-

1. Simple reversionary bonus: A simple reversionary bonus is calculated on the sum assured and declared on the percentage rate.
2. Compound reversionary bonus: Like a simple reversionary bonus, it is also declared on the percentage rate basis, but they are applied to the sum assured and reversionary bonus already attached to the policy.
3. Special reversionary bonus: A special reversionary bonus is a one-time offer or dividend paid during the term of the policy. This bonus is given if some profit arises and that the same gain is not expected to happen again in the future.

Example: Anniversary bonus like Diamond Jubilee Bonus (2015-16) and Special 50th Anniversary Bonus (2005).

Another bonus added in the special reversionary bonus is called the final additional bonus for its policyholders.

Another kind of bonuses offered:

• Terminal Bonus or Final Bonus: Terminal Bonus is paid at the time of maturity or at the time of claim. After declaring a reversionary Bonus, this is proclaimed as the terminal Bonus or final Bonus if anything is left in profits.
• Loyalty Additional (LA): After completion of the specific period, this one-time payment will be available to the policyholder.
• Guaranteed Addition (GA): There are some plans in which a company is obliged to pay a fixed amount to the policyholder for a set amount of time; this is called a guarantee addition.

Simple Reversionary Bonus

Simple Reversionary Bonus is an assurance bonus declared annually with profits.

It is based on the earnings of the life company’s investment.

It is payable at the end of the maturity period of the policy or after death.

Simple Reversionary Bonus declared based on percentage rate and calculated on the sum assured.

For example, if you hold a policy of Rs 1,00,000 Sum assured and the simple reversionary bonus for the year declared is Rs 50 per thousand sums guaranteed, then your bonus amount is Rs 50 * 1,00,000/1,000, which is Rs 5,000 for this year. Still, you cannot take it annually. This will be finalised at the end of the maturity period or after the death.

Find LIC Bonus by Sending SMS

Type a message: ASKLIC <POLICY NO> BONUS

And send it to 56767855.

* Charges will be applied for the SMS.

How do you find the LIC Bonus Details?

• Visit LIC official website.
• Login to the LIC website
• Select for the policy status

There you can find all the policies and their details accordingly.

How do you Calculate the LIC bonus?

Bonus for the LIC has declared per thousand sums assured.

1. Find your LIC policy by name and table number.
2. Find the row which matches with your term plans and the period of the policy.
3. Bonus rate per thousand corresponds to the term plan.
4. Know your sum assured of the policy you owned.
5. The formula for Bonus Calculation:

Formula = (Sum Assured / 1000)*Bonus Rate

Example: Mr. Sen has taken Jeevan Anand’s plan for 15 years, and the sum assured is Rs. 10 lakhs. Now according to the LIC bonus rate, his bonus rate is 34 per thousand.

Which is Better, LIC Bonus or Private Insurance Company Bonus?

Many companies in the market offer you a bonus, and private companies also declare dividends for with-profit plans.

You can check their plan and compare them with LIC Insurance Plans.

Companies which offers a bonus with profit plans:-

• Kotak Insurance Policies
• ICICI Insurance Policies
• SBI Insurance Policies
• Sahara India Insurance Policies etc.

Reversionary Bonus Rates per 1000 Sum Assured

Group 1

Plan: Whole Life type (Plan 2, 5, 6, 8, 10, 28, 35, 36, 37, 38, 09, 77, 78, 85, 86)

• Term: NA
• 2016-17: 70
• 2015-16:70
• 2014-15:70
• 2013-14:70
• 2012-13:70
• 2011-12:70

Group:2

Plan: Endowment type / Plans 14, 17, 27/

After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121

• Term: <11
• 2016-17:34
• 2015-16:34
• 2014-15:34
• 2013-14:34
• 2012-13:34
• 2011-12:34

Group:2

Plan:Endowment type / Plans 14, 17, 27/

After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121

Term:11 TO 15

2016-17:38

2015-16:38

2014-15:38

2013-14:38

2012-13:38

2011-12:38

Group:2

Plan: Endowment type / Plans 14, 17, 27/

After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121

Term: 16 to 20

2016-17:42

2015-16:42

2014-15:42

2013-14:42

2012-13:42

2011-12:42

Group:2

Plan: Endowment type / Plans 14, 17, 27/

After conversion, 28 after conversion, 34, 39, 40, 41, 42, 50, 79, 80, 81, 84, 87,90,91, 92,95, 101, 102,103, 109, 110 & 121

Term:>20

2016-17:48

2015-16:48

2014-15:48

2013-14:48

2012-13:48

2011-12:48

Group:3

Plan New Endowment Plan814:

Term: 12 to 15

2016-17:38

2015-16:38

2014-15:38

2013-14:NA

2012-13:NA

2011-12:NA

Group:3

Plan New Endowment Plan814

Term:16 to 20

2016-17:42

2015-16:42

2014-15:42

2013-14:NA

2012-13:NA

2011-12:NA

Group:3

Plan: New Endowment Plan814

Term: >20

2016-17:48

2015-16:48

2014-15:48

2013-14:NA

2012-13:NA

2011-12:NA

Group:4

Plan: New Money Back Plans 820 & 821

Term:20

2016-17:39

2015-16:NA

2014-15:39

2013-14:39

2012-13:NA

2011-12:NA

Group:4

Plan: New Money Back Plans 820 & 821

Term:25

2016-17:44

2015-16:NA

2014-15:44

2013-14:44

2012-13:NA

2011-12:NA

Group:5

Plan: New Jeevan Anand Plan 815

Term:

2016-17:

2015-16:

2014-15:

2013-14:

2012-13:

2011-12:

Group:5

Plan: New Jeevan Anand Plan 815

Term:15

2016-17:41

2015-16:41

2014-15:40

2013-14:NA

2012-13:NA

2011-12:NA

Group:5

Plan: New Jeevan Anand Plan 815

Term:16 to 20

2016-17:45

2015-16:45

2014-15:44

2013-14:NA

2012-13:NA

2011-12:NA

Group:5

Plan: New Jeevan Anand Plan 815

Term:>20

2016-17:49

2015-16:49

2014-15:48

2013-14:NA

2012-13:NA

2011-12:NA

TDS from Insurance Commission – Section 194 D: Insurance policies are not only for oneself but also for the ones who are dependent on you. So, it is advisable to take that insurance policy that helps you after retirement, medical emergencies, and help your dependent ones after some accidentals or deceased of the major. The ways a person can choose the policies are through agents, brokers, some websites, etc. By choosing the insurance from agents or brokers etc., they are subjected to TDS (Tax Deducted at Source) as mentioned under Section 194 D of the Income Tax Act.

Who is/are Eligible for Deduction Under Section 194 D?

The taxes were deducted by the organizations that make the payment to the resident person, as remuneration or rewards, by the course of action of commission or for the following purposes:-

1. Seek or obtained insurance business as central.
2. They are carrying on or reviving or renewal the policies of the insurance.

When the TDS Deduct under Insurance Commission of Section 194 D?

The Tax was deducted earlier to the following events under the Section 194 D of Income Tax Act on Insurance Commission:-

1. When the commission credited to the account of the payee.
2. When the payment is made through cash, cheque or any in kind.

What is the Rate of TDS (Tax Deducted at Source) Under Section 194 D?

• TDS, Tax Deducted at Source under the Section 194 D on Insurance Commission, is made to the resident, irrespective of the individual, company, or other persons category. They are deducted at the rate of 5 % (3.75 % w.e.f. 14/05/2020 to 31/05/2021)
• The Tax would not deduct the surcharge and H&E Cess. So the Tax will be deducted at the source at the introductory rates as mentioned above.
• If you do not have quoted PAN, then the rate of the TDS will be 20 %.

Detail of the payee	Rate of the TDS
Individual (Not includes Company)	5 %
Domestic Companies	10 %

What are the Conditions when the TDS is not Liable to be Deducted under Section 194 D?

There are two conditions in which TDS is not deducted under the Income Tax Section 194 D:

1. If the commission you get is not exceeded by Rs. 15000, and
2. Self Declaration Form of 15G and 15H.

Is there any Provision for non-deduction of the Tax or Lowered Rate of a Tax Deduction?

Anyone who receives commission can fill a form name Form 13 and apply to the Assessing Officer for a certificate authorizing the payer not to deduct Tax or decrease the tax rate.

If you do not provide the PAN of the applicant, then in accordance with Section 206AA (4), no certificates Under Section 197 will be given for the non-deduction or lower rate of deduction.

For Issuing TDS (Tax Deducted at Source) Certificates, Due Dates

For the financial year 2020-21, the TDS return date was extended from the 31st of March 2021 to the 15th of April 2021 due to the pandemic or other financial conditions. (Only for quarter one and quarter 2 of Financial Year 2021)

1. From April to June, the certificate will be issued before the 15th of August.
2. From July to September, the certificate will be issued before the 15th of November.
3. From October to December, the certificate will be issued before the 15th of February.
4. From January to March, the certificate will be issued before the 15th of June.

Reinsurance is not Covered by the Section 194 D

From insurance to insurance, reinsurance differs in a number of ways. There is no contractual relationship between the direct insured and reinsured; this is essential to remember in reinsurance.

There are separate contracts between the insured and the insurer and between the insurer and reinsurer. Insured gets all the valid claims from the insurer after the insurer pays to the insured, irrespective of whether the insurer can recover the same from the reinsurer.

The “Commission” is not coming under the TDS Section 194 D when a reinsurance company gets business from an insurance company at a premium less “Commission.” The commission is not payable to the agent for acquiring the insurance business.

Similarly, there will be no claim during the operation of the reinsurance treaty after the expiry of the term of insurance, and Profit Commission is payable to an insurance company by the reinsurance company after the expiry of the period of insurance. Therefore, Section 194 D TDS (Tax Deducted by Source) is not applicable or required for this.

Section 194 D of Income Tax Act, 1961 Extract

Any person responsible for paying resident any income from any source of remuneration or rewards does not matter if that person provides the pay in the form of commission or otherwise, for soliciting or procuring insurance business (including business relating to the continuance, renewal or revival of policies of insurance) shall at the time of the credit of such income to the account of the payee or during the time of the payment by cash or by issuing the cheque or by publishing the draft or by any of the other mode of payment, whichever is more accessible, deducts the income tax at whatsoever the rates in forces.

We have provided that there is no income tax deduction shall be made under this Section 194 D from any such income credited or paid before the 1st day of June 1973.

We are further provided that there is also no deduction shall be made under Section 194 D, in a case where the amount of such income or as the case may be the total sum of the amounts of such income credited or paid or likely to be credited during the financial year to the account of the payee does not exceed fifteen thousand rupees.

Example:-

If Ajay and Ram got 12000 and 21000 commission respectively then Ajay does not need to pay for the TDS as the commission is less than 15000 but Ram will pay 21000 * 3.75 % of his commission in his TDS.

NSDL, CAS, CDSL CAS: CAS or Consolidated Account Statement is a financial account that contains all the details of the investments and transactions one does in any mutual funds.

It has all the details of the mutual fund transactions mentioning whether it is a sale or purchase. It further includes other information like the NAV details.

This statement comes in handy in predicting your funds’ long-term performance and determines the time at which they result in long-term investment.

Furthermore, since the CAS has records of all the transactions, it helps in calculating your taxes. CAS also assists keep track of all your redemptions and dividends that come with the mutual fund investments.

• Why Does One Need CAS?
• When Does One Receive CAS?
• What Happens When An Investor Has More Than One Demat Account Across The Depositories? Which Is Considered As The Default?
• What is a Depository?
• Explain the Meanings of NSDL and CDSL?
• CDSL
• What is the Demat Account Number, DP ID and Customer ID?
• How to Register for NSDL CAS?
• How to Register for CDSL CAS?
• What does NSDL CAS Look Like?

Why Does One Need CAS?

According to the Interim Budget announcement in 2014 to create one record for all financial assets of every individual, SEBI had extensive consultations with the Depositories, AMFI and RTAs of Mutual Funds (MF-RTAs) to implement the concept of CAS.

CAS offers you exceptional assistance in processing the record of all the investment holdings.

Furthermore, one can easily control the investments they hold, their value and portfolio composition.

The CAS is directly linked to the depository directory. As a result, it indicates the actual status of your investments. It will help you in developing a strategy to manage your assets better.

As the first step in this direction, it has been decided to enable a single consolidated view of an investor’s investments in securities held in Demat form with the Depositories and Statement of Account (SOA) form with Mutual Funds (MF).

When Does One Receive CAS?

As per SEBI guidelines specified in circular number CIR/MRD/DP/31/2014 issued on November 12, 2014, if there is any transaction in any of the Demat accounts of an investor or any of his/her mutual fund folios, then CAS will be sent to the investor next month regarding transactions executed in the previous month with the holdings.

Hence, if the investor has done transaction(s) every month, then he/she will get CAS every month.

CAS will be sent withholdings on March and September end in the next month viz., April and October, respectively.

If no transactions occur in any of the mutual fund folios and Demat accounts, then CAS withholding details will be sent to the investor on a half-yearly basis.

However, in Demat accounts with nil balance and no transactions in securities and mutual fund folios, the investor is entitled to receive one physical statement annually.

Further, customers will have an option to send such a physical statement only for one year.

What Happens When An Investor Has More Than One Demat Account Across The Depositories? Which Is Considered As The Default?

Under such circumstances where an investor possesses multiple Demat accounts across the two depositories (i.e., with NSDL and CDSL), the depository owning the Demat account, which has been opened earlier, shall be counted as the default depository.

Further, that depository will consolidate details regarding Demat accounts across depositories and MF investments and dispatch the CAS to the investor.

By reminding the Depository Participant (DP) of the default depository from which he is collecting the CAS, the investor may seek a change of default depository to receive the CAS.

What is a Depository?

The word depository typically signifies a place of accommodation or storage where something is cached for security purposes.

Therefore, a depository is basically an organization that accepts cash deposits from its clients. To put it in simple words, it is an economic intermediary whose main function is to provide Demate account services.

A depository provides opportunities for an investor to purchase or sell their securities.

Securities in depository accounts can be considered synonymous with cash in a bank.

A depository serves as a connecting bridge between the listed companies that issue shares and the various shareholders and investors.

The primary function of the depository is to keep the shareholder’s shares in the dematerialized form.

There are two principal depositories in India:

• NSDL: National Securities Depository Limited
• CDSL: Central Depository Services Limited

Explain the Meanings of NSDL and CDSL?

NSDL stands for ‘National Securities Depository’, and CDSL stands for ‘Central Depository Securities Limited’. These are national depositories managed by SEBI, i.e., the Securities and Exchange Board of India.

In India, we have primarily two exchanges

1. National Stock Exchange (NSE)
2. Bombay Stock Exchange (BSE)

NSDL is the depository for NSE and was established in 1996.

CDSL is BSE’s depository and was established in 1999.

However, for various transactions, both of them can use either of the depositories.

NSDL is promoted by IDBI Bank Ltd., Unit trust of India and NSE. The significant shareholders of this are HDFC bank, and Standard charted, Oriental Bank Of Commerce, Axis bank limited, Citi bank, Deutsche Bank, State Bank of India, HSBC, Canara bank and Dena bank to name a few.

CDSL

CDSL is supported only by BSE updated till December 2019. The significant shareholders of CDSL are HDFC Bank, Standard Charted Bank and Canara Bank.

A broker is responsible for opening a Demat account under a depository on the client’s part, and the securities are stored in that account in a dematerialized form.

Demat accounts maintained with CDSL have 16 numeric digits in them, and NSDL Demat accounts have two alphanumeric digits- ‘IN’, which signify INDIA and 14 numeric digits.

The active investor accounts in NSDL are 1.44 crores, in contrary to 1.06 crores of CDSL.

The online portal of NSDL is www.nsdl.co.in.

The website for CDSL is www.cdslindia.com.

The distinction between CDSL and NSDL include different Demat account number, their promoters, establishment years. However, their functions are the same, which include

• Keeping of Demat accounts
• Rematerialisation and dematerialization
• Settlement of Trade
• Transfers of shares
• Market and off-market transfers
• Distribution of non-cash corporate actions
• Nomination/transmission
• Account opening
• Account statement
• Editing account details

One must emphasize the duty of NSDL because the transformation from physical certificates to electronic certificates was, by and large, without any significant glitches.

What is the Demat Account Number, DP ID and Customer ID?

Every Demat account is assigned a unique 16-digit number called the Demat Account Number.

The Depository Participant or the DP is accountable for this purpose.

One must note that the Demat Account Number is also known as Beneficiary Owner ID or BO ID when it comes to CDSL.

CDSL Demat accounts have 16 numeric digits, while NSDL Demat accounts have two alphanumeric digits (‘IN’) and 14 numeric digits.

An example of a Demat Account Number of NSDL is IN12345678901234. Similarly, an example of a Demat Account Number of CDSL is 1234567890098765.

Although the Demat account number and the DP ID (Depository Participant Identification) are considered synonymous, they have a stark difference. The DP ID has nothing to do with the Demat Account.

The depositories CDSL and NSDL primarily assign the DP ID to a Depository Participant.

A Depository Participant is an intermediary between the various investors and a depository. They are the agents of NSDL and CDSL.

They may include vaults, financial institutions, any other establishment that guarantees security.

A Demat account number is a sequence of the DP ID and the customer ID of the Demat account holder. Usually, the first 8-digits of the Demat account number is the DP ID, where the last 8-digits of your Demat account number is the Customer ID of the account holder.

Considering CDSL, suppose your Demat account number is 1234567890654321; in such a case, 12345678 is the DP ID, and 90654321 is the customer ID.

Likewise, for NSDL, if a Demat account number is IN12345698765432, in that case, IN123456 is the DP ID, and 98765432 is the customer ID of the Demat account holder.

The Customer ID is the identification number that is unique for each individual and is assigned to you at the time of account opening.

Know more about NSDL and CDSL.

For any further queries regarding NSDL CAS, one can visit https://nsdlcas.nsdl.com.

You can also reach out to them at https://nsdl.co.in/contactus.php.

To register your feedback about CAS at NSDL, visit-CASfeedback@nsdl.co.in.

For any query about CDSL CAS, one can contact them through the Toll-free number 1800-22-5533. The official hours for contact are 10:00 A.M. to 6:00 P.M from Monday to Friday.

The official email address is complaints@cdslindia.com.

All about the Karvy Stock Broking pledging client’s shares

The NSE announced Karvy Stock Broking Limited (KSBL) on November 27, 2019, as a defaulter for non-compliance with various regulatory provisions of the bourse and suspended its membership.

The Securities and Exchange Board of India (Sebi) banned KSBL from carrying out any new transactions for supposedly stealing money and securities.

They misplaced the enormous amounts of the various investors to back its real estate arm, namely Karvy Realty.

SEBI had initially miscalculated the amount transferred by Karvy to be Rs 1,096 crore to its real estate business. However, the actual amount was approximate Rs.2,300 crore as per the reports by National Stock Exchange.

Since KSBL is expelled from the NSE membership and additionally, Sebi also banned the firm from taking new business, the exiting customers can’t carry out any further transactions through KSBL.

Stock exchange executives have notified that all the prior clients of KSBL have got their securities back and transferred to another brokerage firm.

They could also have possibly received the equivalent amount of their securities into their respective bank accounts.

Depositories and stock exchanges against Karvy will take disciplinary action.

How to Register for NSDL CAS?

To register for NSDL CAS, the following steps need to be carried out.

• At first, the concerned person needs to visit the online portal of https://nsdlcas.nsdl. com from a suitable device.
• After successful login, they need to select the NSDL E-CAS option to sign up for this facility.
• There, they will need to enter their nine-digit CAS ID.
• In case they are not aware of the CAS Id, they can avail the service ‘know your CAS ID’, which is available in the E-Cas section.
• Then the candidate will have to enter a valid ten-digit PAN Number.
• After entering the correct Captcha, they will have to Click Submit Button.
• After selecting a suitable DP NAME & ID (Eg: XYZ Pvt. Ltd.(IN123456), the person will need to enter their Client ID (Eg: 09876543)
• After entering the correct Captcha, they will have to Click Submit Button, and there will be successful registration.

How to Register for CDSL CAS?

• At first, the concerned person will have to visit: https://www.cdslindia.com/cas/logincas.aspx.
• After login, they will need to enter their Put in your PAN Card detail and BO ID.
• Then they will have to enter their DOB and Click on the Submit option.
• The portal will send a One Time Password (OTP) to their registered mobile number. After entering the OTP, they will click on the Submit button.
• After successful submission, the candidate can download the e-CAS statement.

What does NSDL CAS Look Like?

The NSDL CAS is majorly a 7-page document with a high-quality display.

The first page is a welcome letter that contains the fundamental and essential details of the CAS statement.

The upper part of the page has access to five tabs, namely-

• Summary
• Holdings
• Transactions
• Your Account
• About NSDL

Upon clicking on these options, the portal will redirect one to the appropriate pages.

The third page comprises the holdings’ essential details like how much amount has been invested in the stocks.

Besides, information about the mutual funds along with their NAV is also mentioned on page number 3.

Page 4 has the details of all the activities for the period for which the CAS is being created. This includes all the purchased and sold shares.

It summarizes all purchases or redemptions made in a specified period.

Page 5 is equipped with the customer care data with an exit option.

Page 6 and 7 have essential features about the NSDL and the CAS. They are informative pages.
What does CDSL CAS look like?

The CDSL CAS is not as illustrated as the NSDL CAS.

Although it not much beautiful, it serves its purpose.

All details about the Demat and Mutual Fund holdings are mentioned in an orderly manner. The presentation is a bit dull.

The details do not include the Folio number, unlike the NSDL CAS.
What is ISIN Code?

ISIN is the acronym for International Securities Identification Number.

Indian is part of the International Standards Organization or the ISO.

It sets the standards for the security possessions of the countries which fall under it.

ISIN is a 12-digit number identification number used for distinguishing the security of any country. The 12 digits are a series of alphanumeric numbers.

The whole number can be divided into three subsections:

• prefix numbers
• basic digits
• suffix number

The prefix is a set of two letters that signify the country possessing security. The code for India is IN. Hence all the securities of the Demat start with an IN.

Furthermore, the basic digit comprises a string of nine alphanumeric numbers, which convey more details about the company and the type of security.

Lastly, the suffix number is a single digit used for authenticating the ISIN number.

In India, the ISIN number is assigned to the various securities by the Securities and Exchange Board of India, SEBI. The G-Sec RBI is responsible for authorizing the ISIN for Government securities.

ISIN number plays a very crucial role while transferring shares from one Demat to some other Demat.

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY): The Ayushman Bharat Scheme (PMJAY) was devised by the National Health Protection Mission Council in an effort to make healthcare insurance more accessible for the economically vulnerable masses of India. The scheme was officially launched on 25^th September of the same year, as per Prime Minister Hon’ble Shri. Narendra Modi’s instructions. There have been over 4.5 lakh beneficiaries of this scheme as of September 2019.

• Features of Ayushman Bharat
• Beneficiaries covered under Ayushman Bharat
• Other features of Ayushman Bharat

Features of Ayushman Bharat

Some of the features of the Ayushman Bharat Scheme are-

• The scheme provides each family with a sum total of five lakh.
• The scheme is aimed to provide basic affordable healthcare to families which belong to the poor and vulnerable population as per the Socio-Economic Caste Census of 2011.
• The scheme has benefited around 50 crore families, making it the largest healthcare scheme in the world.
• The scheme is designed to cover most diseases and procedures- all of which are included in a list released by the government covering 1354 different treatment packages and approximately 23 different types of diseases including heart ailments, knee and hip implants, etc.
• The coverage includes 3 days of pre-hospitalisation and 15 days of post-hospitalisation care.
• One of the main aims of the scheme is to promote cashless transactions for secondary and tertiary healthcare procedures. Thus, the scheme provides the beneficiaries with an e-card.
• The e-card can be used to avail any of the listed services at an impanelled hospital, whether it is public or private.
• Thus, instead of cash, the beneficiary can avail all healthcare with the help of the e-card.
• No hospital is allowed to charge additional amounts for medical treatment.
• The policy also covers pre-existing diseases from the first day of availing, along with pre and post hospitalization expenses.
• Everyone, irrespective of age, gender or family size can apply and avail of the benefits of this scheme.
• The Ayushman Bharat scheme will include the ongoing centrally sponsored healthcare schemes- The Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS) in an effort to generalize healthcare schemes.
• It is not essential to have an Aadhar card to be eligible for this scheme. However, the beneficiaries must have the prescribed ID in order to receive free treatment at the hospital.

Beneficiaries Covered under Ayushman Bharat

The Government used the Socio-Economic Caste Census of 2011as the primary database to identify the beneficiaries of this scheme. The categories which will be included in the scheme are –

For Rural

The 71^st National Sample Survey Organisation revealed that 85.9% of rural households had no access to any healthcare insurance. All households which belong to one of the six deprivation criteria, namely, D1, D2, D3, D4, D5 and D7 can avail of the scheme. The deprivation criteria are as follows:

• D1- House has only one room with kucha walls and kucha roof.
• D2- An absence of adult members in the age range of 16-59.
• D3- A family with a female head and an absence of an adult male member between the ages of 16-59.
• D4- There are no physically able adult members in the family and at least one physically challenged member.
• D5- Family belongs to the SC/ST category.
• D7- The main source of income in the household is obtained by manual casual labour. The family is landless.

The following families are also included in the scheme

• Families without shelter
• Livelihood depends on alms
• The family works as manual scavengers
• They belong to backward tribal communities
• They part take in legally contracted labour

For Urban

The workers residing in urban areas who are included in this scheme are-

• Ragpickers
• Beggars and destitute
• Domestic laborers
• Street hawkers/vendors/ other types of service providers
• Construction workers/plumbers/welders/security personnel/coolie
• Sweepers/sanitary workers/gardeners
• Artisans/tailors/workers based at home
• Transport workers/ drivers/helpers/rickshaw pullers
• Shopkeepers/assistants/waiters/delivery personnel
• Electricians/mechanics/other handymen
• Cloth washers

Other Features of Ayushman Bharat

• The beneficiary does not need to fill any applications or register to avail the scheme. The concerned Department will send all identified beneficiaries their unique registration numbers.
• The Ayushman Bharat National Health Protection Mission Agency will overlook the management of the scheme.
• States/UTs can implement the scheme either through an insurance company or directly through the Trust or by an integrated model.
• Private hospitals with more than 10 beds can apply to be included under the Ayushman Bharat scheme.
• All empanelled hospitals will have a support system named ‘Ayushman Mitra’ to help patients and coordinate with the beneficiaries and the hospital as per the guidelines of the Empanelled Health Care Provider (EHCP). Ayushman Mitra will run help desks, check for eligibility and also enroll the beneficiary to the scheme.
• All payments will be done as per the package rate pre-determined by the Government. Hospitals that are NABH or NQAS accredited can charge higher rates for the packages depending on the procedure to be performed.
• The expenses of the scheme will be divided among the Central and the State in the ratio of 60:40 (for all states and union territories), 90:10 for the North-Eastern states and 100:1 for the states of Jammu and Kashmir, Himachal Pradesh and Uttarakhand.

Equity Linked Saving Scheme (ELSS): ELSS, commonly known as Equity Linked Savings Scheme, is a varied, unlimited, equity-oriented mutual fund scheme.

In the Equity Linked Savings Scheme, 80 percent of the portfolio amount is a must requirement for investment in equity funds.  You must hold a minimum lock-in period of three years from the date of allotment of units to invest in the scheme.

In recent times, the Equity Linked Savings Scheme has become one of the most in-favour tax-saving options invested by many.

This article will guide you through the benefits and concerns regarding Equity Linked Saving Scheme.

• A Brief On Equity Linked Saving Scheme or ELSS
• Benefits Of Investing In Equity Linked Saving Scheme (ELSS)
• Concerns Regarding ELSS

A Brief On Equity Linked Saving Scheme or ELSS

An equity-linked savings scheme is the only kind of mutual fund that falls eligible for tax deductions under the provision of Section 80C of the Income Tax Act, 1961.

In this scheme, you can claim a tax rebate of up to Rs 1,50,000 and save up to Rs 46,800 a year but only by investing in mutual funds.

ELSS funds offer potential inflation-beating returns in the tax-saving investment.

An equity-linked savings scheme portfolio comprises equities, while they hold some exposure towards fixed-income securities.

Benefits Of Investing In Equity Linked Saving Scheme (ELSS)

A few benefits of investing in ELSS schemes are as follows-

Tax Benefit

An individual or HUF can claim a deduction from the total pay package. The amount claimed can be up to Rs. 1.5 lacs under the Income Tax Act, 1961.

Equity Linked Saving Scheme refers to tax-saving mutual funds. This scheme falls under Exempt-Exempt-Exempt, the EEE status.

EEE or Exempt-Exempt-Exempt status refers to the amount that can be invested, income-earned and undergoes maturity proceedings and those which are exempt from income tax.

• For the Income Earned category, the dividend received from the Equity-linked saving scheme is exempt from tax under Section 10(35) of the Income Tax Act, 1961
• For the Maturity Proceedings category, the long-term capital gain up to an amount of Rs. 1 lac is exempt from tax. This occurs under Section 112A of the Income Tax Act, 1961. The gain above Rs 1,00,000 is chargeable to tax at a standard rate of 10 percent.

Minimum Lock-in Period

Equity Linked Saving Schemes hold a standard lock-in period of three years from the date of allotment of units. Upon the expiration of the three-year lock-in period, these units can be redeemed or switched.

During this three-year lock-in period, investors cannot pledge, sell, transfer, redeem, or even alter their holding in the fund in any manner.

The Equity Linked Saving Scheme holds the lowest lock-in period compared to other investment options that fall under the 80C deduction.

Any such PPFs can have a lock-in period of 15 years, the NSC investments hold a limit of six years, and bank fixed deposits eligible for tax deduction are locked a minimum of five years.

Higher Rate of Return

About a minimum of 80 percent of the portfolio amount from the total fund is required to be invested into equities. This provides a higher return in comparison to the other instruments.

Generally, 14 to 16 percent of the superior returns are given compared to other tax-saving options in the long period of about five to seven years.

You cannot remain ignorant of the risks as all the ELSS schemes are equity-based and market-linked.

However, the AMC’s design of ELSS schemes are based on the large-cap, mid-cap, and small-cap and the risks and returns vary. Therefore, ELSS schemes provide you flexibility in taking the risk of investing in the service or a scheme.

Flexible and Disciple

Investment in Equity Linked Saving Scheme can be made using a lump sum amount, a full-time investment done in a single time. The investment by the Systematic Investment Plan or SIP is a small investment scheme spread over some time.

Equity Linked Saving Scheme holds no restriction on the maximum amount that can be invested. However, the only condition is that you need to invest to a minimum amount of Rs. 500.

The ELSS scheme offers the availability of monthly investments, where you can get to discipline your investment and tax planning.

Generally, it is recommended that the investors follow the SIP route as it spreads the investment over a longer duration. It even avoids the risk of downside market peaks.

High Level of Transparency

In the ELSS scheme, you can track the changes in your portfolio value regularly.

You get the freedom to access this information and help yourself in making more educated decisions regarding the overall return from your diversified portfolio.

In the ELSS scheme, you can maintain this level of transparency, which is not available in the case of any other tax saving investment option.

Dual tax benefit

As mentioned before, the amount invested into the ELSS scheme qualifies for deduction up to limits specified under Section 80C.

But, even the profit or the capital gain obtained from the Equity Linked Saving Scheme is tax-free.

However, if you see a return from National Savings Certificates or tax-saving bank FDs, you are taxable, and the amount gets added to the income.

Only PPF schemes offer a tax-free return but hold a  maturity period of 15 years.

Concerns Regarding ELSS

A few things which are required to keep in mind before investing in the Equity Linked Saving Scheme is-

• Inherent Risk: The Equity Linked Saving Scheme invests funds in the equity stock market. So, all the risks associated or involved with equity investments get connected to the ELSS scheme.
• Premature withdrawal not allowed: You cannot withdraw your funds before the standard lock-in period limit of three years. Other instruments like PPF and bank deposits permit premature withdrawal provided that you abide by the restricted conditions.
• Selection of Scheme: Lots of Equity Linked Saving Schemes are available in the market. Therefore, before you invest, you should do a thorough background check of the ELSS fund. Ensure you check the performance before deciding to invest. This check is similar to the checks done before investing in other general mutual funds, like, compassion, asset under management, low investor ratio, and ample diversification.

Sukanya Samriddhi Yojana: Sukanya Samriddhi Yojna is a scheme that came into effect on 2nd December 2014 and it was launched with an initiative to help girl children from various malpractices in the Indian Community. It deals with problems regarding education and marriage and directs the parents of a girl child to make systematic investments for their daughter’s marriage, education, and future.

• Opening of SSY Account
• SSY Account Deposits
• Interest on Deposits
• Maturity of SSY Account
• Premature Closure of SSY Account
• Withdrawal from Sukanya Samriddhi Yojna Account
• Tax Benefit under SSY Account
• Comparing Public Provident Fund (PPF) and Sukanya Samriddhi Account

Opening of SSY Account

Only a natural or a legal guardian has the authority to open an SSY account of their girl child. Anytime before the age of 10, this account can be opened.

Some points regarding this account are as follows;

• Only one account can be operated by the guardian in the name of the girl child. Multiple accounts cannot be operated for the save girl child.
• A maximum of only two accounts for two girl children is allowed to be opened by the guardian. The third account can be opened in the event of the birth of twin girls or if the first birth itself results in triplets.
• The Central Government has authorized SSY accounts to be opened in post offices and commercial bank branches (such as State Bank of India, Bank of Baroda, Punjab National Bank, etc.)
• If a girl child is a resident Indian citizen, she is eligible to open an SSY account at the time of opening the account and remains so until the account’s maturity period or closure. The scheme is not available for Non-resident.

SSY Account Deposits

• An SSY account can be opened with a first-time initial deposit of Rs. 1,000 and after that in any amount in multiples of Rs. 100.
• The required minimum amount to be deposited in each financial year is Rs. 1,000 (01st April to 31st March). The maximum limit on the amount during a financial year comes to Rs. 1,50,000.
• From the date of opening of such an account till the completion of 14 years, the deposits can be made in the account.
• An irregular account (in which a minimum of Rs. 1,000 per financial year has not been deposited) may be regularised by paying a penalty of Rs. 50 per year along with the minimum deposit for the years of default at any time before the completion of the fourteen years from the date of opening of the account.
• The deposit can be made in cash, cheque, or demand draft.
• For deduction under Section 80C, deposits made in the account are eligible, subject to a maximum limit of Rs. 1,50,000.

Interest on Deposits

• The highest Small Saving Scheme under SSY is the interest offered. The current interest rate is 8.1%.
• The Government notifies the interest rate for every year. The rate of interest is 0.75 bps or 0.75% more than the comparable G-Sec yield.
• Interest is compounded annually.
• For the calendar month, interest is calculated on the lowest balance in an account between the close of the 10th day and the end of the month.
• The account holder can opt for monthly interest.
• On the balance in the account, the interest is payable till the final closure of the account.

Maturity of SSY Account

• The maturity period of the account comes after the completion of 21 years from the date of opening the account.
• If the marriage of the account holder takes place before the completion of 21 years, the account is considered as matured. The account holder should not be below 18 years at the time of marriage.
• The interest keeps accruing until the account is finally closed by the account holder even though after the maturity period, no operations are permitted.

Premature Closure of SSY Account

• The account is closed immediately if the account holder passes away. The guardian of the account holder will then receive the balance along with interest (till the month preceding the month of premature closure of the account).
• It is recorded in writing, for security purposes, as the reason for the premature closure of the account. Only in medical support in life-threatening diseases, etc, or any other extreme reason can a premature withdrawal be authorized.

How to Transfer Sukanya Samriddhi Yojna (SSY) Account?

Withdrawal from Sukanya Samriddhi Yojna Account

• Up to 50% of the balance at credit at the end of the preceding financial year is allowed to be withdrawn in case of investment in higher education and marriage.
• When the account holder’s girl child reaches the age of 18 years, then only withdrawal from the account is allowed.

Tax Benefit under SSY Account

Exempt-Exempt-Exempt (EEE) is the status proclaimed by the SSY account which means;

• Under Section 80C of the Income Tax Act, 1961, the contribution made to the SSY account is eligible for deduction with a maximum limit of Rs. 1,50,000
• Under Section 10(11A) of the Income Tax Act, 1961, the accrued interest which is compounded annually against this account is exempted from tax.
• Under Section 10(11A) of the Income Tax Act, 1961, withdrawal proceeds are also exempted from tax which may be either premature or matured.

Comparing Public Provident Fund (PPF) and Sukanya Samriddhi Account

PARTICULARS	PPF	SSY ACCOUNT
Eligible person	Any Indian Citizen	Only girl child fewer than 10 years of age can open an account through the help of parents or guardian
Maximum investment	Rs.1,50,000/year	Rs.1,50,000/year
Minimum investment	Rs.500/per year	Rs.1,000/per year
Interest rate for 2015-16	8.7%	9.2%
Deductions allowed	Under Section 80C	Under Section 80C
Interest and withdrawals	PPF Withdrawals are Tax-free	Tax-free

How to Claim HRA: House Rent Allowance, generally known as HRA, is an aggregate paid by employees as part of their earnings. This is mainly done as it helps offer employees tax profits towards the payment for housings every year.

How much HRA allowance requires to be paid to the employee is made by the employer based on several different conditions such as the city of residence and the salary. The house rent allowance serves to be quite advantageous to salaried employees in India, and it is regulated by the provisions of Section 10(13A) of the IT Act.

To claim HRA, you need to submit the PAN number of your house owner, receipts and Lease agreement to your landlord. In this article, we inform you about how to claim HRA from the employer. What is a rental agreement? Should you get the rental agreement made registered and notarized? Can you claim HRA by paying rent to parents, brother, sister, wife/ spouse or sister–in–law? Do you need to get a revenue stamp? What is the format of rent receipts, how many rent receipts to submit?

• Basis on Which HRA is Calculated and Decided
• How to Acclaim HRA from your Employer?
• Rental Agreement and Notary
• Rent Receipts
• Rental Agreement and Stamp Paper
• FAQ’s about HRA

Basis on Which HRA is Calculated and Decided

Mainly, HRA is decided based on the salary. Although some other elements also affect HRA, for example, the city in which the employee lives. In case the person lives in a metro city, she or he is entitled to an HRA equal to 50% of the salary.

The entitlement is 40% of the wage for cities other than a metro area. To calculate the HRA, the earnings are explained as the aggregate of the basic salary, dearness allowances, and commissions. If a worker does not receive a dearness allowance or a commission, then the HRA will be around 40% – 50% of the salary. The actual HRA provided in all probability will be the lowest of the given three provisions:

• The exact amount received as the HRA from the employer.
• The actual rent that is paid should be less than 10% of the basic earnings.
• In case you’re staying in a non-metro city, 40% of the basic salary and 50% if you live in a metro city.

How to Acclaim HRA from your Employer?

The employer issues HRA or House Rent Allowance to the employee to meet of the employee’s accommodation for his residing causes. Income Tax Department has systemized the way of declaring HRA by introducing Form 12BB.

Your TDS will be adjusted, so you don’t have to pay tax on HRA, and your final tax liability will be deliberated accordingly. To acclaim HRA from your employer, you need to provide the following information to your employer:

• Reside physically: you must reside physically in the house mentioned by you for claiming HRA exemption. In case your landlords are your parents, you have to ensure that they include the rental income too while filing their returns.
• Rental agreement or lease: you have to sign up for a valid lease with the landlord. This lease will have information on the lodging on a lease, the rent agreed, and the lease period. For the shared accommodation case, you also have to mention the number of tenants co-sharing the accommodation, the ratio in which rent is divided, and how the utility bills are split and the before mentioned details in the rent agreement. Your employer might ask for this document.
• PAN number of landlord: it is mandatory to obtain the PAN number of the landlord if the annual rent paid by you is more than Rs. 1,00,000 and report it to the employer to acclaim HRA exemption. If PAN is not available by chance, then your landlord must be willing to offer you a declaration to this effect. Alongside the statement, you need to gain ‘Form 60’ dully filled up by your landlord, in case the PAN number is not available. If your landlord is not offering you a PAN number, the maximum amount of HRA that you can claim is Rs. 8,333.
• Rent Payments: Instead of cash, try to make payments, preferably through banking channels. Using banking channels, you can provide an electronic trail of money for the transactions that had occurred.
• Rent Receipts: The employer must collect proof of rent payment from permitting you the exemption on HRA. The employer will offer you the exemption on HRA based on these receipts. Tax exemption will be evaluated only based on the rent receipt given by the employee mentioning the amount paid. Any amount paid above or over the rent receipt shall not be considered for exemption by the employer. It is mandatory to produce rent receipts to the employer for claiming HRA exemption for the monthly rent paid more than Rs. 3000 per month. Typically, employers require receipts for three months or so.
• Form 16: HRA or House Rent Allowance exemption would be evaluated by your employer and shown in Form 16 if rent receipts and rent agreement were submitted on time. One needs to show HRA in the calculation of Income from Salary in ITR.
• TDS: Tenants paying Rent to NRI landlords should remember to deduce TDS of 30% before making the payment towards rent. Remember to conclude tax at source at 5% from the rent paid to your landlord if you are paying rent above Rs. 50,000 per month. Interest at 1% per month is levied if you forget to deduct it and 1.5% per month where TDS is deducted but not deposited. It would also give you a penalty of Rs. 200 per day for the period of delay.

Rental Agreement and Notary

Notarization usually alludes to check and giving a seal of validness to a document. This is done by a Notary who is delegated under the Notaries Act. Registration then again in registering the record with a neighbourhood Sub-Registrar office. The systems for both are represented by various Acts and can consequently be considered two completely multiple methods.

In India, it isn’t required to notarize a tenant contract. As long as it is imprinted on Stamp paper and is signed by the two parties and two observers, it is viewed as restricting. Nonetheless, if you wish to notarize it, you may do as such.

The work of the notary official is to confirm everything in the document and validate the record whenever everything is discovered to be authentic about the report, just as the deponent.

A Notary public is somebody delegated by the State/Central Govt. what’s more, his/her essential obligation is to dissuade fakes and imitations by directing/seeing record marking and realness check. Aside from this, Notary Public additionally performs duties like promise organization, testimony marking, record support and performing wedding functions.

Rent Receipts

There is no proper format of rent receipts. It should include the landlord’s name, rent amount, address of the rented place, landlord’s PAN information and the duration for which rent is received.

You don’t require the revenue stamp if you are paying rent via cheque or online. Revenue stamp is only required if payment is made in cash and receipt is more than Rs. 5000.

Rental Agreement and Stamp Paper

According to the Law, when one does a few exchanges like purchasing and selling land, business arrangements, renting property, one must make pay Stamp Duty to Central/State Govt.

The obligation to be paid fluctuates from one state to another, and if a state doesn’t have its Stamp Act, it will be supervised by the Indian Stamp Act. Stamp papers are verification that the necessary Stamp Duty has been paid to the Govt., similar to receipts.

The Stamp Paper esteem (Stamp Duty) relies on State to State. For instance, in Delhi, the Stamp Paper sum gave by Government to the Agreement is Rs. 50 whereas in Bangalore Rs. 20.

The Stamp Paper worth of Rent Agreement isn’t settled on the lease fixed between parties yet is chosen according to the stamp obligation set by the State Government. The scope of Stamp Duty for tenant contract is, for the most part, Rs 20, Rs 50 and Rs 100. You confirm with your manager if there is some cutoff on stamp paper.

We hope that this article helped you assess and understand how to claim HRA from your employer, rent receipt and rental agreement format.

FAQ’s about HRA

Question 1.
What are the most significant advantages of HRA?

Answer:
A significant advantage of the house rent allowance is that it serves as a medium to deduce the taxable income, leading to a reduction in the tax that you have to pay.

Question 2.
Can I acclaim HRA while filing ITR if I cant submit proof to the employer on time?

Answer:
Yes, you can acclaim HRA while filing ITR if you cant submit proof to the employer on time. During Income Tax Act doesn’t restrict the employee from claiming tax exemption for HRA while filing returns.

Still, there will be a discrepancy in the salary income reported in Form 26AS by your employer opposite that reported by you in your return. This may be swift for the department to send a communication seeking a response regarding the discrepancy.

If you haven’t acclaim HRA exemption from your employer, you can claim it directly. This exempt amount has to be deducted from your taxable earnings. The total net amount is shown as your’ income from salary in your income tax return.

If you acclaim HRA exemption in your tax return, you must still maintain rent receipts and lease agreement safely in your records if the assessing officer asks for them afterward.

Question 3.
Can I claim HRA exemption paying rent to my spouse/wife?

Answer:
No, you cannot. If you pay your rent to your spouse, this doesn’t qualify for HRA exemption because, as per the income tax department, you are originally supposed to stay with your spouse.

Question 4.
Can I claim HRA if it’s not part of my salary?

Answer:
Yes, if you are making payments in the rent for unfurnished or furnished lodgings occupied by you for your residing purposes but do not receive HRA from your employer, you can claim deduction under section 80GG.

Question 5.
Can I acclaim HRA for two houses?

Answer:
No, unfortunately, you cant. The HRA advantages are only available for one house in the concerned city of the workplace.

Question 6.
Can I claim HRA exemption paying rent to my parents or brother/sister-in-law?

Answer:
Yes, you can claim exemption on rent paid to others, including parents, brother or sister-in-law.

Question 7.
What is a Rental Agreement?

Answer:
A rental agreement is a commitment of rental mainly written between the owner of a property and a tenant who desires temporary possession. It is usually different from a lease which is more traditionally used for a fixed term.

The agreement identifies the parties, the property, the amount of rent for the period, and the rental period, as a minimum. The property owner might be referred to as the landlord/ lessor and the renter as the tenant/ lessee.

It is essential to have a rental agreement as it protects a landlord and tenant’s rights. It is also a method to avoid unnecessary eviction and hikes without prior notice of a minimum of one month. The rent agreement is also done online through the drafter.in, legaldesk.com, etc. The standard rent agreement is usually made of only 11 months.

Question 8.
What should you include in a rental agreement?

Answer:
A rental agreement or residential lease is the blueprint of a tenancy, and it lays out the right and responsibilities of both the tenants and landlords. It is a binding contract that both the parties can enforce in court and a convenient document full of business details like how long the tenant can occupy the property and the amount of rent due each month. Here we have included a list of what you should include in a rental agreement:

• Names of All occupants and tenants: Every adult who resides in the rental, including both members of an unmarried or married couple, should be named as tenants and sign the rental agreement. Requiisiting all adult occupants to be official tenants is a form of additional insurance for landlords.
• Description of Rental Property: Incorporate the complete address of the property (including unit and building number, if applicable). You will also want to note any specific parking spots or specific storage that are included. For instance, if the rental consists of assigned parking, be sure to write in the site or stall number.
• Term of the Tenancy: Rental agreements create short term tenancies that renew automatically until the landlord or tenants terminate. In contrast, leases make tenancies that end after a specific term. Whichever you use, be sure: note the starting date, the length of tenancy and the expiration date in case of lease.
• Rental Price: never write the amount of rent- spell out when and how it is being paid, like by mail to your office. To avoid confusion, spell out details like a. method of accepting payments. b. whether you charge a late rent charge, the amount of the cost, and the grace period. c. any charges if a rent check bounces.
• Security Deposits and Fees: Refrain from some of the most common disputes between tenants and landlords by being clear about the amount of security deposit, how you might use the deposit, whether you expect the tenant to replenish the deposit in the event you have to make a deduction mid-tenancy, when and how you will return the deposit and account for deduction after the tenant moves out, any non-refundable fees etc.
• Repair and Maintenance Policies: your best defence against rent-refusing battles and hassles over security deposits clearly explains your repair and maintenance policies.
• Landlords right to enter rental property: to avoid tenant claims of illegal entry or violation of privacy rights, your rental agreement or lease should clarify your right to access the rental.
• Rules and Important Policies: Some of the primary essential practices you can include are no illegal activity, smoking, pets etc.
• Contact information: Consider tenants requiring to contact you in writing about specific matters. Although instant messaging and texts might work for some discussions, you should be able to keep a reliable and printable in the event you ever need to show the court record of communications with your tenants.
• Required landlord disclosure: federal, local, and state laws may require you to disclose specific information in your lease or rental agreement.