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Social media greatly influences investment decisions

Faqs of Insurances — Fri, 06 Jun 2025 07:12:00 +0000

Social media is a big part of our daily lives, even affecting how we learn about money and investing. Platforms like Reddit, YouTube, Twitter (now X), and Instagram are choc full of people talking about stocks, mutual funds, and cryptocurrencies. But while social media makes investing seem easy and exciting, it also comes with some serious risks.

Too much hype, not enough truth
In recent years, we've seen many examples of social media pushing people to make risky investments. A few posts or videos can go viral, causing thousands of people to buy a stock just because it’s popular, not necessarily safe. Many influencers or "finance gurus" give advice without having the right knowledge or licences. Some do it just to get views or make money from promotions.

This kind of content can mislead people. It may leave out important details or risks. As a result, many new investors end up making decisions based on excitement or fear, instead of careful thinking.

Echo chambers and FOMOSocial media platforms often show you more of what you already like or believe. If you follow high-risk investing content, you’ll keep seeing more of it. This creates an echo chamber where people only hear ideas they already agree with and miss out on other important viewpoints.

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Also, when people see others showing off big profits, it creates FOMO or the fear of missing out. They jump into investments just because others are doing it, without checking if it’s right for them.

Investing based on emotion
Many social media posts are designed to grab attention, not teach. They often show big wins or dramatic losses. This makes investing feel like a game, where people act based on emotion—like fear or greed—instead of facts. This kind of behavior can lead to frequent buying and selling, which hurts more than it helps.

Some influencers also promote certain products or stocks because they get paid to do so. But they may not always say that clearly. This can trick people into trusting advice that isn’t really honest.

Some good news
Not everything on social media is bad for investors. Some trusted voices are now sharing helpful and accurate information online. For example, SEBI-registered advisors, financial educators, and mutual fund companies are posting simple videos, articles, and tips to help people learn.

If you follow the right accounts and ask smart questions, like “Is this person qualified?” or “What’s the risk?”, social media can help you learn more and make better choices.

Final thoughts
Social media has changed how people learn about investing. It can help, but also harm. The key is to be careful, stay curious, and not believe everything you see online.

In the end, investing should be about your goals, not what’s trending. Take your time, learn from trusted sources, and don’t let hype influence your decisions.

*Authored by: Piyush jain, Founder,Paras Finvest.

Disclaimer: The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to the same. TIL does not guarantee, vouch for or necessarily endorse any of the above content, nor is it responsible for them in any manner whatsoever. The article does not constitute investment advice. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified.

This story originally appeared on: India Times - Author:Faqs of Insurances

With the RBI's repo rate cut in 2025, fixed deposit interest rates are expected to decline, impacting conservative investors

Faqs of Insurances — Fri, 06 Jun 2025 02:47:00 +0000

Fixed deposit (FD) investors will soon start to feel the impact of the Reserve Bank of India's (RBI) third repo rate cut in 2025. On June 6, the RBI’s Monetary Policy Committee (MPC) announced a 50 basis point reduction, bringing down the repo rate to 5.5%. As a result, banks will start reducing their fixed deposit interest rates in response to the lower cost of borrowing. This trend spells concern for conservative investors who rely heavily on FDs for steady and secure returns. Investors are now faced with a narrowing window to lock in higher interest rates, as further cuts or rate stagnation could lead to even lower FD returns in the near future.

Also read: New FD rates from June 1, 2025: PNB, Canara Bank revise interest rates across tenures

FD rates may decline soon

A downward trend is anticipated in the upcoming months, even though it might take some time for the effects of the repo rate cuts to take effect in retail deposit rates. This implies that, particularly for senior citizens, who usually receive interest above regular rates, the current FD interest rates may be among the highest available for some time.

Axis Bank revises ATM transaction fees effective July 1, 2025: Check revised charges

Lock in high FD rates

Many banks are still offering attractive FD rates. For senior citizens, some banks continue to provide interest rates of 8% or more, making this a crucial opportunity to lock in higher returns before further rate revisions kick in.

Bank Name	Interest Rates (p.a.)
	Highest slab
	%	Tenure
SMALL FINANCE BANKS
AU Small Finance Bank	8.25	18 months
Equitas Small Finance Bank	8.55	888 days
ESAF Small Finance Bank	8.25	444 days
Jana Small Finance Bank	8.55	Above 1 year to 3 years
NorthEast Small Finance Bank	9.00	18 months 1 day to 18 months 2 days
Suryoday Small Finance Bank	8.80	Above 30 months to 3 years
Ujjivan Small Finance Bank	8.55	18 months
Unity Small Finance Bank	9.10	1001 days
Utkarsh Small Finance Bank	8.75	2 years to 3 years

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How safe are Small Finance Banks?

According to the AU Small Finance Bank website, “Like other types of banks in India, the RBI regulates and governs SFBs. Therefore, all the banking norms, such as Statutory Liquidity Ratio Requirements, Cash Ratio Reserve Requirements, etc., apply to them. Moreover, the RBI also defines aspects like Eligibility Criteria and Mandatory Promoter Contribution for SFBs. In other words, there are stringent regulations that SFBs must adhere to for their operations. As the RBI regulates the segment, SFBs are as safe as any other type of bank.”

Are small finance banks covered under DICGC?

Yes, small finance banks are covered under Deposit Insurance and Credit Guarantee Corporation (DICGC). Under this, each depositor in a bank is insured up to a maximum of Rs 5,00,000 for both principal and interest amount held by the investor.

This story originally appeared on: India Times - Author:Faqs of Insurances

RBI repo rate cut by 50 bps: The RBI has cut the repo rate and other key rates by 50 bps in today's monetary policy announcement

Faqs of Insurances — Fri, 06 Jun 2025 00:42:00 +0000

The Reserve Bank of India (RBI) has cut the repo rate for the third time this year by 50 basis points. With the latest cut, the repo rate now stands at 5.5%. The cut in the repo rate brings cheers for borrowers but bad news for fixed deposit investors. The banks have been cutting the FD interest rate as the RBI started reducing the repo rate at the start of 2025.

How has FD rate been impacted since February 2025?
The RBI has cut the repo rate by 25 bps each time in February and April 2025. Due to two successive rate cuts, banks have aggressively reduced FD interest rates.

Also read | Big savings for home loan borrowers as EMIs to fall significantly after RBI cuts repo rate by 50 bps

According to the SBI Research report, "FD rates have been reduced in the range of 30-70 bps since February 2025."

Along with the reduction in fixed deposit interest rates, banks are also reducing the interest rates on savings bank accounts. "Banks have already reduced interest rates on savings accounts to floor rate of 2.70%," said SBI in its report.

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Also read | FD interest rates are falling: Can corporate bonds offer better returns with safety?

How much FD rate cuts should investors expect in future?
The RBI has cut the repo rate three times till now. According to the SBI research report, "Transmission to deposit rates is expected to be strong in the coming quarters. 100 bps repo rate cuts are expected in FY26."

This is likely to happen if the CPI inflation remains below the medium-term target of 4%, supporting growth in fighting cyclical downturns, and if credit growth remains muted.

What should be FD investors' strategy as interest rates fall?
There are very limited options available to FD investors when the interest rates are falling in the economy. Here are the steps which they should take to minimise the loss and make the maximum advantage of the current situation.

Book FDs at current high rates
The interest rates on fixed deposits are expected to fall in the upcoming months, however, it may take some time before it actually happens. There are many banks which are still offering FDs at attractive rates. Therefore, it is essential for FD investors to book FDs at current higher rates as soon as possible.

Certain banks are still offering interest rates of 8% or higher for longer-term fixed deposits. However, as most of the highest interest rates currently available on FDs are being offered by Small Finance Banks so you should check the safety of your principal amount. If you book your FDs with any bank which is considered risky it will be better to book your FD in such a way that it is covered under Rs 5 lakh deposit insurance cover. Many major banks are currently offering interest rates of 7% or higher for longer-term fixed deposits.

Going for medium to long term FDs can be beneficial
As interest rate cycle has reversed from rising interest rates to falling interest rates, it may take a while for the interest rate cycle to reach its bottom and make a turn around. While short term FDs will see quick reduction in interest rate, it may take a while for interest rate on medium to long term FDs to fall. Therefore, if you do not have any short-term need, a strategy of locking FDs for medium to long term can be beneficial.

Count on laddering to save from lowest yield
Senior citizens can still count on the laddering strategy to manage their fixed deposits (FDs) in terms of liquidity, returns, and interest rate fluctuations in the future.

FD laddering strategy allows senior citizens to break the investible surplus into different tenures. As the FDs are divided into many parts and different FDs mature regularly, it saves the depositors from the eventuality of renewal risk when interest rates are low. Only a part of the FD corpus will get renewed at lower rate while rest of the FDs will still keep enjoying a higher interest rate. With time the interest rate cycle may turn again. As the FD matures, the proceeds can be used to reinvest at the prevailing rates or utilised as needed. Thus, the depositors can expect to keep getting above-average returns from the laddering strategy.

This story originally appeared on: India Times - Author:Faqs of Insurances

Form 16 TDS Certificate: Due to the income tax changes made in the FY 2024-25 (AY 2025-26), Form 16 will show certain changes this year

Faqs of Insurances — Wed, 04 Jun 2025 02:41:00 +0000

By June 15, 2025, salaried employees should receive their Form 16 for the financial year 2024-25 from their employer. This year, Form 16 will undergo certain changes due to the changes announced in the July 2024 Budget.

Your Form 16 will change in the following three ways this year:

1. Taxes deducted from other incomes: Your Form 16 will show the tax deducted from your other sources of income and also the Tax Collected at Source (TCS) on expenditures on specified items. This will happen if you have submitted Form 12BBA to your employer.

Budget 2024 amended the income tax rules to allow salaried individuals to inform their employers of the TDS on the individual's other sources of income, as well as TCS from specified expenses of the individual. This TDS and TCS can then be adjusted against (subtracted from) the total tax deductible from the employee's salary. This would help the employee as total TDS from salary would be reduced accordingly.

Suresh Surana, a practising chartered accountant, says, "This year, Form 16 will show not only tax deducted by the employer on the salary income, but will also show tax deducted on other sources of income such as interest on fixed deposits or tax paid as TCS on foreign travel expenditure, etc. However, this will happen only if a salaried employee has shared the details of other taxes deducted (TDS/TCS) via Form 12BB."

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Also Read: New form to reduce TDS on salary

2. Higher standard deduction from salary under new tax regime: From FY 2024-25 (AY 2025-26), the standard deduction from salary has been increased from Rs 50,000 to Rs 75,000 under the new tax regime.

In Form 16, if you have opted for the new tax regime for FY 2024-25 (AY 2025-26) for TDS on salary, you will receive a higher amount of Standard Deduction from your salary when your employer deducts tax at source. Income tax laws for FY2024-25 allow a Standard Deduction of Rs 75,000 under the new tax regime.

However, while filing ITR for FY 2024-25 (AY 2025-26), if an individual switches from the new tax regime to the old tax regime, then only standard deduction of Rs 50,000 will be allowed to be claimed from the salary income.

Also Read: Last date to receive Form 16 by salaried employees

3. Higher NPS deduction on employer's contribution: From FY 2024-25, the new tax regime allows a higher deduction from gross taxable income to the employee on the employer's contribution to NPS.

An employee can claim a deduction of up to 14% of their basic salary under Section 80CCD (2) in the new tax regime. This deduction can be claimed on the employer's contribution to the National Pension System (NPS) account of the employee. This higher deduction would reflect in your Form 16 only if you are under new tax regime for TDS from salary.

Here also, if the tax regime is switched from the new to the old tax regime while filing ITR, then the deduction will be reduced. An employee will be eligible to claim a deduction of only 10% of their basic salary under Section 80CCD (2) on the employer's contribution to NPS in the old tax regime.

This story originally appeared on: India Times - Author:Faqs of Insurances

Income Tax Return Forms of ITR-1 and ITR-4 are now enabled to file through Online mode with prefilled data for Assessment Year 2025-26 for taxpayers

Faqs of Insurances — Wed, 04 Jun 2025 01:56:00 +0000

The Income Tax Department has started enabling online utility for filing income tax returns online. This means now eligible taxpayers can start filing their ITR through the e-filing online portal for FY 2024-25 (AY 2025-26). However, as of today only ITR-1 and ITR-4 forms are enabled for online filing, which means those who need to file ITR-2 or ITR-3 need to wait for the time being.

Read below to know who is eligible for filing ITR-1 and 4 and who needs to file ITR-2 and ITR-3.

Who needs to file ITR-1?

ITR-1 can be filed by an Indian resident individual whose:

Total income does not exceed Rs 50 lakh during the financial year
Income is from salary, one house property, family pension income, agricultural income (up to Rs 5000), and other sources, which include:
Interest from Savings Accounts
Interest from Deposits (Bank / Post Office / Cooperative Society)
Interest from Income Tax Refund
Interest received on Enhanced Compensation
Any other Interest Income
Family Pension

“Income of Spouse (other than those covered under Portuguese Civil Code) or Minor is clubbed (only if the source of income is within the specified limits as mentioned above),” said the Income Tax Department in its frequently asked question (FAQ ).

What are the types of income that don't form part of ITR 1 form?

Following are the types of income that shall not form part of ITR 1 form:-

(a) Profits and gains from business and professions;

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(b) Capital gains;

(c) Income from more than one house property;

(d) Income under the head other sources which is of following nature:-

(i) winnings from lottery;

(ii) Activity of owning and maintaining race horses;

(iii) Income taxable at special rates under section 115BBDA or section 115BBE;

— IncomeTaxIndia (@IncomeTaxIndia)

Who is eligible to file ITR-2?

According to an income tax department FAQ, ITR-2 can be filed by individuals or HUFs who:

Are not eligible to file ITR-1 (Sahaj)
Do not have income from profit and gains of business or profession and also do not have income from profits and gains of business or profession in the nature of:
interest
salary
bonus
commission or remuneration, by whatever name called, due to, or received by him from a partnership firm
Have the income of another person like spouse, minor child, etc., to be clubbed with their income – if income to be clubbed falls in any of the above categories.

Who is not eligible to file ITR-2?

ITR-2 cannot be filed by any individual or HUF, whose total income for the year includes income from profit and gains from business or profession, and also who has income in the nature of:

Interest
salary
bonus
commission or remuneration, by whatever name called, due to, or received by him from a partnership firm.

Who is eligible to file ITR-3?

The ITR-3 form is mainly used by those individuals who are engaged in a business or any profession and in some cases are required to maintain a books of accounts. Those who do not have income from business or profession are not eligible to file under ITR-3.

Who is eligible to file ITR-4 for AY 2024-25?

ITR-4 can be filed by a Resident Individual / HUF / Firm (other than LLP) who has:

Income not exceeding Rs 50 Lakh during the FY
Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or 44AE
Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-)
Other Sources which include (excluding winning from Lottery and Income from Race Horses):
- Interest from Savings Account
- Interest from Deposit (Bank / Post Office / Cooperative Society)
- Interest from Income Tax Refund
- Family Pension
- Interest received on enhanced compensation
- Any other Interest Income (e.g., Interest Income from Unsecured Loan)

Who is not eligible to file ITR-4 for AY 2024-25?
ITR-4 cannot be filed by an individual / HUF / Firm (Other than LLP) who:

is a Resident but Not Ordinarily Resident (RNOR), or Non-Resident Indian
has total income exceeding ₹ 50 Lakh
has agricultural income in excess of ₹5,000/-
is a Director in a Company
has income from more than one House Property;
has income of the following nature:winnings from lottery;
activity of owning and maintaining race horses;
income taxable at special rates u/s115BBDA or Section 115BBE;
has held any unlisted equity shares at any time during the previous year
has deferred income tax on ESOP received from employer being an eligible start-up
is not covered under the eligibility conditions for ITR-4

This story originally appeared on: India Times - Author:Faqs of Insurances

Today, the bond market in India surged to $2.6 trillion, of which $1.3 trillion, or 45%, is made up of corporate bonds

Faqs of Insurances — Wed, 04 Jun 2025 01:00:00 +0000

As a tool of personal investment, corporate bonds have become the difference between reactive investing and proactive wealth building. Serving both the purposes of income generation and portfolio diversification, corporate bonds offer higher return than FDs however at a relatively higher risk.

Capital allocation skewed after the 2010s equity boom, where bonds assumed a central role. Today, the bond market in India surged to $2.6 trillion, of which $1.3 trillion, or 45%, is made up of corporate bonds. Corporate bonds have been benefitting from the headwinds of companies allocating a higher debt component than equity, foreign investors betting on Indian debt, and retail investors finally having a seat at the table.

With the RBI cutting the repo rate to 6%, its second consecutive repo rate cut in 2025 from the earlier 6.25% in February 2025, borrowing has become cheaper than issuing equity, allowing companies to raise capital without diluting ownership. Simultaneously, global investors are pouring money into Indian bonds, drawn by yields of 7-8%, far outpacing developed markets. India's inclusion in JPMorgan Government Bond Index-Emerging Markets (GBI-EM) is set to attract $20-25 billion in foreign capital by 2025. Additionally, retail investors, too, are benefiting from SEBI's reforms, lowering corporate bond entry barriers to INR 10,000.

These currents have propelled corporate bonds to become an important part of a diversified portfolio of investors who have the required risk appetite. With easy online access and tax-efficient options, corporate bonds enable -

Beating Inflation

Inflation is parasitic to your investment portfolio as well as purchasing power. While inflation has moderated in recent quarters, India's structured realities of a large populus, constrained capital base, and reliance on imported commodities mean that inflationary pressures are likely to persist. This is where investors can rely on the right kind of corporate bonds to beat inflation, maintain real returns and protect their portfolios.

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Achieving FIRE Status

Achieving FIRE (Financial Independence, Retire Early) requires a balance between growth, income stability, and risk management. Corporate bonds, with their varying risk levels, offer a structured way to generate passive income, preserve capital, and hedge against market downturns.

Low-risk bonds from stable companies provide fixed income with minimal market fluctuation. Mid-range bonds offer higher returns with moderately higher risk, creating a middle ground between conservative and aggressive investing. High-yield bonds can boost returns however come at very high risk, they should be limited to 10-15% of an investment portfolio to manage risk.

The key is to diversify with different ratings, to coat your portfolio from macroeconomic swings, while generating steady income. Inflation-protected bonds add an extra layer of security by maintaining purchasing power over time. This approach isn't about getting rich quickly but building a sustainable financial strategy that supports long-term wealth accumulation and reduces dependency on traditional employment income.

Retirement Planning

Retirement is the time of your life when you have zero active income, but your expenses are far from halting. Around 70% of senior citizens in India are dependent on their families for maintenance. 78% of them do not have pension coverage.

An effective retirement-ready portfolio offers steady income, corpus protection, and inflation-beating returns. For this purpose, Senior secured bonds work well. Senior secured bonds are low-risk debt securities issued by corporations to raise capital while working towards investor protection. These bonds are backed by specific collateral assets such as real estate, cash, or other valuable holdings, reducing default risk.

Their priority ranking over unsecured or subordinated bonds ensures investors receive payments first in case of liquidation of the bond issuing company. These bonds offer fixed interest payments and lower volatility compared to stocks and mutual funds, making them an option for investors who intend to avoid risk related to unsecured debt as they age. A dedicated corpus to corporate bonds acts as stabilisers in your portfolio, offsetting potential losses in the stock market.

Bonds aren't risk-free but they are smarter

Every investor's journey comes with landmines. From interest rate fluctuations that can deflate bond prices, credit risks lurking in lower-rated securities, to the treacherous terrain of liquidity that can trap your capital. These are not warning signs to retreat, but challenges to navigate strategically.

Smart money does not shy away from complexity, it masters it. From risk-averse retirees to ambitious wealth builders, these instruments offer a tailored approach to wealth accumulation. While equity markets swing wildly, bonds are an anchor that ensures steady income, protects purchasing power, and offers a lifeline when market volatility threatens to sink your portfolio's ship.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

This story originally appeared on: India Times - Author:Faqs of Insurances

Canara Bank and Punjab National Bank (PNB) have adjusted their fixed deposit (FD) interest rates for retail term deposits under Rs 3 crore, effective June 1, 2025

Faqs of Insurances — Tue, 03 Jun 2025 02:53:00 +0000

Canara Bank and Punjab National Bank (PNB) have revised their fixed deposit (FD) interest rates on retail term deposits less than Rs 3 crore, effective June 1, 2025. While both banks have cut rates on several key tenures, PNB has also increased rates on select long-term deposits.

Latest Canara Bank FD interest rates

Canara bank offers FD interest rates on callable fixed deposits between 4% and 7% for general customers, and between 4% and 7.50% for senior citizens. The rates are effective from June 1, 2025
For the one-year tenure, Canara Bank has reduced the FD interest rate by 10 basis points (bps), from 6.85% to 6.75%. For FD tenures of 3 years and above but less than 5 years, the rate has been lowered by 25 bps, from 7% to 6.75%.

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Term Deposits (All Maturities)	General Public	Senior Citizen
Term Deposits (All Maturities)	Rate of Interest (% p.a.)	Rate of Interest (% p.a.) #
7 Days to 45 Days	4	4
46 Days to 90 Days	5.25	5.25
91 Days to 179 Days	5.5	5.5
180 Days to 269 Days	6.15	6.65
270 Days to less than 1 Year	6.25	6.75
1 Year Only	6.75	7.25
444 Days	7	7.5
Above 1 Year to less than 2 Years	6.85	7.35
2 Years & above to less than 3 Years	6.9	7.4
3 Years & above to less than 5 Years	6.75	7.25
5 Years & above to 10 Years	6.7	7.2

Latest PNB FD interest rates

Punjab National Bank (PNB) has once again revised its fixed deposit (FD) interest rates for retail deposits less than Rs 3 crore. The new rates are effective from June 1 2025.

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After revision, Punjab National Bank offers fixed deposit interest rates between 3.50% and 6.90% for tenures ranging from 7 days to 10 years for general citizens. The highest interest rate of 6.9% is offered on a tenure of 390 days. Earlier, the highest interest rate of 7% was offered on a tenure of 390 days.

For senior citizens, the bank offers interest rates ranging from 4.00% to 7.40%. For super senior citizens, the rates are slightly higher, ranging from 4.30% to 7.70% after revision.

For FD tenures of more than 1 year to 389 days, Punjab National Bank (PNB) has reduced the FD interest rate by 10 basis points (bps), from 6.80% to 6.70%. On the 390-day tenure, the rate has been revised from 7% to 6.90%. For tenures ranging from 391 days to 505 days, the rate has been lowered from 6.80% to 6.70%, while the 506-day tenure now offers 6.60%, down from 6.70%. For tenures between 507 days and 2 years, the rate has been cut from 6.80% to 6.70%. Additionally, for deposits with tenures of over 2 years up to 3 years, the interest rate has been reduced by 5 bps, from 6.75% to 6.70%.

For the 1204-day tenure, Punjab National Bank (PNB) has increased the FD interest rate by 25 basis points (bps), from 6.15% to 6.40%. For tenures ranging from 1205 days to 5 years, the rate has been raised from 6.25% to 6.50%, also reflecting a 25 bps hike.

Sl. No	Period	Revised Rates For Public w.e.f. 01.06.2025	*Revised Rates for Senior Citizens w.e.f. 01.06.2025	#Revised Rates for Super Senior Citizens w.e.f. 01.06.2025
1	7 to 14 Days	3.5	4	4.3
2	15 to 29 Days	3.5	4	4.3
3	30 to 45 Days	3.5	4	4.3
4	46 to 60 Days	4.5	5	5.3
5	61 to 90 Days	4.5	5	5.3
6	91 to 179 Days	5.5	6	6.3
7	180 to 270 Days	6	6.5	6.8
8	271 Days to 302 Days	6.25	6.75	7.05
9	303 Days	6.15	6.65	6.95
10	304 Days to < 1 Year	6.25	6.75	7.05
11	1 Year	6.7	7.2	7.5
12	> 1 Year to 389 days	6.7	7.2	7.5
13	390 days	6.9	7.4	7.7
14	391 Days-505 Days	6.7	7.2	7.5
15	506 Days**	6.6	7.1	7.4
16	507 Days to 2 year	6.7	7.2	7.5
17	> 2 years to 3 years	6.7	7.2	7.5
18	> 3 years to 1203 days	6.5	7	7.3
19	1204 days**	6.4	6.9	7.2
20	1205 days to 5 years	6.5	7	7.3
21	> 5 years to 1894 days	6	6.8	6.8
22	1895 days**	5.85	6.65	6.65
23	1896 days to 10 years	6	6.8	6.8

This story originally appeared on: India Times - Author:Faqs of Insurances

7 prominent changes in ITR excel utilities for FY 2024-25, which taxpayers including salaried should know

Faqs of Insurances — Mon, 02 Jun 2025 23:41:00 +0000

The income tax department has made several changes in the income tax return (ITR) validation rules for reporting income earned during FY 2024-25 (AY 2025-26). As on date only the excel based ITR filing utilities for ITR-1 and 4 have been released. A brief look at these forms suggests that most of these changes are relevant for salaried persons, or those taxpayers who have any electric car loan, home loan, house rent, etc i.e. those who need to file ITR-1.

All of these changes are in the nature of enhanced declarations. Experts say this has been done to stop the instances of false claims of income tax deductions at the time of ITR filing. Earlier, the tax department used to check the tax deduction’s authenticity manually at the time of processing the ITR. Now this process is automated and brought at the ITR filing level, which means less chances of errors in ITR and possible faster processing of ITR.

What are the changes in ITR validation rules for FY 2024-25 (AY 2025-26)?

Most of the changes in validation rules relate to tax deductions that can be claimed under the old tax regime. Here are seven changes introduced in the ITR filing utility for FY 2024-25 (AY 2025-26):

1. Enhanced Disclosure for House Rent Allowance (HRA): Taxpayers claiming HRA exemption must now provide comprehensive details, including:

Place of Work
Actual HRA Received
Actual Rent Paid
Basic Salary and Dearness Allowance
50% or 40% of Basic Salary, depending on whether the city is metro or non-metro.

Source: ITR-1 excel utility

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2. Section 80C Deduction: Taxpayers now have to disclose the policy number or document identification number to claim Section 80C tax deduction. Do note under Section 80C eligible taxpayers can claim up to Rs 1.5 lakh as tax deduction for investing in various instruments like PPF, tax savings FD, life insurance policies, etc.

Source: ITR-1 excel utility

3. Section 80D: Health Insurance Details Taxpayers claiming deductions under Section 80D for medical/health insurance must now provide:
•Name of the Insurance Company
•Policy or Document Number

Source: ITR-1 excel utility

4. Section 80E: Education Loan Interest For deductions on interest paid on education loans under Section 80E, the following details are now mandatory:

Name of the Lender
Bank Name
Loan Account Number
Date of Loan Sanction
Total Loan Amount
Loan Outstanding as on 31st March
Interest of the loan

5. Section 80EE / 80EEA: Interest on Home Loan Similar disclosures are required for interest deductions under Section 80EE or 80EEA for residential house property:

Name of the Lender
Bank Name
Loan Account Number
Date of Loan Sanction
Total Loan Amount
Loan Outstanding as on 31st March

6. Section 80EEB: Electric Vehicle Loan Interest For interest paid on loans taken for the purchase of electric vehicles under Section 80EEB, taxpayers must provide:
•Name of the Lender
•Bank Name
•Loan Account Number
•Date of Loan Sanction
•Total Loan Amount
•Loan Outstanding as on 31st March

7. Section 80DDB: Treatment of Specified Diseases Taxpayers claiming deductions under Section 80DDB for medical treatment of specified diseases are now required to mention the:
•Name of the Specified Disease

Chartered Accountant Abhishek Soni, co-founder, Tax2Win, says: “The above mentioned new requirements are introduced in the ITR-1 and ITR-4 forms for Assessment Year 2025–26, and they were not part of the old forms in this level of detail.”

Soni explains using an example: “For example, for HRA exemption, previously only the exemption amount was entered manually and for claiming the deductions, only deduction amount was entered. In technical terms, in earlier ITR forms, only aggregate deduction amounts were entered, and supporting documentation was needed only upon scrutiny. Now, the ITR utility is capturing this information upfront, indicating a shift toward pre-validation and increased compliance transparency.”

Experts say the tax deduction system was abused, which is why the tax department may have introduced these changes. Chartered Accountant Ashish Niraj, Partner, A S N & Company, says: " In recent past income tax department has detected many cases where Income Tax Refund was obtained on the basis of false claims or forged documents, hence additional information are being sought now in ITR 1 for cross verification purpose at the time of assessment if required.”

This story originally appeared on: India Times - Author:Faqs of Insurances

Polls project the country will pick a leftwing leader in Tuesday’s presidential vote

Faqs of Insurances — Mon, 02 Jun 2025 00:00:00 +0000

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Private equity dealmaking around the world slowed down in the second quarter of 2025, and South Korea holds elections on Tuesday after months of political instability. Plus, office space construction in the UK has reached a ten-year low, and Wall Street is warning that a little-publicised foreign tax provision in Donald Trump’s budget bill could upend markets.

Mentioned in this podcast:

Trump tariffs cut off recovery in private equity dealmaking

Leftwing ‘brawler’ on verge of South Korea presidency

The ‘quiet’ crisis brewing between the US and South Korea

Foreign tax provision in Trump budget bill spooks Wall Street

UK office construction drops to 10-year low

Today’s FT News Briefing was produced by Sonja Hutson, Ethan Plotkin, Kasia Broussalian, Henry Larson, and Marc Filippino. Additional help from Peter Barber. Topher Forhecz is the FT’s acting co-head of audio. The show’s theme song is by Metaphor Music.

Read a transcript of this episode on FT.com

View our accessibility guide.

This story originally appeared on: Financial Times - Author:Faqs of Insurances

The Reserve Bank of India provides the Liberalised Remittance Scheme

Faqs of Insurances — Sun, 01 Jun 2025 21:00:00 +0000

1. LRS is a facility provided by the Reserve Bank of India (RBI) that allows resident individuals in India to send money abroad.

2. Individuals can remit up to $2,50,000 per financial year (April– March) without special permission from the RBI

3. Only resident individuals, including minors (through a guardian), are eligible. The scheme does not apply to companies, partnerships, or trusts.

4. Funds can be remitted for various purposes, including education and medical expenses abroad, travel, gifting and donations, investments in foreign stocks, bonds, real estate, and deposits.

5. Depending on the purpose, tax collected at source, or TCS, of up to 20% may be applicable on the remitted amount.

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Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

This story originally appeared on: India Times - Author:Faqs of Insurances

Low-duration funds invest in short-term debt instruments

Faqs of Insurances — Sun, 01 Jun 2025 21:00:00 +0000

Low duration funds

Low-duration funds are debt mutual funds that invest in debt and money market instruments with an average maturity of six to 12 months. They are suited to investors seeking relatively stable returns over a short-term horizon of six months to a year, offering a balanced mix of liquidity, returns, and lower sensitivity to interest rate changes.

Where do these invest?

Low-duration funds primarily invest in a mix of short-term instruments, such as certificates of deposit (CDs), commercial papers (CPs), treasury bills, and short-term corporate bonds. The lower average maturity of the underlying securities helps reduce the impact of interest rate fluctuations, making these less volatile comparedd to long-duration debt funds.

Why consider these

These funds are useful during uncertain interest rate environments. Since these invest in short-term instruments, the fund manager can adjust the portfolio more frequently based on changing market conditions. For risk-averse investors who want better returns than traditional savings or fixed deposits without locking in funds for long periods, low-duration funds offer an attractive middle path.

How to invest

Investors can access low-duration funds through mutual fund platforms, banks, or financial advisors. It is advisable to review the fund’s credit quality, expense ratio, historical performance, and experience of the fund management team. While these funds aim to preserve capital, credit risk cannot be completely eliminated. So investing in schemes with high-rated instruments is prudent.

Points to note

• Low-duration funds are best suited to short-term goals or as part of a larger asset allocation strategy.

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• Avoid using these funds for goals that demand complete capital protection in the short term.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava, and Labdhi Mehta.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

This story originally appeared on: India Times - Author:Faqs of Insurances

Taxpayers stand to benefit from a 45-day extension for filing returns due to significant ITR form changes in Budget 2024

Faqs of Insurances — Sun, 01 Jun 2025 21:00:00 +0000

At the very onset of the tax filing season, taxpayers have received a bonus—a 45-day extension for filing returns. The deadline has been shifted from 31 July to 15 September to accommodate the extensive structural changes in ITR forms introduced by the Budget 2024. While the extension may be welcomed by many, you could still end up with errors in your returns due to these changes.

Non-compliance with new changes may not be the only mistake you make. Despite technological improvement in online tax filing, taxpayers end up with several errors. “The pre-filled data from Form 16, 26AS, AIS/TIS, real-time validation and auto-calculations have reduced the chances of errors, but if the data you provide and confirm is not correct, it may lead to mistakes in the return,” says Kuldip Kumar, Partner, Mainstay Tax Advisors.

These mistakes cover a wide gamut, ranging from picking wrong ITR forms, misreporting or not reporting income, not reconciling income and taxes, to making mistakes in HRA claims or while changing jobs. These can result in faulty tax computation, income tax notices, penalties, re-filing of returns and delayed refunds. To help you avoid these, we list some such mistakes.

1.Using wrong ITR forms,not filing returns

Some of the most common mistakes are seemingly simple, yet problematic—picking the wrong ITR form, not verifying the submitted return, not adhering to deadlines, or assuming one doesn’t need to file returns at all.

“Different income sources and taxpayer categories require specific ITR forms and using an incorrect form can lead to rejection or processing delays,” says Umesh Kumar Jethani, Founder, ApkiReturn.

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While picking ITR forms this year, remember that you can use ITR 1 form if you have up to Rs.1.25 lakh in long-term capital gains (LTCG) from shares or equity mutual funds, instead of the more complicated ITR 2 or 3 mandated earlier.

Another common mistake is thinking that you are exempt from filing returns because you have zero tax liability. A full tax rebate under Section 87A is available for individuals with taxable incomes up to Rs.7 lakh in the new tax regime and Rs.5 lakh in the old regime, making income up to Rs.7 lakh (or Rs.5 lakh) tax-free. This doesn’t mean you may not have to file tax returns. If you have incurred certain expenses (over Rs.2 lakh in foreign travel, Rs.1 lakh in power consumption, among others), it is mandatory for you to file returns. Similarly, if you are eligible for a tax/TDS refund or have to carry forward losses, you will not be able to claim it without filing returns.

“Only individuals with total taxable income below the basic exemption limit are not required to file returns. Under the new tax regime, this limit is Rs.3 lakh, and Rs.2.5 lakh in the old regime for those below 60,” says Amit Maheshwari, Tax Partner, AKM Global.

Don’t miss these tax filing deadlines

31 March 2030
Last date for filing updated return for financial year 2024-25.
15 Sep 2025
Last date to file tax return for salaried taxpayers and those not requiring an audit, for financial year 2024-25 (assessment year 2025-26).
If you miss it...
You can file a belated tax return till 31 December 2025, though you will have to pay a penalty and interest. The late filing fee is Rs.1,000 if your income is less than Rs.5 lakh, and Rs.5,000 if the income is more than Rs.5 lakh. The interest will be 1% per month on the unpaid tax from the due date till the return is filed.
31 Oct 2025
For individuals and professionals requiring audit for financial year 2024-25 (assessment year 2025-26).
If you miss it...
You can file a belated tax return till 31 December 2025, though you will be charged the same penalty as that for breaching the 15 September deadline. In addition to this, the assessing officer can levy a penalty of `1.5 lakh or 0.5% of turnover, whichever is lower.
31 Dec 2025
Last date to file revised or belated tax return if you miss the 15 September deadline.
If you miss it...
You can file an updated return till four years from the end of the relevant assessment year. However, you will have to pay an additional tax at the rate of 25%, 50%, 60% and 70% of the tax for the first, second, third and fourth years, respectively, depending on the year in which you file.

“In case of wilful default, even prosecution proceedings may be initiated under Section 276CC. There is a provision of imprisonment of six months to seven years with a fine, where tax evaded is more than Rs.25 lakh, and from three months to two years with a fine, in other cases,” says Kumar.

Where the tax return has been filed after the due date (15 September this year), you can be penalised up to Rs.5,000 under Section 234F (see ‘Don’t miss these tax filing deadlines’). This is besides the 1% per month interest you will be levied for unpaid tax. As far as updated returns are concerned, you can file till four years after the relevant assessment year, as per the change announced in last year’s Budget.

Who needs to file income tax returns?
Find out the conditions under which you are exempted from filing returns and when it’s compulsory to do so.
You’re exempt from filing if..

Your annual income before deductions and exemptions is…
Less than Rs.2.5 lakh in old tax regime.
Less than Rs.3 lakh in old tax regime if you are between 60 and 80.
Less than Rs.5 lakh in old tax regime if you are over 80.
Less than Rs.3 lakh in new tax regime.
You are over 75, with only income being pension and interest from the same bank, and the bank has deducted tax.

Even if you’re exempt,file a return if…

You have a tax refund due.
You have a TDS/ TCS refund due.
You need to apply for a loan, passport or visa.
You want to carry forward losses from business/ profession or under capital gains head in the future.

Even if you’re exempt, it is mandatory to file a return if …

You have a foreign income or hold foreign assets.
You are a company or a firm, regardless of profit or loss.
You have deposited Rs.50 lakh or more in savings account, or Rs.1 crore or more in current account.
You have spent Rs.2 lakh or more on foreign travel.
Your electricity consumption is over Rs.1 lakh.
Your aggregate TDS/ TCS is more than Rs.25,000 (Rs.50,000 for senior citizens).
You have a business turnover of over Rs.60 lakh, or professional turnover of more than Rs.10 lakh.

2.Not incorporating Budget 2024 changes

The most likely mistakes this year could be related to the changes introduced by the Budget 2024. There are not only structural changes in the ITR forms that require compliance by taxpayers (see ‘Comply with these Budget 2024 changes’), but also deductions and capital gain taxation changes that could lead to calculation errors.

“Removal of indexation from long-term capital gain calculation is the biggest change from Budget 2024, for which the cut-off date is 23 July 2024,” says Shubham Agrawal, Senior Taxation Adviser, TaxFile. in. Both the capital gain taxation rates and holding periods have been rationalised (see ‘Capital gain rates…’). While long-term gains from listed shares and equity funds will be taxed at 12.5% without indexation, short-term gains will be taxed at 20%, up from 15% earlier.

Importantly, the capital gains schedule has also been modified to report gains separately for periods before and on or after 23 July 2024. What this means is that taxpayers will now have to bifurcate their gains based on whether the transfer occurred before or after this date.

Among other changes, remember that while using ITR forms 1, 2, 3 and 5, you can only use your Aadhaar number, not the Aadhaar enrolment ID. “Besides, the new tax regime has become the default tax regime, and if you wish to opt for the old tax regime, you will have to explicitly choose it by filing Form 10-IEA before filing your ITR,” says Jethani.

3.Not checking AIS & Form 26AS

Another mistake many people make before filing their tax returns is not checking the Annual Information Statement (AIS) and Form 26AS, which provide a summary of all their transactions and taxes.

“Form 26AS is a tax credit statement that primarily serves as a summary of taxes credited against a taxpayer’s PAN,” says Raj Lakhotia, Managing Partner, LABH & Associates. It includes details such as tax deducted at source (TDS), tax collected at source (TCS), advance tax and self-assessment tax payments, refunds issued by the Income Tax Department, and details of specified high-value transactions like property purchases, mutual fund investments, etc.

The AIS, on the other hand, is more comprehensive and reflects both the reported value and that accepted or modified by the taxpayer, enabling users to verify the information and submit feedback, in case of discrepancies. This information includes interest income from savings accounts, fixed deposits and recurring deposits, dividend income, securities transactions like purchase and sale of shares, mutual funds, rent received, foreign remittances, high-value credit card spends, among others.

To reconcile the data, first compare the information in AIS and Form 26AS with your own financial statements, Form 16, bank statements, and investment proofs. “If there are any mismatches (TDS not reflected, incorrect income figures), contact the deductor (employer, bank) to get it rectified,” says Jethani.

“Reconciliation of both with the ITR helps avoid discrepancies, prevents underreporting or duplicate claims, facilitates faster processing of returns and refunds, and avoids tax notices,” says Maheshwari.

4.Not disclosing all sources of income

Whether you fail to list all your incomes by mistake or intentionally, it can prove very expensive. “Since most filings are based on AIS and TIS, people only refer to these, but there is the risk of missing out incomes on which TDS is not deducted, such as interest on sovereign gold bonds or rent for residential property if it is less than Rs.50,000 a month,” says Agrawal.

“It’s also easy to miss out on interest from savings accounts, fixed and recurring deposits, crypto, or freelance, rental and foreign incomes,” says Sudhir Kaushik, Founder & CEO, TaxSpanner.com.

“Taxpayers frequently overlook categories of income that are accrued but not received, or not actively tracked, such as capital gains from sale or redemption of shares, mutual funds, real estate, or other capital assets, and dividend income, especially when credited without TDS or reinvested,” says Lakhotia.

Another income that is typically not included is the one derived from assets transferred to the spouse without consideration, or income from minor children. “Also, in case of sale of jointly owned property with spouse but funded only by one, people report capital gains proportionately in both the returns, rather than in the return of the spouse who funded it,” says Kumar.

After Budget 2024
Capital gain rates & holding periods have changed

Depending on whether it is underreporting or misreporting of income, it can result in a penalty of 50-200% of the due tax, besides interest liability and even risk of prosecution in extreme cases.

5.Not reporting exempt income

While exempt income is not a part of your total taxable income, it is mandatory to report it under the appropriate section (Schedule EI). “Non-reporting of such income may lead to a defective return, and if the defect is not rectified within the prescribed timeline,the return may be treated as invalid,” says Lakhotia. Agrees Kumar: “With automated processes in place, it is likely to get noticed. This may result in waste of time and energy responding to notices and giving explanations why it was missed.”

Exempt income that needs to be reported includes agricultural income; share of profit from a partnership firm; interest income from Public Provident Fund (PPF); interest income from tax-free bonds; gratuity and leave encashment (up to specified limits under Section 10(10AA)); maturity proceeds of life insurance policies (subject to conditions under Section 10(10D)); exempt portion of house rent allowance (HRA) under Section 10(13A); exempt portion of leave travel allowance/concession (LTA/LTC) under Section 10(5); commuted pension (up to specified limits under Section 10(10A)); Sukanya Samriddhi proceeds and interest earned; interest and maturity proceeds from Employees’ Provident Fund (EPF), subject to specified conditions; and income of a minor child clubbed with the parent (exempt up to specified limit under Section 10(32)).

6.Not adding income from former employer

When people change jobs within a financial year, they are likely to make the following accounting mistakes.

Claiming basic exemption & deduction twice: “Both new and previous employers may independently apply basic exemption limit, standard deduction, and deductions under Chapter VI-A, especially if investment declarations have been submitted twice, resulting in double claiming of tax benefits and lower TDS deducted,” says Lakhotia.

“Where such tax liability, net of TDS/TCS, is more than Rs.10,000, the employee will end up paying interest under Sections 234B and 234C if he doesn’t pay advance tax,” cautions Kumar. “Also, irrespective of the number of employers during the year, the standard deduction is capped at Rs.75,000 in the new regime,” says Agrawal.

Not consolidating Form 16s, incomes: Obtain Form 16 from all employers and consolidate income and tax details as it can lead to incomplete income reporting and inaccuracies in TDS credits. “Ensure all income, including any arrears, bonuses, or final settlement from the previous employer, is included,” says Jethani.

Not reconciling Form 16 & Form 26AS : Failure to check the TDS details in Form 16 and those reflected in Form 26AS may lead to missing mismatches, which can result in delays or tax notices.

Ignoring taxability of gratuity, leave encashment: “The other common mistake is claiming exemption for gratuity or leave encashment exceeding the maximum amount specified in the Act if the employee does not keep track of claims in the previous employments,” says Kumar. Failure to account for these can cause errors in tax liability computation.

7.Mistakes in HRA claims

Last year, the Income Tax Department uncovered rent receipts worth Rs.1 crore by a single employee and bore down on the company employees who had used the same PAN multiple times to claim HRA exemption. Don’t make the mistake of conducting fraud as it can result in hefty penalties, including a fine of up to 200% of the misreported amount.

HRA exemption is available under the old tax regime to salaried employees as part of their salary structure. To claim it, you need to provide documentary proof, including a formal rent agreement, rent receipts and landlord’s PAN (if annual rent exceeds Rs.1 lakh), to the employer, besides actually staying in a rented accommodation.

The usage of fake or incorrect PAN details can be easily detected via PAN verification systems, while any mismatch in the rent paid by you and that received by the landlord is bound to get a tax notice. Another red flag for the tax authorites is a mismatch in the rental address and the one linked to Aadhaar or other official records.

If an employee fails to declare or submit proof to the employer, he can still claim HRA exemption at the time of filing returns under Section 10(13A). “However, tax authorities could audit the return to verify the claim. So, preserve supporting documents, such as rent agreement, rent receipts, bank statements reflecting the payment of rent, and where the rent paid exceeds Rs.50,000 a month, evidence of tax deducted at source by the employee,” says Kumar.

“You cannot claim exemption if you stay in your own house or with parents, unless you pay them rent with a valid formal agreement and genuine bank transactions for rent transfers,” says Kaushik.

If the taxpayer pays rent but doesn’t receive HRA from employer, a separate deduction under Section 80GG is available up to Rs.5,000 a month, but is subject to conditions.

HRA claim mistakes: Red flags for tax authorities

Mistake

You have no formal rent agreement.
You have no proof of bank transactions.
Incorrect PAN of landlord (for over Rs.1 lakh a year rent).
Rental address is not authentic.
Your HRA claim differs from that of employer.

How it’s caught

It may not always be mandatory, but its absence can raise suspicion.
Tax department can check bank statements.
It’s easily caught through PAN verification.
Mismatch with address in Aadhaar card or other official records can catch it.
Employer submits details of HRA exemption in Form 16.

Comply with these Budget 2024 changes
The following alterations need to be incorporated by taxpayers in their returns this year.
Capital gains & IT forms
Taxpayers who have long-term capital gains of up to Rs.1.25 lakh and are not carrying forward capital losses can now file using simpler ITR 1 form, instead of the previously mandated complex ITR 2 or ITR 3 forms. This is after the increase in LTCG exemption limit on listed equity shares and equity-oriented mutual funds from Rs.1 lakh to Rs.1.25 lakh in a financial year.
Capital gain split
From 23 July 2024, the LTCG on listed equity shares and equity-oriented mutual funds will be taxed at 12.5% without indexation, from 10% earlier, while the short-term capital gains (STCG) will be taxed at 20%, from the earlier 15%. Taxpayers will have to bifurcate their gains based on whether the transfer occurred before or after this date.
Buyback as dividend
Buying back of shares on or after 1 October 2024 will be considered as dividend in the hands of shareholders and should be reported as ‘Income from other sources’, instead of capital gains. It will be taxed at applicable slab rate without any deduction of the cost of acquisition.
TDS schedule
This year, you will need to mention the TDS section under which tax was deducted for income in 2024-25 if you are using forms ITR 1, 2, 3, or 5.
Actual Aadhaar
You can file the tax returns this year for forms ITR 1, 2, 3 and 5 using only the actual Aadhaar number, not the Aadhaar enrolment ID.
Updated return timeline
The timeline for filing updated returns (ITR-U) has been extended from 24 months to 48 months.
Asset-liability threshold
The threshold for reporting assets and liabilities in the tax return has been increased from Rs.50 lakh earlier to Rs.1 crore now.
Disability certificate
For disabled individuals, taxpayers could earlier claim deduction under Section 80DD or Section 80U in the old regime by quoting Form 10-IA. Now, they will have to give acknowledgement number of disability certificates as well.

This story originally appeared on: India Times - Author:Faqs of Insurances

Equity investors are increasingly being asked by their brokers to use liquid ETFs for better trading

Faqs of Insurances — Sun, 01 Jun 2025 21:00:00 +0000

Direct equity investors are increasingly embracing liquid exchange-traded funds (ETFs) to optimize their trading activity. Brokers are also encouraging clients to transfer unutilised funds into liquid ETFs. Their pitch is simple: rather than juggling money back and forth between the trading account and bank account, investors can park excess funds in liquid ETFs. So are equity trading and liquid ETFs a match made in heaven?

A marriage of convenience

In equity trading or investing, timing is critical. You need quick access to money to take advantage of any mispricing. But keeping idle surplus in the bank account is a low-yield proposition. This is where liquid ETFs step in.

There are two benefits of using liquid ETFs in trading. One, these can help you manage cash flows seamlessly, without missing a beat. Two, these allow more productive use of your idle money.

When you sell equity shares on an exchange, you may simultaneously purchase an equal amount of units of a liquid ETF via the broker. The liquid ETF units get credited in the demat account on T+1 day—the same day as the payout from proceeds of the share sale. Now, you can continue holding on to the liquid fund units till you are ready to redeploy. Your money will continue fetching returns via the liquid ETF rather than earning savings bank account interest.

When a buying opportunity arises, you can then sell the liquid ETF units. The money will be credited to your trading account with the broker the following day, but you can immediatelyly avail yourself of the limit to buy shares via your demat account. Essentially, liquid ETF units are equivalent to money in your trading account.

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“This seamless experience is possible as liquid ETFs trade in the same segment as equities,” asserts Zerodha Fund House CEO Vishal Jain. In any other vehicle, including a liquid fund, the investor would have to wait for the payout to hit the bank account and transfer it back, which could result in lost opportunities.

HOW IT WORKS
1. When selling shares, simultaneously purchase liquid ETF units of equal amount.
2. Units get credited on T+1 day, along with payout from share sale.
3. Continue holding liquid ETF units until you redeploy.
4. When a buying opportunity arises, sell liquid ETF units.
5. Money gets credited on T+1 day, but you get a limit immediately to buy shares.
6. Additionally, liquid ETFs can be pledged to acquire margin for trading in F&O.

This solution works in favour of brokers as well. At present, every broker is mandated to transfer unutilised client funds back to the latter’s bank account at the end of each month. Liquid ETFs save brokers the hassle of carrying out monthly settlements while avoiding fund outflows and retaining assets in their fold. “It is a matter of convenience for both the investor and the broker. It is why many brokers are not charging for the buying and selling of liquid ETFs,” observes Juzer Gabajiwala, Director, Ventura Securities.

Additionally, you can pledge liquid ETF units held in your demat account to acquire margin for trading in the futures and options (F&O) segment. The margin received from liquid ETF holdings is treated as a cash equivalent by exchanges. “Many traders pledge units of liquid ETFs as collateral and take exposure against it,” says Zerodha’s Jain.

Liquid ETFs and equity trading

Key benefits

No transfer hassles: Does away with transferring idle funds between trading accounts and bank accounts.
Equivalent to cash: Enables seamless transition from equities to cash and vice versa.
Earn more on idle money: Fetch higher returns on unutilised funds than bank savings accounts.

What to watch for

Not akin to liquid funds.
Returns are similar to overnight rates.
These levy higher expense ratios than liquid funds.
No STT and brokerage levied, but exchange and statutory levies will apply.
Low trading volumes in some liquid ETFs.

Liquid, but with a twist

But what are these liquid ETFs anyway? Unlike what the name suggests, liquid ETFs are not the same as liquid funds. Besides the fact that liquid ETFs are traded on exchanges in real-time, whereas liquid funds aren’t, there are other differences.

One, these invest differently. Liquid ETFs primarily invest in overnight securities, i.e., tri-party repos (TREPs), whereas liquid funds park money in instruments with maturity up to 91 days. Liquid funds levy a graded exit load if sold within seven days of purchase. Also, liquid ETFs charge no exit loads, offering liquidity without restrictions.

To be sure, liquid ETFs have been around for many years. Benchmark Mutual Fund’s Liquid BeES (now under Nippon India MF) was the first liquid ETF offering in the country in 2003. A few more came later. However, these funds were constrained by virtue of being income distribution-cum-capital withdrawal (IDCW) plans. Dividends are now taxed in the hands of the investor at his or her slab rate. This made traditional liquid ETFs tax inefficient. Further, in some liquid ETFs, the dividend payout accrued in the form of additional units and not cash payouts. This complicated the tax calculations for investors.

However, last year, Zerodha MF’s offering Nifty 1D Rate Liquid ETF marked the arrival of liquid ETFs with a growth NAV for the first time in India. Unlike the returns of IDCW liquid ETFs, the returns in the growth plans are reflected in their day-to-day NAV movement instead of dividend payouts. Only the gains are taxable when sold by the investor.

“Further, it removes the hassle of dividend accounting and tracking payouts, making it a simpler proposition for investors,” says Jain. Since Zerodha’s liquid ETF, several players have launched similar products. Many of these firms—AngelOne, Groww, Mirae, among others—have both stock broking and mutual fund arms.

What to watch for

Liquid ETFs can power your trades with a seamless experience. These allow you to earn better returns while maintaining liquidity. There is negligible credit risk and interest rate risk in liquid ETFs, making them a safe option to park money.

However, investors in liquid ETFs can expect only money market-like returns. According to Value Research, open-ended liquid funds have yielded 7.28% in the past year. Meanwhile, liquid ETFs have averaged 6.1%, similar to overnight funds’ 6.4%. Yet, this is better than earning a bank savings account interest rate of 3% or even lower. “A liquid ETF is not comparable to a liquid fund. It is akin to an overnight fund. Use it for the convenience it offers in trading, not for returns,” remarks Gabajiwala.

Prominent liquid ETF offerings

Further, liquid ETFs charge relatively higher expense ratios, averaging 31 basis points compared to liquid funds’ 15 basis points. Other exchange and statutory levies also apply, even if liquid ETFs are not subject to securities transaction tax (STT). Also, make sure to pick liquid ETFs supported with high trading volumes, or else liquidity will only turn out to be illusory.

This story originally appeared on: India Times - Author:Faqs of Insurances

While filing income tax returns, it is important to select the correct ITR form

Faqs of Insurances — Sun, 01 Jun 2025 21:00:00 +0000

Choosing the right ITR form is the first and most crucial step, as a wrong form can lead to defective returns, penalties, or refund delays. The Income Tax Department has notified the updated forms for Assessment Year 2025-26. Here’s a quick guide to help you identify the correct form based on your income type and tax situation.

ITR 1 (Sahaj)

For salaried individuals with simple income
YOU CAN USE THIS IF
You are a resident individual (not HUF or NRI/RNOR).
Your total income is less than or equal to Rs.50 lakh.
Your income includes:
Salary or pension.

One house property (no carry-forward loss).
Interest or other sources (excluding lottery/racehorses).
Agricultural income up to Rs.5,000.
Capital gains up to Rs.1.25 lakh from shares/mutual funds (Section 112A, new from FY 2024-25). No carry-forward loss allowed.

You cannot use this if:

You're a director in a company.
Hold ESOP/unlisted shares.
Profit from virtual digital assets (crypto).
Have foreign assets or income.
Own more than one house.
Have business or professional income.
Have capital losses to carry forward.

New for this year

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You can now declare up to Rs.1.25 lakh in LTCG from shares or equity mutual funds in ITR 1 without needing ITR 2 or ITR 3.

ITR 2

For investors, NRIs, and those with capital gains or multiple properties
YOU CAN USE THIS IF
You are an individual or HUF.
Your income includes:

Salary/pension.
Income from multiple house properties.
Capital gains (any amount).
Foreign income or assets.
Agricultural income > Rs.5,000.
You’re an RNOR/NRI.
You’re a director or hold unlisted shares.
You have clubbing of income (spouse’s income).

You cannot use this if:

You have income from business or profession.

New feature:
The Excel utility now supports filing revised returns under Section 139(8A).

ITR 3

For business owners, freelancers, and partners in firms
YOU MUST USE THIS IF
You are an individual or HUF with:

Income from business or profession (proprietorship).
You are a partner in a firm (not an LLP).
Income includes capital gains (any amount or with carry-forward loss).
You hold unlisted equity shares.
Income/loss from futures & options.
You also earn salary, rent, or other income along with business income.

Use this if you cannot file ITR 1, ITR 2, or ITR 4 due to your income mix.
If you’re opting out of the new tax regime, Form 10-IEA confirmation is required

ITR 4 (Sugam)

For small businesses and professionals under presumptive tax
YOU CAN USE THIS IF
You are a resident individual, HUF, or partnership firm (not LLP).
Your total income is less than or equal to Rs.50 lakh.
You earn from:

Presumptives (Section 44AD or 44AE).
Presumptiven (Section 44ADA).
One house property.
Salary/pension.
Other sources (excluding lottery/racehorses).
LTCG under Section 112A: Rs.1.25 lakh (no carry-forward loss).

You cannot use this if:

Income is > Rs.50 lakh.
You have foreign assets or income.
You are an RNOR or NRI.
You’re a company director or hold unlisted equity.
Your business turnover is > Rs.2 crore.
You have capital losses to carry forward.

Freelancer tip
Use ITR 4 only if you’re under presumptive taxation (44ADA). Otherwise, file using ITR 3.

ITR 5

For LLPs, AOPs, co-operative societies, and others
You can use this if you are:

A partnership firm (excluding proprietorships).
An LLP.
Association of Persons (AOP).
Body of Individuals (BOI).
Estate of a deceased or insolvent person.
Business trust or investment fund.
Certain cooperative societies or trusts (not filing ITR 7).

You cannot use this if:

You are an individual, HUF, or company.
You are a trust required to file ITR 7.

Note
If you opt out of the new tax regime, submit Form 10-IEA

Don’t forget...

If you’ve received ESOPs or hold startup shares not listed on stock exchanges, you own unlisted equity even if you haven’t sold it. This disqualifies you from using ITR 1 or ITR 4.
Even if your salary is under Rs.50 lakh, having capital gains above Rs. 1.25 lakh or owning more than one property requires ITR 2. Using ITR 1 here can lead to a defective return notice.
Only ITR 2 or ITR 3 lets you carry forward capital losses to offset future gains. If you use ITR 1/4, these losses lapse, potentially costing you thousands in future tax savings.
If you’ve returned to India recently after living abroad, you may be an RNOR, not a regular resident. You are an RNOR if you were an NRI in nine out of the last 10 years or stayed in India for 729 days or less in the last seven years.
If you’re a freelancer, small business owner, or professional with modest income, you can opt for presumptive taxation to simplify filing. Under this, you declare a fixed percentage of your total receipts as income. There’s no need to maintain detailed books or get audited. Use this only if your turnover is within limits (Rs.2 crore for business, Rs.50 lakh for profession).
If you’re salaried and traded in F&O, you must file ITR 3. F&O income is treated as business income, not capital gains, even if it’s just a side activity.

This story originally appeared on: India Times - Author:Faqs of Insurances

After years in the doldrums, Indias chemicals sector is stirring back to life

Faqs of Insurances — Sun, 01 Jun 2025 21:00:00 +0000

After a lull of about three years, India’s chemicals sector now appears poised for an upgrade. If you are looking for a contrarian investment strategy, then you might want to take a small exposure to this sector. Here’s why.

On a rebound

The sector saw a marginal but noticeable improvement in performance during the January–March 2025 quarter. While much of the gain can be attributed to the low base effect, analysts remain optimistic. Of the 32 companies tracked by Reuters-Refinitiv (with estimates from at least two analysts), 19—or 59.3%—beat net profit expectations for the quarter.

Anuj Jain, Co-founder of Green Portfolio PMS, says the March quarter results signal the beginning of an upcycle in the chemicals industry after a pause of nearly 2–3 years. Though valuations remain high for several large-cap stocks in the sector, many mid- and small-cap companies are still available at attractive valuations.

A bleak past

The chemicals sector has faced persistent headwinds over the past few quarters due to muted demand, weak realisations amid pricing pressures, inventory destocking in the agrochemicals segment, and heightened competition from China. Data compiled from the Reuters-Refinitiv database for 139 chemical companies with a market cap of more than Rs.100 crore shows dismal aggregate revenue growth of just 2% and 3.4% in the June and September quarters of 2024-25, on a year-on-year basis.

Nearly 54% of these companies underperformed the Nifty 500 index over the last year, while 66% lagged the broader market benchmark in 2025 year-to-date.

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Brokers upbeat, but wary

A pick-up in domestic demand for RACs (room air conditioners) and the sheer rise in demand for gas used in refrigeration and air conditioning is expected to bode well for the sector. While a B&K Securities report highlights that the weakening of competition from within the European Union will open up export opportunities for Indian companies, it also cautions against the continued threat of strong competition from China.

On the other hand, a gradual recovery is expected in the agrochemicals segment, supported by the rising demand for newer, innovative products and biological alternatives. A Motilal Oswal report released in March 2025 notes that prices in the global crop protection industry are likely to bottom out in 2025 across all key regions and product segments, paving the way for a more stable growth trajectory ahead.

The B&K Securities report notes that a sustained recovery in demand from the EU27 block is crucial to boosting the export growth potential of the Indian chemicals industry. It adds that with inventory de-stocking now largely complete in European markets, both demand and volumes are expected to drive growth going forward.

Challenges

The US trade tariffs, low-cost dumping by Chinese manufacturers, and weak demand in Europe remain some of the major concerns for the sector. An April 2025 Kotak Securities report expresses hope for a decent recovery over 2024–25 and 2026–27. However, in the event of a prolonged tariff war, it cautions that there could be more substantial downside risk to these expectations. Here are three companies worth considering for a small exposure. These firms have reported double-digit growth in net earnings for the March 2025 quarter and enjoy the highest level of analyst coverage within the sector.

SRF

Q4 revenue and net profit beat estimates by 7.4% and 9.3%.
Strong performance in specialty chemicals, refrigerant gases, and packaging films.
2025-26 revenue guidance at 20% growth.
Elara Capital maintains an ‘accumulate’ rating, expecting gains from recovering demand.

Navin Fluorine

Q4 revenue and EBITDA beat estimates by 2.4% and 7.9%.
CDMO (Contract Development and Manufacturing Organisation) and high-performance products drove growth.
Refrigerant gas demand and better pricing supported performance.
Management targets ~25% EBITDA margin in 2025-26.
Prabhudas Lilladher sees strong long-term growth potential.

UPL

Q4 revenue and EBITDA beat estimates by 3.6% and 9.9%.
Growth is driven by strong volumes, and inventory normalisation.
2025-26 revenue growth guided at 4-8%, led by volumes.
Recovery in key markets and new products to aid growth.
Antique sees balance sheet improving and growth momentum continuing.

This story originally appeared on: India Times - Author:Faqs of Insurances

Income tax notices can be daunting, but understanding them is crucial

Faqs of Insurances — Sat, 31 May 2025 02:17:00 +0000

Filing the income tax return (ITR) isn’t always the end of your tax journey. Even after submission and verification of returns, you may get a notice from the Income Tax Department. While this can seem intimidating, most notices are routine and manageable. Understanding these and responding correctly can help avoid penalties, save time, and maintain peace of mind. If you do get a notice, following these tips can keep you from panicking and inviting further trouble.

DON’T IGNORE: Every notice has a deadline; missing it can result in penalties.
USE FORM 26AS & AIS: These will help you to verify and reconcile your income and TDS data.
BE ACCURATE: Mismatches can lead to additional scrutiny or tax demands.
ACT PROMPTLY: Even minor notices can lead to complications if unaddressed.
SEEK EXPERT HELP: For complex notices, consult a chartered accountant or a tax professional immediately.

Here is a simple guide to common income tax notices and how to deal with them.

Section 143(1)

Intimation after return processing
This is the most frequent notice. It compares your filed return with the department’s records. It is sent if there is a TDS mismatch, calculation errors, incorrect deductions, or in case of delayed filing.

What to do

Log in to the income tax portal and review the notice.
If correct, no action is needed.
If tax is payable, pay within 30 days.
If incorrect, file a rectification with documents.

Section 245

Adjustment against previous dues

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If you’re eligible for a refund, but have pending tax dues from previous years, the department may adjust it.
What to do

Check the notice in your portal under ‘e-Proceedings’.
Agree or disagree with the reasons within 15 days.
No response leads to the automatic adjustment of your refund.

Section 142(1)

Inquiry before assessment
This is a preliminary inquiry when your return isn’t filed or the department needs extra details.
What to do

File your return, if pending.
Submit the requested documents by the given deadline.
Ignoring this can lead to penalties or scrutiny.

Section 139(9)

Defective return
If your return has errors or is missing data, it’s considered defective. The common issues it deals with are missing income details and incorrect deduction entries.
What to do

You have 15 days to correct and re-file.
Log in, access the notice under ‘e-Proceedings’, and respond.
Failing to act may make your return invalid.

Section 133(6)

Request for financial information
This notice seeks clarification on transactions like high-value cash deposits or property purchases.
What to do

Share relevant documents, such as bank statements or agreements.
Submit within the deadline to avoid further scrutiny.

HRA and TDS mismatch notices

These are sent when your house rent allowance (HRA) claim or TDS details don’t align with the department’s records.
What to do

Ensure tenant TDS compliance if rent exceeds Rs. .50,000 a month.
Keep rent receipts and the landlord’s PAN.
If the mismatch is real, file an updated return and retain documents for future reference.

Section 143(2)

Scrutiny notice
This notice means your return has been selected for a detailed check.
What to do

Cooperate by submitting all proofs, including income, deductions, or expense claims.
Attend hearings if called, or respond through the portal.
No response may lead to tax assessments based on estimates.

Section 148

Income escaping assessment
It is issued when the department believes some income was left undisclosed in previous returns.
What to do

File a revised return or give explanation as per the notice.
Justify the source of income and submit relevant proof.
Ignoring this can lead to the reopening of past assessments and penalties.

Section 271AAC(1)

Penalty for unexplained income
If unexplained income, like sudden large deposits, is found during scrutiny, this notice may be issued.
What to do

Provide documentation explaining the source of income.
Penalties of up to 60% apply if the income is found to be unexplained.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

This story originally appeared on: India Times - Author:Faqs of Insurances

Attention fixed deposit investors, today is the final day to secure FD at rates as high as 9.10% per annum

Faqs of Insurances — Fri, 30 May 2025 23:21:00 +0000

For fixed deposit investors, today is the last date to book FD at higher rate of up to 9.10% per annum. This is because Suryoday Small Finance Bank announced a revision in FD interest rates effective from June 1, 2025. The revision in FD rates will impact both general public and senior citizen investors. Notably, the bank is currently offering one of the most attractive FD interest rates in the market — up to 9.10% per annum on five-year FD tenure for senior citizens.

Special FD interest rate up to 7.8%: IDBI Bank revises FD rates across special deposits, check Utsav FD deadline

This highest FD interest rate of 9.10% is applicable for a 5-year deposit tenure and is available only until May 31, 2025. That means investors have just today to take advantage of this high return before the revised, likely lower, rates come into effect.

Why banks are revising FD rates now

In the recent months, banks are on the spree to revise the FD interest rates. This includes both for their regular FDs and special FDs launched. FD interest rates are revised because the Reserve Bank of India (RBI) has cut the repo rate from the start of 2025. In total, RBI has cut repo rate by 50 basis points. The next policy is on June 6, 2025, where RBI can cut repo rate again due to low inflation.

New FD rates from June 1, 2025, for Senior Citizens

For senior citizens, the revised FD rates will be between 4.4% and 8.8% per annum, starting June 1, 2025. The highest FD interest rate of 8.8% is offered on tenure above 30 months to 36 months. The bank has uniformly reduced rates by 10 bps across all tenures, while the 5-year FD tenure sees the sharper cut of 70 bps-down from 9.1% to 8.4%.

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Till May 31, 2025, the bank offers highest FD interest rate 9.10 % on tenure of 5 Years.

New FD rates from June 1, 2025 for general public

From June 1, 2025, Suryoday Small Finance Bank will offer interest rates on FDs ranging from 4% to 8.4% for general citizens on deposits below Rs 3 crore. The high FD rate of 8.4% is offered tenure above 30 months to 36 months. The most notable change is in the 5-year FDs, where the interest rate has been reduced by 60 basis points (bps)-from 8.6% to 8%.

Till May 31, 2025, the bank offers highest FD interest rate 8.6% on tenure of 5 Years.

New rates from June 1, 2025

Period	Interest Rate (Per Annum)	Senior Citizen Rate (Per Annum)
7 Days to 14 Days	4.00%	4.40%
15 Days to 45 Days	4.25%	4.65%
46 Days to 90 Days	4.50%	4.90%
91 Days to 6 Months	5.00%	5.40%
6 Month 1 Day	7.25%	7.65%
Above 6 Month 1 Day to 9 Months	5.50%	5.90%
Above 9 Months to less than 1 Year	6.00%	6.40%
1 Year	7.90%	8.30%
Above 1 Year to 15 Months	8.00%	8.40%
Above 15 Months to 18 Months	8.25%	8.65%
Above 18 Months to 2 Years	8.10%	8.50%
Above 2 Years to 30 Months	8.15%	8.55%
Above 30 Months to 36 Months	8.40%	8.80%
Above 3 Years to less than 5 Years	6.75%	7.15%
5 Years	8.00%	8.40%
Above 5 Years to 10 Years	7.25%	7.65%

FD rates till May 31, 2025

Period	Interest Rate (Per Annum)	Senior Citizen Rate (Per Annum)
7 Days to 14 Days	4.00%	4.50%
15 Days to 45 Days	4.25%	4.75%
46 Days to 90 Days	4.50%	5.00%
91 Days to 6 Months	5.00%	5.50%
6 Month 1 Day	7.25%	7.75%
Above 6 Month 1 Day to 9 Months	5.50%	6.00%
Above 9 Months to less than 1 Year	6.00%	6.50%
1 Year*	7.90%	8.40%
Above 1 Year upto 15 Months	8.00%	8.50%
Above 15 Months to 18 Months	8.25%	8.75%
Above 18 Months to 2 Years	8.10%	8.60%
Above 2 Years to 30 Months	8.15%	8.65%
Above 30 Months to 36 Months	8.40%	8.90%
Above 3 Years to less than 5 Years	6.75%	7.25%
5 Years	8.60%	9.10%
Above 5 Years to 10 Years	7.25%	7.75%

This story originally appeared on: India Times - Author:Faqs of Insurances

IDBI Bank is set to revise interest rates on fixed deposits, Utsav FD scheme, and savings accounts

Faqs of Insurances — Fri, 30 May 2025 07:27:00 +0000

IDBI Bank has announced revision of its interest rates across key deposit products, including regular fixed deposits (FDs), the special Utsav Fixed Deposit scheme, and savings bank accounts. The updated rates have come into effect from May 16, 2025.

IDBI Bank Utsav Fixed Deposit

The special Utsav Callable FD tenures of 444, 555, and 700 days offer high interest rates The rates are:
444 days: 7.10% (general), 7.60% (senior)
555 days: 7.15% (general), 7.65% (senior)
700 days: 7.00% (general), 7.50% (senior)
The above rates are effective till June 30, 2025.

Also read: Highest FD returns: SBI, HDFC, ICICI and Canara Bank, which one gives the maximum interest on Rs 5 lakh deposit

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Special Buckets	General/NRE/NRO	Senior Citizens
444 Days	7.1	7.6
555 Days	7.15	7.65
700 Days	7	7.5

Note that the Utsav FD tenures of 300 days and 375 days have been discontinued from April 16, 2025.
Earlier, the bank was offering 7.25% on 444-day tenure for general citizens, 7.75% for senior citizens. On a tenure of 555 days, the bank offers 7.3% for general citizens and 7.8% for senior citizens.

Kotak Mahindra Bank to levy new 1% fee on high fuel spends from June 1; check if your credit card is affected

Latest IDBI Bank FD rates

IDBI Bank has also revised its term deposit interest rates for deposits less than Rs 3 crore. After revision, the bank offers FD interest rate between 3% and 7% (excluding special deposits) for general citizens. For senior citizens, the bank offers between 3.50% and 7.50% for tenures between 7 days and 10 years. The revised rates are effective from May 16, 2025.

Interest Rate (% p.a.)
Retail Term Deposits (< 3 Cr)
Maturity Slab	General Customers	Sr. Citizen
0-6 Days	NA	NA
07-30 days	3	3.5
31-45 days	3.25	3.75
46- 60 days	4.5	5
61- 90 days	4.75	5.25
91 days to 6 months	5.5	6
6 months 1 day to 270 Days	6	6.5
271 days to < 1 year	6.25	6.75
1 Year to 2 Years	6.8	7.3
(except 444 Days, 555 days & 700 Days)	6.8	7.3
> 2 Years to <3years	7	7.50
3 years to 5 years	6.5	7
>5 years to 10 years	6.25	6.75
>10 years to 20 years$	4.8	5.30
	Tax Saving FD
5 Years	6.5	7

For tax-saving FDs with a 5-year lock-in period, the interest stands at 6.50% for general customers and 7.00% for senior citizens.

IDBI Chiranjeevi-Super Senior Citizen FD

IDBI Chiranjeevi-Super Senior Citizen FD exclusive for resident individuals aged 80 years. Super senior citizens investing in a tenure of 444 days, the interest rate offered is 7.75% per annum. Interest rate for the 555-day deposit can earn a return at 7.80%, while the 700-day deposit offers an interest rate of 7.65% per annum.

Special Buckets	Senior Citizens
444 Days	7.75
555 Days	7.8
700 Days	7.65

Savings account interest rate update:
From May 16, 2025, interest rates on savings bank account balances have been revised. For balances up to Rs 1 lakh, the rate remains 2.70% per annum. Balances above Rs 1 lakh and up to Rs 5 crore will earn 2.75% p.a. Accounts holding between Rs 5 crore and Rs 100 crore will now earn 3.25% p.a.

For balances exceeding Rs 1,000 crore, floating interest rates linked to MIBOR (Mumbai Interbank Offered Rate) will apply starting June 1, 2025. The applicable rates vary as follows:
Rs 1,000–1,500 crore: MIBOR +10 bps
Rs 1,500–2,000 crore: MIBOR +40 bps
Rs 2,000–5,000 crore: MIBOR +70 bps
Over Rs 5,000 crore: MIBOR +55 bps
Note that MIBOR-linked interest will apply to the entire balance above Rs 1 lakh if the end-of-day balance exceeds Rs 1,000 crore.

This story originally appeared on: India Times - Author:Faqs of Insurances

The Income Tax Department has released the Excel utility versions of ITR Forms 1 and 4 for AY 2025-26, enabling taxpayers to prepare for FY 2024-25 filings

Faqs of Insurances — Fri, 30 May 2025 03:15:00 +0000

The Income Tax Department has released the Excel utility versions of Income Tax Return (ITR) Forms 1 and 4 for the Assessment Year 2025–26. These tools are now available for download on the official income tax e-filing portal, allowing eligible taxpayers to start preparation for filing of income tax returns for FY 2024-25 (AY 2025-26).

The Income Tax Department has announced the release of excel utilities via a post on X (formerly Twitter). “Attention taxpayers! The Excel Utility for ITR-1 and ITR-4 for AY 2025-26 has been enabled and is now available for taxpayers,” the Income Tax Department said on X.

— IncomeTaxIndia (@IncomeTaxIndia)

Himank Singhla, Partner at SBHS & Associates, says, “It’s a big relief to see that the Excel Utilities for ITR-1 and ITR-4 for Assessment Year 2025–26 have been released by the Income Tax Department. I have already filed ITR-4 using Excel Utility, and I am happy to share that the process was smooth - there are no major changes in the ITR-4 schema compared to last year, which makes it even easier for regular filers and tax professionals. However, a very important change has been made in the schema for ITR-1. A new validation rule has been introduced in the utility itself: if certain TDS section codes appear in Schedule TDS2 or TDS3—such as 194B, 194BB, 194S, 194LA, 195, 196A, 194Q, 194R and others—the income tax return will now be considered invalid for filing under ITR-1. This means taxpayers having income under special rates or from sources like online games, lotteries, crypto, property transfers, must use ITR-2 or other appropriate forms.This is a very welcome and practical change. In past years, many taxpayers unknowingly filed ITR-1 with such incomes, only to face defective return notices from CPC. By building this validation directly into the utility, the Department has helped prevent incorrect filings at source, saving both time and confusion.”

Also read: When will salaried employees get Form 16 to file income tax return for FY 2024-25 (AY 2025-26)?

Choose right income tax return form for ITR filing FY 2024-25 (AY 2025-26)

Taxpayers are advised to carefully check the eligibility criteria before selecting and filing their income tax return FY 2024-25 (AY 2025-26). Choosing the incorrect form may lead to complications or rejection of the ITR by the Income Tax Department. Tax experts recommend thorough reading of the instructions to avoid errors in ITR filing.

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Who is eligible to file ITR 1 for FY 2024-25 (AY 2025-26)?

For the financial year 2024–25 (assessment year 2025–26), resident individuals (excluding those classified as not ordinarily resident) with a total income of up to Rs 50 lakh — including income from salary, one house property, other sources such as interest, long-term capital gains under Section 112A up to Rs 1.25 lakh, and agricultural income not exceeding Rs 5,000 — are eligible to file ITR-1.

ITR filing last date extended from July 31, 2025, for FY 2024-25 (AY 2025-26): Check the new date here

Who cannot use ITR 1 to file income tax return for FY 2024-25 (AY 2025-26)?

ITR-1 cannot be used taxpayers who are either Director in a company or have invested in unlisted equity shares or in cases where TDS has been deducted u/s 194N or if income-tax is deferred on ESOP or has assets (including financial interest in any entity) located outside India.

Who is eligible to file ITR 4 for FY 2024-25 (AY 2025-26)?

For individuals, Hindu Undivided Families (HUFs) and Firms (other than LLP) being a resident having total income up to Rs 50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE, and having long-term capital gains under section 112A up to Rs 1.25 lakh for FY 2024-25 (AY 2025-26).

How to file ITR Excel utilities forms

These ITR forms are editable forms that can be downloaded from the income tax website. Individuals can download these forms, fill them up and upload them back onto the e-filing income tax website. These forms are available in Excel and JSON (JavaScript Object Notation) format.

Steps to download ITR-1 and ITR-4 for FY 2024-25 (AY 2025-26)

The Excel utility forms for ITR 1 and 4 are editable tools that can be downloaded, filled offline, and uploaded on the income tax e-filing website. Here are some steps you can follow to download forms ITR-1 and ITR-4
Step 1: Visit the Income Tax e-filing portal
Step 2: Download the applicable ITR form (Excel version)
Step 3: Fill in the details as per your income profile
Step 4: Validate the form and generate the XML or JSON file
Step 5: Upload it on the portal to complete the filing process

With the release of these utilities, it’s time for eligible taxpayers to begin gathering their financial documents and start filing their returns well before the due date of September 15, 2025 for FY 2024-25 (AY 2025-26).

This story originally appeared on: India Times - Author:Faqs of Insurances

NRIs face a complex decision when it comes to choosing between investing in India, driven by emotional ties and growth potential, or in their country of residence, offering stability and familiarity

Faqs of Insurances — Thu, 29 May 2025 23:30:00 +0000

Choosing where to invest their riches is a very personal and complicated financial decision for millions of Non-Resident Indians (NRIs). Is it wise to invest in India, a country with which you have a strong emotional bond and which is known for its future growth potential, or where one lives and makes money in foreign markets? This conundrum involves purpose, risk, and long-term planning in addition to geography.

The Emotional Pull of India

If you invest in Indian, there is a cost associated with emotional investing. The Indian rupee has depreciated nearly 4% annually over the last decade against the U.S. dollar. This erosion in currency value can substantially reduce global purchasing power, especially when future financial goals are international. Inflation in India, averaging 4-6% annually, further impacts real returns if investments aren’t structured correctly.

The Practical Appeal of Global Investing

On the other hand, investing in one's country of residence (abroad) offers regulatory ease, tax clarity, and exposure to mature financial markets. Developed economies provide stable investment vehicles such as retirement accounts, global ETFs, and government bonds, which are ideal for long-term, low-risk growth.

Yet many NRIs hesitate due to unfamiliarity or limited access to cross-border advisory services. U.S.-based NRIs, for example, must navigate complex IRS regulations around passive foreign investment companies (PFICs) if they hold Indian mutual funds, often leading to hefty tax liabilities.

It's Not Either-Or—It's About Balance

The key insight is this: the debate shouldn't be India vs. abroad. Instead, NRIs must aim for a globally diversified, tax-efficient portfolio that aligns with their personal and financial goals.

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Principle 1: Begin With Your Goals
Every financial journey must begin with clear, specific goals. Are you saving for retirement in India, your children’s education abroad, or simply building long-term wealth? Your investment geography should mirror the end-use of your funds. Someone retiring in India would benefit from INR-linked assets, while those with dollar-denominated expenses should hedge against rupee depreciation.

Principle 2: Diversify Across Currencies and Assets
Overexposure to INR-based assets can amplify currency risk. A diversified portfolio—including Indian equity and debt, U.S. index funds, REITs, and FCNR deposits—can help mitigate this. Currency hedging tools and global mutual funds can also protect and grow wealth.

Principle 3: Stay Compliant
Regulatory compliance is critical. NRIs must avoid using resident accounts after changing their status. Converting accounts to NRO/NRE/FCNR and understanding FEMA rules are essential. Additionally, using Double Taxation Avoidance Agreements (DTAAs) and filing relevant paperwork like Form 10F and Tax Residency Certificates can help avoid unnecessary tax deductions.

Principle 4: Plan for Liquidity and Succession
Many NRIs overlook the importance of liquidity. Real estate and fixed deposits might seem safe, but they lack flexibility in emergencies. Equally important is estate planning. Without an India-specific Will or nominee declarations, heirs can face prolonged legal battles and delays.

Principle 5: Get the Right Advice
Taking investment advice from friends or unregulated agents is risky. Instead, work with SEBI-registered financial advisors who understand NRI-specific challenges, especially those who can coordinate cross-border tax and investment strategies.

Final Thoughts
India has a lot of room to expand, especially in the infrastructure and equity sectors. International markets offer diversification and stability. NRIs should concentrate on building a portfolio that fits their financial goals, risk tolerance, and regional priorities rather than making a snap decision.

As someone who counsels Indian families living abroad, my advice is straightforward: don't let convenience or feelings influence your investing choices. Let your objectives, regulatory requirements, and worldview inform a plan that genuinely creates and preserves wealth.

Cross-border wealth requires cross-border thinking in the modern world. In your portfolio, India and overseas may coexist; the secret is to know how to balance them properly.

This story originally appeared on: India Times - Author:Faqs of Insurances