Blog Article 2022 (6)

How to Add Biller for SIP Transactions in HDFC Bank?

Step 1: Log in to your account and click on the BillPay & Recharge option

To begin the process of adding a biller for SIP transactions in HDFC Bank, you will first need to log in to your bank account. Once you have successfully logged in, navigate to the top of the screen and click on the BillPay & Recharge tab. This will open a new screen that displays various bill payment options that you can add to your account. To proceed, click on the Continue button at the bottom of the screen.

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Step 2: Click on Register New Biller

After clicking on the Continue button, you will be redirected to a new screen. Here, you need to search for the option "Register New Biller" and click on "Click here to add a button" to proceed.

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Step 3: Select Mutual Funds & BSE Limited

Once you have clicked on "Click here to add a button," a new screen will appear. Here, you need to select the Mutual Funds option from the list of available options. Once you have selected Mutual Funds, a drop-down menu next to it will become enabled, select the Mutual Fund House in which you are investing.

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Step 4: Add the URN & Other Options & Select Continue

After selecting BSE Limited as your biller, you will be taken to a new screen where you need to add your URN. Along with the URN, you will also need to select other options such as AutoPay, Pay Entire Bill Amount, and Payment Mode. Once you have entered all the necessary information, click on the Continue button.

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Step 5: Confirmation Page

After clicking on the Continue button, a new screen will appear displaying all the details that you have entered. Review the details carefully and click on the Confirm button to proceed.

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Step 6: Final Confirmation

After clicking on the Confirm button, you will receive a confirmation message stating that the biller has been added successfully. Congratulations! You have successfully added a biller for SIP transactions in HDFC Bank.

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We hope that this article has been informative. If you have any questions or concerns, please do not hesitate to contact us at iplan@wealthcafe.in. 

Equity / Income Tax / Investments / stock market / Uncategorized - 10/31/2022
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ELSS vs EPF

ELSS or EPF - is the classic debate. In fact, many people end up investing in both asset classes to save TAXES and also to create wealth. We always say that one should look beyond tax planning when investing. You should always look at all the characteristics and uses, risk and return of a particular asset and then make your investment decision. Lets us understand that in detail here: 

What is EPF?

It is a retirement benefits scheme maintained by the Employees’ Provident Fund Organisation (EPFO). Only employees of companies registered under the EPF Act can invest in the EPF. You and your employer contribute to the EPF scheme on a monthly basis in equal proportions of 12% of the basic salary and dearness allowance. Out of the employer’s contribution, 8.33% is directed towards the Employee Pension Scheme. However, you can choose to invest only 1800 of your salary to EPF each month irrespective of 12% of basic being a higher amount. 

What is ELSS?

Equity Linked Saving Scheme or ELSS is a type of mutual fund scheme that primarily invests in the stock market or Equity. As they help you save in tax, they are also known as tax-saving funds. ELSS can invest in companies across all market capitalization and hence, categorising their risk can be a bit tricky. 

RISK &  Return  of EPF & ELSS?

EPF: For the current financial year, the interest rate on the EPF account has been fixed at 8.10%. However, the interest earnings are tax-free and hence, the effective post-tax returns are much higher. For someone in the 30% tax bracket, your post-tax returns are _____–. The Risk in EPF is close to NIL. They come with a sovereign guarantee. We know that EPF will come back to us at the end of retirement with great returns and no taxes.
ELSS: As you are investing in Equity indirectly via ELSS, the returns are not fixed. You can make high returns of 18% - 20% to also make a loss in these investments. On average Equity can give good returns of 12% - 15% when invested over a long term of 10+ years. Risk is high as the underlying in Equity.

What is the Holding Period for EPF & ELSS?

EPF: EPF accounts have a lock-in period of 5 years. However, partial early withdrawal from EPF is permitted for a child’s marriage, higher education and making a down payment for a house, subject to conditions. Basically, you cannot withdraw from EPF at your own whims & fancy. 
ELSS: You have to stay invested for 3 years into an ELSS fund to continue the benefit of tax savings. However, many people believe that after 3 years you have to sell the ELSS. This is not true. You can stay invested for as long as you prefer based on your goals and market movements. There is no upper limit. In fact, if you want you can sell your ELSS before 3 years as well, you just have to bear the penalty and pay the tax you saved by investing in ELSS in the first place.

What are the tax benefits you get if you invest in EPF & ELSS?

EPF: Your contribution is exempt from tax up to 12% contribution. An employee’s contribution is eligible for tax benefit under Section 80 C of the Income-Tax Act, 1961. EPF is under the EEE norm currently indicating that the money invested, interest earned and the money withdrawn after a specified period (5 years) are all exempted from income tax in the hands of the employee.
ELSS: Amount invested in an ELSS fund is available for a tax deduction to the extent of ₹150,000 for the current financial year under section 80C of the Income Tax Act.

How can you choose between the two? 

EPF over ELSS. 

EPF is a great investment option for you if you are a salaried employee. Go for that 12% of your basic going towards EPF, increasing year - on- year with tax deductions and high returns. Until your retirement, EPF can be a great contribution for your financial freedom and is TAX FREE (at least your contribution upto 2.5 lakhs per annum). Whereas ELSS (do give great returns on paper) is very risky as the underlying is Equity and hence, can give higher losses as well. 

The core difference between EPF and ELSS is that while the returns (post taxes) from the assets can be similar, the risk is very different. EPF gives me post taxes 12% returns fixed without any risk. ELSS can give me higher than 12% with very high risk of Equity. 

Wealth Cafe Advice

We always recommend, where cashflow is not an issue, for tax saving purposes, utilise your EPF to the maximum. IF there is any shortfall, then you can opt for ELSS. Also, if your 1.5 lakhs limit for 80C is completely utilised through EPF, then do invest in other Equity Mutual Funds. Do not just invest in ELSS because returns are high. Start your tax planning in advance rather than wait for the last moment. Always remember, Tax Planning is part of your financial planning and it should meet your financial goals - do not have a standalone tax plan.

Investments / Salary - 10/28/2022
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This Diwali - financial importance - deep clean your portfolio

Bursting crackers, playing card games, or decorating the house--a lot of customs are associated with the festival of Diwali. Among these typical Diwali rituals, there is one aspect which we may dread or enjoy, but cannot avoid i.e. Deep cleaning our house. Every single drawer, wall or corner, is washed, cleaned and dried. 

15 days before Diwali, my mother would stop going anywhere and her sole focus would be to clean everything around our house. My sister & I would find every way to avoid it. As we grew older, I have now started looking forward to this deep cleaning experience :D. Let us tell you why and how it affects you and maybe it can also be applied to your finances! 

It helps you to declutter your mind, it just relaxes you the way many 2 therapy sessions would (or not). You just have this dopamine rush of completing some tasks. And also, it's great to be in a house that is dust-free and has more space.

Take stock of everything: It helps you understand what you have and how much. Take a stock of everything you own - clothes, books (I found some great books I got and I haven't read yet, finishing it before the year ends), home decor, candles, and shoes (omg not used them for 2 years now).

Discard all that you don’t need - Simple rule - what you don't use please discard. I am everything but a hoarder and I love my mother for this. If I don't use something, I discard it and then I buy less of things I don't want to use because discarding them is extremely painful. Thus, becoming a smart shopper. I do not decide after shopping, I decide before shopping.

No mindless Diwali/Festive Shopping - Ugh I hate it when people buy things just because it is Diwali. Yes, it was great when you did that only once a year. But now we are shopping literally all the time. We always have Myntra or Amazon tabs open on our phones. Hence just shop what you want or don't shop.

Set budgets - Diwali is all about budgeting guys. Look closely, you will see savings everywhere but Marketing is only showing Spending more. So be careful.

Once your regular expenses and savings are taken care of. Lets understand how you can deep clean your portfolio. 

Ways to Deep Clean your Portfolio

Let's put everything together: Collect all the data about all your investments, this is the most time-consuming process if you have not been maintaining it properly. However,  if you have maintained your data well it shouldn't take much of your time. You can check Mprofit software to maintain your investment information - it is available for free for up to 50 lakhs portfolio value.

Review your existing investments: Just like your clothes, some of your investments would hold more emotional place than real value in your wardrobe. Therefore, if it does not match your risk profile or your financial needs, it is time to book your profit (or losses) and remove such investments from your portfolio.  Things which have gone bad have to go. Investments which are not a good option anymore have to go. Learn to identify the weeds of your portfolio.

Now check your Asset Allocation - You can evaluate your Asset Allocation by knowing your Risk Profile - a basic analysis to understand your risk appetite. Once you calculate your Risk Profile and have identified the investment you do not need - Check how much you have in debt, equity , gold and other asset classes.  It’s time to evaluate your portfolio! 

Rebalance or reallocate your Investments: Rebalancing, primarily means, buying and selling different asset classes to build your ideal portfolio mix in order to meet your risk tolerance and financial goals (basically your asset allocation). Once you know your ideal asset allocation start rebalancing your portfolio in order to achieve it. 

Declutter your Investments - When we are talking about decluttering, remember that one of the first things to do is to stop hoarding on mutual funds, buying every other mutual fund is going to make your portfolio messy, and having too many things of one type is only making your diversification worst. So ensure that you have 5 to 6 mutual funds and not more than that and have 1 fund in each category. Time to declutter your mind, wardrobe, and portfolio.

Read the following article to understand this in more detail - When to exit from a Mutual Fund or a SIP

So remember, let it be cleaning your house or your portfolio, both ways you would be welcoming more Laxmi in your life 🙂

Insurance / Investments / Mutual Funds - 10/21/2022
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9 Bad Financial Habits to let go of this Dussehra

Dussehra is the festival that symbolises the victory of Good over Evil. I believe that every festival, every story coming from Mythology has a lesson behind it which helps us bring wisdom and goodness in us to conduct our lives in a better way. 

Ravana, who was an extremely wealthy and knowledgeable man, let his demons control his life and mind which lead to the great war and his eventual demise.In the same way, we have our demons that could lead to our destruction if we don’t work on getting rid of them.

One such habit is our life of living in denial about our financial habits. Let's work on some of these habits which are stopping us from enjoying our wealth to the fullest.

1. Having no Savings

“I will start saving only from next month, I can hardly meet my expenses this month”- said every new earner ever. 

No matter your age or how much you earn - If you have a source of income, you should have a portion of it saved. Many say that they do not have enough earnings and hence cannot save. We agree it is difficult to do so but you have worked towards it. Otherwise, No savings will lead to No financial future. To avoid being dependent on anyone for money ever, you must SAVE TODAY.

Watch our YT video to understand how you can start saving even with minimal income.

2. Buying things on debt 

‘This is a zero-cost EMI, I can buy things today. It is easy to pay EMI’s over the next few months’ - said every person who loves to shop.  

Avoid buying things on debt especially when it is a depreciating asset. There are few things like your house. Avoid debt for everyday items and travel. Remember, these small loans today can put you in a huge debt tomorrow. Make sure you pay your credit cards on time and please do not convert it into EMI - Credit cards attract the most interest if not paid on time. Watch our YT video to understand how credit card interest rates are calculated.

3. Having no Insurance

‘I don't need insurance today because nothing will happen to me, I am too young’ - said many overconfident youngsters. 

Things change, responsibilities change and nothing can stop from an accident or dangerous thing happening. The only thing you can do is protect yourself and your loved ones from the damage that it can cause. Like eating healthy is important, buying insurance is important. You can run away from these for only so long. 

Check out our article to learn about 5 Insurances that you must have. We also have a YT video on it - where we discuss the importance of having insurance.

4. Following social media investor tips

‘The reel by ‘Finance with XYZ’ was so much fun and I even learnt about this complicated product, I am going to invest in it right away’ said every newcomer on social media. 

A concept that takes years to master, cannot be understood in 60 seconds. YES, IT CANNOT BE. Yes, you can know about it, you will be introduced to it but you cannot invest your money basis this. 

Investing is PERSONAL not SOCIAL. So please be careful of where you put it and do your research. It's just easier to listen to free advice from random people and invest. Do your reading and learn and if you can’t, subscribe to a course and go to an advisor for better advice.

5. Procrastinating

‘Aaj Nahi yaar, I will start from this weekend pakka’ and that weekend never came!  This is one of the deadliest demons that we need to kill ASAP. Yes, it is difficult to focus on things we do not like, especially when it is difficult. Baby steps will help you to get started. 

Watch this video to get STARTED NOW. Know that Money may not be very important to you, but everything important in your life needs money. 

 

6. Timing the market

‘I will invest when the market corrects !’ ‘Oh market is too expensive, I will start investing only tomorrow when it's cheaper. Said every investor ever who thought they could get the investing right!

There is no right day or time to invest, TODAY is the best day to start investing. 

7. Investing Randomly

‘I got some money today ill invest in Equity, REITS also look good, I saw this video, I'll invest in the, read about the company - should buy some stocks of that’ A very common approach to invest randomly. 

8. Letting ‘Fomo’ take over you when investing

‘Yaar my friend made so much money in this stock, let me also invest in it’ - said every investor fool who bought stocks/funds after it had already gone up. What works for someone else, need not work for you. It is like not 2 people can rock the same dress, 2 people cannot enjoy the same returns. You have to invest in what works for you. Instead of FOMO, start today and invest regularly.

9. Falling for easy high returns

‘The returns from this fund are so good, I should invest in it right away’ - said every investor who broke his short term needs to chase higher returns. 

Remember the rule - High Returns = High Risk.  If you come across content stating assured return or stating unrealistic profit - it is a red flag - KNOW YOUR PRODUCT FIRST and ITS RISK AND THEN INVEST IN IT!

10. Not asking for help.

‘I will invest based on what I know, who will consult someone, it's too expensive anyway’ - said every investor who just lost 15,000 or more in wrong investments. There are experts for everything, you are just being stubborn by trying to do it on your own (without knowing all about it that you should know). Ask for help, as you go to a doctor for health, go to a financial advisor for your wealth.

 

Wealth Cafe Advice: 

The way Lord Ram could not kill Ravana by just killing one or 2 heads, you cannot improve your financial life, by just improving one or 2 habits, you must kill it at the nib of things by putting a process to your finances. Trying to improve one thing over another, will soon put you back in one of the traps mentioned above. All of these habits are very emotional, and conditioning driven and can be cured by putting a process to your Investments. 

Learn about this through our course - Namaste Money, currently priced at 50% off - check the link here  

Debt / Investments / Uncategorized - 10/07/2022
Blog Article 2022 (1)

All about Second Instalment of Advance Tax Payment

Advance tax means income tax that should be paid in advance instead of lump sum payment at year-end. It helps the Govt. to receive a constant flow of tax receipts throughout the year so that the Govt can incur its expenses timely rather than receiving all tax payments at the end of the year. This keeps the government rolling

When and how much should you pay the second instalment of Advance Tax?

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Who is liable to pay Advance Tax?


The eligibility criteria you will have to fulfil in order to pay advance tax are:

  1. Your tax liability should be INR 10,000 and above.
  2. You should be a salaried or a self-employed individual.
  3. Income received via capital gains on shares.
  4. Interest earned on fixed deposits.
  5. Winnings are earned from a lottery.
  6. Rent or income earned from house property.

Exemption in Advance Tax Payments

  1. Senior citizens aged 60 years and above are exempted from paying the advance tax.
  2. Salaried individuals falling under the TDS net are exempted from paying the advance tax.
  3. However, any earnings from sources such as interest, capital gains, rent, and other non-salary income will attract advance tax.
  4. If TDS deducted is more than the tax payable for the year, then one does not have to pay the advance tax.

Payment of Advance Tax:

You can choose to pay advance tax by any of the following modes:

  • Offline Mode: You can pay advance tax using Challan 280 just like any other regular tax payment at bank branches authorized by the Income Tax Department.
  • Online Mode: You can also pay it online through the official website of the Income Tax department.
    In case you fail to pay advance tax, you will be liable to pay 3% of the shortfall - if the advance tax is more than 12% of tax).

However, it is important to note that no interest(penalty) is payable if the advance is tax paid on or before 15th September. Also, if the advance tax is less than 12% of the tax due for the year.

WealthCafe Advice

Advance tax is a good means to check your income, evaluate it and understand if you need to pay any taxes. Where you do come under the provisions of advance tax, best to consult the same professional for advice on the same.

Debt / Uncategorized - 09/09/2022

Money Lessons I Wish I Learned in School

In my entire school life, all I ever learnt about money was to write out a cheque with a deposit slip. No financial concepts were taught to us. Managing money is such an important and basic part of our life, yet we hardly learn about it in school. 

Listing down the concepts I wish I had learnt in school

1. Relation between Income, Expense and Savings.

Do you remember the expression: Income - Expense = Savings? We learnt this in Class 8 - Economics. We were wired since school that the money left after deducting our expenses from our income is our savings. (in fact, that is also the basis of subtraction right). However, this is just a mathematical expression that we cannot use in our daily life while managing money.

Whenever you receive your income, rather than spending, keep your savings aside and spend the remaining. 

REMEMBER: INCOME - SAVINGS = EXPENSES

You can do this by following our Gullacking approach. In this approach, you have 2 bank accounts - One for your income and the other for your investments. Watch our YT video to learn more about it in detail.

2. Plan before you spend

As a child, we usually get what we ask for, therefore we never understood the value of saving. Instant Gratification - a desire to experience pleasure or fulfilment without delay was what gradually built within us. However, we need to understand the importance of working for something before it is too late. So kids, if you wish to go on that trip - start planning and eventually saving for it today! Similarly, if you are someone in your 30’s and planning to have that dream car - start planning for it today, rather than buying it on credit.

3. Borrowing comes with a Fee

Not planning before you spend, mostly leads to borrowing. As a teen, I always thought credit cards to be a way to pay for things when one did not have money. However, how wrong was I? Credit cards are not a means to have extra funds—it is our own money, and it just helps us with an option to pay later. If not paid on time, it can charge us an interest of 3-4% per month, which is 36-48% per annum! This can lead you in a debt trap - So use your credit cards to save smartly and not spend more.

4. You just need 5th std Maths to do Personal Finance 
Many people think managing money is complicated and you have to have advanced knowledge of math. This is such a huge myth. You don’t have to be good at Maths to be good at Personal Finance - all you need to know is the basics - addition, subtraction and percentage. It's incredibly simple, but not that easy - it will need practice. The vision of looking at figures in percentages and not in amounts will help you have a good understanding of your gains and losses. 

5. Learn to make money work for you

Making money work for us - simply means investing our money and watching it generate profit for us. And this is only possible when you give it time. The Power of Compounding is something that one should know about as early as possible - It will help you grow your wealth exponentially. 

6. Always maintain an emergency fund 

A job loss, hospital bills or car repairs are all expensive problems that can happen at a moment’s notice. An emergency fund helps you cover these expenses and avoid stress and debt. It is advisable to have an emergency fund of 6 times your monthly expense. To know more about it - Read Here.

7. Ask for help!

Communicating about financial difficulty is meant to be taboo. Won’t you ask for professional help when you fall sick? Or will you just google it and use a DIY remedy? 

We are SEBI Registered Investment Advisors. You can approach us at iplan@wealthcafe.in in case of any Financial Advice.

Wealth Cafe Advice:

We need to stop complaining about why finance was not taught to us in school and start working on it. We live in a generation where we have easy access to the internet and have a lot of information on how to manage money. However, we need to differentiate and understand which information is right for us. If you wish to learn more about managing your money you can check out our courses. Use code SAVE20 for 20% off. We also have a Free Email Course where we help you get your finances in place by giving you weekly actions that you need to complete in order to get on track.

Education / Making Money / Money tips - 09/02/2022
Blog Article 2022 (1)

Helping your help - Financial Awareness

Don’t we all wish to help the weaker sections of our society? Many times we end up donating some money, clothes or other things but not really making a larger impact in their lives. The best way to bring a change is to educate and make someone aware of ways they can do better. One such way is to help the people around you know more about the options available to them to make their lives financially better.

The government has launched numerous schemes to support us financially but only 1.36 billion population avails and benefits from them. And do you know if your domestic workers and other employees are benefitting from them completely? Let us guide you with this article on the schemes that are available and how you can make people around you make the most of it.

Step 1 - Ensure that their documentation is in place, they have an aadhaar card (which is properly linked to their mobile number and address and have a voter's ID. In some cases, they may not have a PAN card so voter ID becomes handy. Also, check if they have a proper bank account, if not help them open a bank account with a nationalised bank or any good bank.

1. Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is to invest for those who have a girl child and can contribute in it annually upto 1.5 lakhs and can withdraw the money only for her marriage or higher education.  It is earning a fixed interest rate of 7.6% currently and is decided by the GOI year on year. It is a great way to save money for the girl child without anyone being able to withdraw it or close it for their personal gains.

2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

PMJJBY is a life insurance policy that provides a cover of up to INR 2 lakh rupees against a  small premium worth INR 330 per year. You can take this policy for your help and protect their family financially. 

3. Pradhan Mantri Suraksha Bima Yojan (PMSBY)

Where you have factory workers, drivers, or even just other domestic workers, you can cover them from any accident and disabilities from those accidents by ensuring they have opted for Pradhan Mantri Suraksha Bima Yojana offers a renewable one-year accidental death and disability cover of Rs 2 lakh a JUST  Rs 12 premium every year. This scheme is a great way to ensure that there is some financial support in case of any health issue or death from an accident.  

4. Pradhan Mantri Shram Yogi Maan-Dhan(PMSYM)

PMSYM is a pension scheme to provide for their retirement. Most people in the unorganised sector have no ways to plan for their retirement and hence, this scheme should be opted for. They can get a pension of up to INR 3000 and through Atal pension yojana can earn a pension of up to INR 5,000. You can help them cover the investments to be made for these pensions and can work up a way to finance it on their own later. Do help them out with filling the form and understanding in better detail what these schemes are.

 

Wealth Cafe Advice:

You can contribute on behalf of the weaker section around you as the contribution amount is very small - if not - you can still educate them about it and encourage them to enrol in these schemes as this might be of great benefit to them. Also, if you contribute on behalf of them - inform them about how and when they can benefit from the same.

    Get your weekly dose of Money Masala from us.


    Making Money / Money tips - 08/26/2022

    Should I take a travel loan for my travel plans?

    A loan may seem like your ticket to a dream vacation when you lack the cash to cover the hefty price tag upfront. A vacation loan is simply another name for a personal loan you use for travel.

    But looks can be deceiving.

    That vacation loan you use to finance your seven-day trip could leave you shackled to debt for years and affect your ability to obtain credit when you need it.

    Before you take out a travel loan, read the fine print. What appears to be a good deal may not be once you look closer at fees and interest rates.

    Reasons to Say No to a vacation loan

    Discretionary spending isn't a good reason to borrow money

    We'll start with the biggest vacation loan problem: Buying gifts, traveling, and any other vacation expenses you incur are discretionary expenses. When you take out a vacation loan, you're paying interest for things you want, but don't need.

    Even if you have excellent credit and qualify for the best personal loan rates, you'll still go into unnecessary debt. You're putting your future self in a more difficult financial situation so you can have what you want right away instead of saving for it.

    You could go over budget and borrow more

    Let's say you get a vacation loan for an amount you think will cover all your expenses. What if those expenses end up being much more than you bargained for?

    Depending on the situation, you may be able to rein in your spending. If you took out a loan to buy gifts, you could look for more economical options. But what if you borrowed money for a vacation trip and you realize halfway through the trip that it's going to cost more than you thought?

    You could find yourself borrowing more for those unexpected vacation costs, putting you even deeper in debt.

    It makes your holidays more stressful

    The whole point of a vacation loan is to enjoy your holidays, but that's hard to do when you're worrying about how you'll pay back what you borrowed and what your bank account will look like after the fact.

    If you think you'll be able to push these thoughts out of your head while you celebrate, the odds aren't in your favor. Among people in debt, over half think about their debts at least several times per week and over a quarter think about them every day. 

    Loan payments make it difficult to save money

    When you don't have much money saved, building your savings should be your No. 1 goal. You'll be better prepared for emergencies and future expenses that way.

    The more bills you need to pay each month, the harder it is to save. If you get a vacation loan, those loan payments will hold you back from saving money.

    It could become a bad habit

    I've mentioned why borrowing money for discretionary expenses isn't a good idea. Another reason why you should avoid this is that it often turns into a habit. Once you've borrowed money for something you don't need, it gets easier to do it again.

    Here's an example of exactly how this could happen with a vacation loan. You decide to get a 12-month vacation loan this year. Because of your loan payments, you can't save much. By month 11, you need money for the holidays all over again.

    At best, you're back to square one -- it's the vacation season and you're short on cash. That's assuming you took out a 12-month vacation loan. If you got a loan with a longer-term and only made minimum payments, you're in an even worse position.

    Vacation Loan Alternatives

    The risks that come with vacation loans aren’t worth the financial consequences. There are other strategies you can use to put money aside, take that dream vacation, and avoid taking out a personal vacation loan, including:

    • Cutting back on expenses. If you know you want to take a vacation next year, start planning ahead and looking at your expenses. Ask yourself: Is there anything that I am spending money on that I don’t need? If and when you find areas where you can cut back on your spending, set that extra money aside in a savings account to help fund your vacation.
    • Automating your savings. Saving for any type of expense or investment is much easier when you use an automated system - SIP'S. Plan your budget and start your SIP today!
    • Creating a travel budget. Setting extra money aside is one way to set yourself up for success. Creating a travel budget is another. If you don’t know how much your vacation will cost, how will you know how much you need to save? Examine the costs of transportation, accommodation, tourist attractions, and restaurants to give yourself a good idea of how much money you should tuck away.
    • Utilizing credit card rewards. Credit cards are a handy way to earn rewards on the money you already plan on spending. By opening an airline credit card you can earn a bonus worth a free flight or two. Keeping your eyes peeled for cheap flights. There’s a method to the madness when it comes to snagging a solid deal on flights. While it can feel like luck of the draw, if you know where to look, you can score big. Using a resource to find cheap flights, is an easy way to track down a ticket that can lessen the dent in your wallet.

    Wealth Cafe advice:

    The best way to enjoy a vacation is to always plan well in advance. When your finances are built up, it would be the right time to embark on the trip. The idea of buying now and paying later could be an appealing alternative but there is no point to make your holidays costlier than necessary as it leads to financial stress later on. In the end, it is much of a personal choice in determining how much the vacation is worth to you. A few days of joy that lead to a loan hanging around your neck for the next few years may not be the best idea.

    Loans should always be for necessities, assets, and emergencies. If it's for luxury, one may be living beyond their means.

    To learn more about saving and investing enroll in our course: NM 101- Maximise your Savings

    Budget 2021 / Debt / Money tips - 08/19/2022
    Blog Article 2022 (6)

    How can a Queer Couple Manage their finances together?

    Financial discussions between a couple are very important, discussing how much you earn, what you should do with your earnings and how to invest eventually becomes very important as you both would be looking to do things together. 

    Now, this is no different for queer partners as well. Even though legally, one is not allowed to get married, you may be equally committed to each other and combine everything in your life including your finances.

    This blog is to guide you on ways in which you can look at your finances together and put things in place properly from your bank accounts to investments to asset buying.

    1. Combining your cash flows - Joint Bank Account 
    Opening a joint bank account may help you share your income and expenses with each other and look at your lifestyle as one unit. According to the law by the Reserve Bank of India (RBI), there is no restriction on who can open bank accounts. You can go to any bank and open a bank account with each other as joint holders. 

    However, many banks do not permit non-relatives to open joint account holders as they believe that it would lead to more complications when one of them dies and the heir of the person comes to claim the money. The best way to get this done is to have a direct conversation with the banker and request them to help you open a joint bank account. 

    In fact, Axis Bank has become one of the first banks to announce new policies and practices for its customers and employees from the LGBTQ community. We have heard people facing some problems around it but you can definitely connect and know more. 

    2. Managing Cash Flows together

    There is no difference between a heterosexual and a homosexual couple in managing cashflows. You must do it based on whether both of you are earning or one you are earning. The idea is that where both partners are earning, contribute an equal proportion of your income towards expenses and where one of you is earning, you must take care of all the living expenses. 

    You can learn more about how to manage your cash flows from here

    Where you cannot open a joint account together, you can share logins of 1 account with others, and have an add-on credit card to keep your transactions smooth. 

    3. Investing Together - Set your goals

    Do not worry, I am not going to recommend pooling your funds in one common bank account and investing through it. Invest from your individual accounts towards the combined and individual goals. Take the time out this weekend and discuss and note down your goals. This would also give you a chance to speak to each other about your goals, and why and how you can work on them. 

    No transfer of funds into each other's accounts.

    As per the income-tax laws, where one person transfers money to another account (without any service), it is considered as a gift. Gifts to all non-relatives above 50,000 are taxable in the hands of the recipient. We would highly recommend not transferring funds into your partner's account to invest/or otherwise.

    Where your goals could be the same (like buying a house or car together), you must invest for it from your respective accounts in respective funds.

    4. You can buy assets together

    Yes! You can buy a house, a car, and land together. There is no law stopping 2 people from buying things together. So you can go as partners, friends or family and register a house in your name. However, it is preferable that both of you fund such a property so that banks or builders do not raise any concerns on the same.

    Practical concern: Because our society is not yet acceptable, brokers and developers may create an issue when we openly tell them that we are a queer couple. However, if you just go and buy a house as partners and no discussion about your personal relationship is done, it will make your life easier as you would be avoiding unnecessary discussions.

    5. Leaving your asset to your partner - Inheritance

    You must know that both of you want to spend the next good life together and hence are looking to even combine your finances together. The problem is not about getting the asset together but tomorrow, if you decide to go your separate ways then splitting the assets can be difficult.

    Also, if your family is not very accepting of the relationship, they have the first legal rights on your share of the assets than your partner. To explain in detail, even where you and your partner buy a house with a 50% co-ownership, the share of your partner will first vet on their family members than you (because the law does not recognise queer couples/partners as legal heirs). 

    To avoid any such claim by family members of your share of the assets, the best way is to write a will, leaving your share to your partner (if this is something you want to do). Consulting a lawyer and a financial planner to buy an asset seamlessly would be advisable. 

    6. Foolproof method 

    You can start a business entity together like an LLP or a private limited company where both of you are partners and you can buy assets and investments in the name of the business. This will not only ensure that you can easily buy the assets but also ensure that the asset is passed on to the surviving member. However, there is an associated running cost of managing a separate business entity and hence, may not be feasible for everyone.

    Every individual and every family must take care of their personal finances as money plays a very important role in setting dreams and achieving them. The basics of financial planning and how to set goals would remain the same for you as for any other couple and hence if you are open to learning more about it - you can check our course - Honey & Money

    Do share this article with any friend/family who will benefit from this. 

    Investments - 08/12/2022
    Blog Article 2022 (5)

    What is a Revised Return?

    I hope you have already filed your Income Tax Return. Generally, you need to file your Income Tax Return by July 31 of any year unless extended by the government. However, at times in order to meet the deadline, we may forget to disclose some income or may make unintentional mistakes like a mistake in claiming any deduction.

    In such a situation, you can always file a revised return. 

    What is a Revised Return?

    A revised return is a return that is filed u/s 139(5) as a revision for the original return. It is a revision for any omission or mistake made in the filing of that original return. In order to meet the deadline, a person may forget to disclose some income or may make any other mistake like a mistake in claiming any deduction.

    For example: If a Return of Income is filed by the assessee for the Financial Year 2020-21 i.e. Assessment Year 2021-22 and he later discovers some mistake, he can file a Revised Return of Income Tax anytime up to 31st March 2019 or before the completion of the assessment whichever is earlier.

    Return eligible for revision

    • The original return filed u/s 139(1).
    • The belated return filed u/s 139(4) can also be revised now.

    Points to keep in mind while filing a revised return:

    • ITR form can be changed while revising of return.
    • No penalty can be levied by the department for bonafide mistakes (unintentional)
    • If the assessing officer discovers that the error/ omission was intentional/fraudulent return revision of the return is not allowed and a penalty may be levied.
    • Interest under sections 234B and 234C will be recalculated under every revised return.
    • If the taxpayer has revised the return after the survey/search and it was has found that the mistake in the original return was not bonafide then the levy of penalty is justified.

    Time Limit

    Revised Return of Income Tax can be filed by an assessee at any time

    • Before the end of the relevant assessment year; or
    • Before completion of the assessment

    whichever is earlier.

    For example: If an assessee files the return for F.Y. 2020-21 (A.Y. 2021-22) on 8th July 2021. And later on, if he discovers some mistake, then he can file a revised return of Income Tax anytime up to 31 March 2022 or before the completion of the assessment, whichever is earlier.

    Here is how to file a Revised Income Tax Return:

    • Visit the Income Tax website, now login into the Income Tax e-filing portal by entering PAN/ Aadhar/ other user ID.
    • After logging in, you need to select your assessment year and select ITR Form Number.
    • After that after under ‘Filing Type’ select ‘Revised’
    • Now under the ‘General Information tab, choose the ‘return filing section’ as ‘revised return’ under Section 139(5) and the ‘return filing’ type as ‘revised’.
    • Now enter the acknowledgement Number and Date of filing of the original return. (It is compulsory to enter the 15-digit acknowledgement number when filing a revised ITR).
    • Carefully fill in or correct relevant details of the online ITR form and then submit the ITR.
      Finally, e-verify the returns for faster processing and a quicker refund.

    Wealth Cafe Advice: 

    Usually, mistakes/errors take place when you sit to file your ITR during the deadline period. Make sure you are ready with all the documents and be prepared to file it well in advance  - this will also help you to get your refund on time. However, if you still discover a mistake after filing the original return, rectify it yourself by filing a revised return or consult your accountant rather than waiting for the Govt to send a notice.

    Income Tax / Uncategorized - 08/05/2022

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