How to get yourself out of debt trap?

How to get yourself out of debt trap?

It's not easy to get yourself out of debt trap. Once the people are trapped in the mud of debt, they go away. Arun Ramamurthy, the founder of credit reform, says, "As soon as a person defaults, the debt trap is tightened and he does not get a cheap loan to pay the debt, and the burden of interest increases. Like the debt becomes a mountain day by day. " Of course it is difficult to break the bars of debt. But, there are some ways that can prove to be helpful in finding this difficult.

The first priority should be to get rid of expensive debt. Such loans include credit card dues, personal loans, etc. Interest is charged at the rate of 40 per cent of the credit card arrears. It is rarely possible to generate such returns from any investment. It is therefore good that such loans be eliminated by selling investment in mutual funds or gold etc. Getting help from a family member is another option.

Says Vineet Jain, co-founder and CEO of LoneStreet, "It is a big problem to hide financial status from family members. Join family and close friends and try to get interest-free loans.

Finish high interest loans with low interest loans

There should also be an option to eliminate costly loans by availing low interest loans. For this, your asset can be used. "The interest rates are high on short-term loans, so long-term loans can be taken on the property, with the top-up of your housing loan, the cost of the loan is over," says Rubyak Technologies MD and CEO, Manav Vijay. can do."

All these steps can help you in a short period. In the long term, the solution is to reduce your expenses. Melvin Joseph, the founder of Finvin Financial Plans, says, "It is important to change the lifestyle in order to be free from debt in the long run, according to your bedroom, it is good to spread legs. It may be difficult, but this needs to be done."

Focus on Increasing Income

The second long-term solution is to focus on income increment. Joseph says, "To get out of debt trap, family income should be increased. Those members who are not earning should try to increase their income with the help of tuition, online jobs etc."

How is your CIBIL score calculated?

How is your CIBIL score calculated?

Whether or not the bank will lend you, this much depends on your CIBIL score. It is thus important to know how this score is calculated. By the way, many types of complex multiplication are done to remove it. But, this is the most necessary loan repayment trend. This means that if you are honest in repaying the loan, the bank will also show interest in giving you the loan.

Let's see here what exactly is the Cibill score and how to calculate it.

What is Cibill score?

Cibill score is a number of 3 digits. A report is based on this. This is called a civil report. It contains all of your credit history information. It is addressed by the details of 'accounts'. It contains a credit card or loan account, the status of their payment and the sequence of the days left to repay them.

The score shows the eligibility of borrowing. This is based on the previous record of paying the loan and the ability to return it to you. The range of this score ranges from 300 to 900. The higher the score, the more likely it is to get a loan. The fact is that 79 percent of loans are given after seeing the Cibil score of more than 750.

How CIBIL scores are calculated?

There are four important things that affect your civil score:

1. Payment History: Filling or defining late EMIs has an adverse impact on your civil score.

2. Credit Mix: Having a merged cumulative and unsecured loan has a positive effect on your credit score.

3. Frequent inquiries: Having too much inquiries about the loan has a negative impact on your score. This indicates that your loan burden may increase in the future.

4. High Credit Utilization: High credit utilization limit indicates the increase in debt over time. It does not have a good effect on the score.

 How can you improve your CIBIL score?

If for some reason your civil score is not good then we are telling here how it can be corrected:

Always pay your outstanding bills on time. Banks do not consider late payments to be good.

-Don't use credits too much. Prevent expenses.

Make a balance between secured loans like home and auto loans and unsecured loans such as personal and credit cards. Too much unsecured loan is not considered good.

- Have a Joint Account Holder, then look at the joint account holder. The negligence of the joint account holder also has a bad effect on your credit score.

Surely, review credit history from time to time. Keep an eye on your civil score. By regularly checking the report, you can correct any mistake by the bank.

If you do not want to get the chance of getting a loan in the future, you will get involved in an effort to improve your civil score from today.

Is dividend available from shares tax-free for investors?

Is dividend available from shares tax-free for investors?

Ss Kamat is 75 years old. In the financial year 2018-19, he earned Rs 6 lakh as dividend from the shares. Deposits get 12,000 rupees. At the same time, he has a long-term capital gains of Rs 3,76,000. He has invested 1.5 lakh rupees in PPF. What will be their tax liability?

Sr. Chartered Accountant Dilip Lakhani says that Kamat will not have to pay Tax on the dividends received from the shares. In case of 'income from other sources', interest will be taxed on deposits.

However, the government has added a new section 80TTB in income tax law. Accordingly, people 60 years of age or older can claim deduction on interest income up to Rs 50,000 from the deposit.

In this way Kamat deserves to claim deduction at Rs 12,000. There will be no tax on them in this case. Long-term capital gains will be included to compute Kamat's total taxable income.

For this investment of 1.5 lakhs made in PPF, Kamat will not be eligible for deduction under Chapter VI-A on this income. They can take advantage of the Basic Exemption Limit of Rs 3 lakhs. In this way tax on long-term capital gains of Rs 76,000 will be made. With total tax due, it can claim a rebate of Rs 5,000 under section 87A.

Short Example of A asked question

Surendra sold a flat jointly purchased in 1991. The sale agreement was signed on March 30, 2019. Its registry happened on April 1, 2019. In March 2019, the buyer has paid around 80 percent of the amount. This amount was paid before signing on cell agreement. The remaining money will be paid this month. His question is:

1. What year will be the long-term capital gains?

2. Since they are preparing to buy one of their properties. Therefore, to get the benefit under section 54, he will deposit the amount from the sale in the Capital Gains Account Scheme. If the gains are made in the financial year 2019-20, they will have time till 31 July, 2020. They plan to deposit the full amount of capital gains in their scheme before June 2019. Is it possible to do this?

3. Is it possible to deposit more than the original capital gains in the Capital Gains scheme?

4. How will the buyer who deducts the TDS will look at the IT returns of Finance 2018-19?

5. Can this TDS claim be made on other tax liability for the stated year?

Lakhani says that the facts given by Surendra have come to understand that the transfer of the Residential Flat was done on March 31, 2019. In their case, the transfer will be considered complete in the financial year 2018-19 (Assessment Year 2019-20). In this way, before the fixed date of filing of returns for assessment year 2019-20, they should deposit the money in the Capital Gains Account Scheme.

Secondly, there is no maximum investment limit in the Capital Gains Account Scheme. So, if he wants, he can deposit more than the original capital gains in the scheme. However, the benefit will be limited to that amount as long-term capital gains. No additional benefit will be available on the remaining amount.

Capital gains will be taxed in the assessment year 2019-20. Surendra will be entitled to claim credit for the TDS that has been purchased by the buyer. On the basis of payment in the financial year 2018-19, the buyer can deduct up to 80 percent TDS. Even then he will be entitled to claim the entire TDS. The reason is that the transfer will be completed in the financial year 2018-19.

Where do I put the LTCG amount to save income tax?

Where do I put the LTCG amount to save income tax?

About three weeks is now left to file an income tax return. In this case many people who earn profits from property broking want to know the tax rules associated with it. They are also struggling to calculate the benefits of indexation at the purchase price of the property. We can understand the tax on how much people earn from the purchase and sale of the property, by a question-answer.

The question is - I am a retired tax payer of 64 years. I bought a flat with wife, joint name, which I now want to sell.

How long will the calculation of long-term capital gains on flat purchased 24 years ago? Also tell about the option of tax saving. Marketing head of PPFAS Mutual Fund and certified financial planner Jayant R. Pai answered this.

Pai said, "Even if you bought flat 24 years ago, long term capital gains (LTCG) will be considered as base year 2001-02." Pai said that if you sell flat in the current financial year, then the price of your purchase will be 2.8 times its price.

You will have to pay tax in the next financial year. For instance, if you bought the flat for Rs 10 lakh, then now it will be priced at Rs 28 lakh according to the inflation rate.

You will have to pay tax at 20.8% on this profit. If the flat is in joint name then both of you will have to pay tax on the profits from its sale according to their shareholding. If you want to save tax on profitability on the sale of property, then you can put up to Rs 50 lakh in the capital gain bond of National Highway Authority of India (NHAI) or Rural Electrification Corporation (REC).

If you want, you can invest this money in the purchase of residential property within two years with this amount of profit. If you are building a new house and want to save tax on this amount of profits, you can invest this amount in it even after completing construction within three years.

What is Long Term Capital Gains (LTCG) tax?

 If you invest in a property or other option to make profits and sell it after three years or more then the profit from this is called Long Term Capital Gains. In simple terms, this is the profit from sustaining the investment for a longer period.

The tax which the government charges on this profit is called LTCG tax. In LTCG you get the benefit of indexing. At different options of investment, however, the time limit for calculating LTCG is different. In case of investing in shares, LTCG is applicable after one year, then it is three years for the property.