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September 5, 2020
Tax Computation – 2 regimes

India’s Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman, on February 1, 2020 tabled the Union Budget for the FY 2020-21 in the Lok Sabha. She announced a new income tax regime in addition to the existing one, to provide relief to individual taxpayers. 

However, this new regime is optional and the taxpayers can choose between the old and the new, basis their suitability. The new regime has foregone certain deductions and exemptions. The tax rates have been reduced, but taxpayers will have to forego exemptions when choosing the new tax regime.

Let us take a look at the tax rates of individuals whose age is less than 60 years under both the regimes:

Income tax slabsTax rate (Old Regime)Tax rate (New Regime)
Up to 2.5 lakhsNilNil
2.5-5 lakhs5%5%
5-7.5 lakhs20%10%
7.5-10 lakhs20%15%
10-12.5 lakhs30%20%
12.5-15 lakhs30%25%
Above 15 lakhs30%30%

From the above table, it is evident that the tax rates are lower in the new regime than the old regime. But, there is a list of exemptions and deductions that has to be conceded by the taxpayers. This list includes but is not limited to the following:

i) Leave Travel Allowance (LTA)

ii) Conveyance

iii) House Rent Allowance (HRA)

iv) Uniform Allowance

v) Helper allowance

vi) Professional tax

vii) Standard deduction

viii) Other special allowances [Section 10(14)]

ix) Interest on housing loan (Section 24) on self occupied property

x) Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2) and 80JJA)

Savings calculation based on income

PARTICULARSOld Tax Regime(Rs.)
Gross Income15,00,000
Less: Deductions- 
      U/S 80C (Investment in PPF)1,50,000
      U/S 80D (Medical Insurance – Self, spouse, children)25,000
      U/S 80TTA (Interest Income from Savings account on a bank)10,000
Taxable Income13,15,000

TAX ON TAXABLE INCOME (OLD TAX SLAB)(Rs.)(Rs.)
At normal rate, on the income of Rs. 13,15,000:  
Up to 2.5 lakhsNil 
2.5-5 lakhs @5%12,500 
5-7.5 lakhs @20%50,000 
7.5-10 lakhs @20%50,000 
10-12.5 lakhs @30%75,000
12.5-13.15 lakhs @30%19,500 
Total 2,07,000
Add: Cess @4% on Rs. 2,07,000 8,280
Tax Liability 2,15,280

From the above illustration, it is evident that taxpayers can reduce their taxable income by investing in tax saving instruments such as Provident Fund, Medical Insurance, etc. that appear as deductions under section 80C to 80U of the Income Tax Act, 1961.

PARTICULARSNew Tax Regime (Rs.)
Gross Income15,00,000
Less: DeductionsNil
Taxable Income15,00,000

TAX ON TAXABLE INCOME (NEW TAX SLAB)(Rs.)(Rs.)
At normal rate, on the income of Rs. 15,00,000:  
Up to 2.5 lakhsNil 
2.5-5 lakhs @5%12,500 
5-7.5 lakhs @10%25,000 
7.5-10 lakhs @15%37,500 
10-12.5 lakhs @20%50,000 
12.5-15 lakhs @25%62,500 
Total 1,87,500
Add: Cess @4% on Rs. 1,87,500 7,500
Tax Liability 1,95,000

From the above illustration, having regard to the income level and the deductions being claimed by the taxpayer, it is possible that taxpayers can save money because of the low tax rates of the new regime, however the same needs to be evaluated on a case-to-case basis.

Tax rates under both the regimes for senior citizens

Tax rates for individuals whose age is 60 years or more but less than 80 years (Senior citizens):

Income tax slabsTax rate (Old Regime)Tax rate (New Regime)
Up to 2.5 lakhsNilNil
2.5-3 lakhsNil5%
3-5 lakhs5%5%
5-7.5 lakhs20%10%
7.5-10 lakhs20%15%
10-12.5 lakhs30%20%
12.5-15 lakhs30%25%
Above 15 lakhs30%30%

Tax rates for individuals whose age is 80 years or more (Super senior citizens):

Income tax slabsTax rate (Old Regime)Tax rate (New Regime)
Up to 2.5 lakhsNilNil
2.5-5 lakhsNil5%
5-7.5 lakhs20%10%
7.5-10 lakhs20%15%
10-12.5 lakhs30%20%
12.5-15 lakhs30%25%
Above 15 lakhs30%30%

The Government has offered two types of regimes for tax computations for individuals– the old and the new system. The taxpayers should scrutinize and study both systems before opting for one. They should take into consideration their salaries, expenditures, savings, etc to select the system that is suitable for them. 

Disclaimer: This blog post is based on the provisions of the Finance Act,2020 as passed by the Parliament. Any subsequent notifications have not been factored into this post.

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September 3, 2020
5 reasons to pay EMIs/Credit Card payments on time

Timely payment of EMIs or credit card bills is an essential aspect of taking charge of your financial life. Very often, people miss their bill payments because of their busy schedules. Making on-time bill payments a priority will lead to many benefits and will keep you out of debt traps.

Here are five reasons to pay your EMIs or credit card payments on time:

  • Good credit standing: Making timely payments of EMIs or credit card bills will ensure that your credit history remains positive. A good credit score makes you creditworthy. Having a high credit score will enable you to avail quick, formal finance to address your needs in the future.
  • Avail loans easily: If you have a high credit score, banks or financial institutions won’t hesitate to sanction your loans. You can even get higher loan amounts with low-interest rates.
  • Save on fines: You may avoid the penalty or late payment fee that banks charge by paying the EMIs or credit card bills on time. This helps avoid increasing your financial burden.
  • Save money: When you pay your EMIs or credit card bills on time, you save more as the interest on the outstanding amount does not increase. Lenders may charge high interest on delayed repayments.
  • Keep the monthly payments low: When you miss your bill payment for a month, you will need to pay it the following month. So, the amount to be paid in the next month will increase. Your next payment will include two installments and also the penalty charge, thereby compounding the owable amount. 

Late payments can affect the financial position of people adversely. Make it a habit to pay all your dues on time. It will not only reduce your stress level but also help you avail of all the benefits mentioned above.

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August 31, 2020
7 TIPS TO SAVE MONEY WHILE MANAGING PERSONAL FINANCES

In today’s world, saving money is of the utmost importance. If you are stressed about how to save money, then you are not the only one in this regard. Financial planning sounds easier than to practice. Even though it may be more exciting to spend money, you should try to practice saving for contingencies, as the future cannot be predicted and is uncertain.

Why is saving money essential?

Saving money can help you to become financially independent, providing you with security in the face of emergencies. Financial planning is necessary to set aside money for the family’s needs, such as the education of children, marriage expenses, healthcare expenses, planning for significant life events, retirement, etc. Saving money is an effective financial practice and a lifestyle choice with several proven benefits.

7 tips to save money

Though there are several ways to save money, you could consider implementing these seven tips:

  • Awareness: Being aware is one of the most critical factors. If you are aware of your finances and spending habits, you will be able to consciously set more money aside.  
  • Prepare a budget: Begin by identifying your fixed and flexible expenses. This will help you evaluate how much of your corpus is depleted by unnecessary expenditure. After this, you can prepare a budget on a weekly or monthly basis by setting expenditure limits. This will help you pay your bills while simultaneously creating a pool of savings. You can make a budget on a weekly or monthly basis (based on your preference) with spending limits clearly defined. This budget may help you in saving extra money and restricting unnecessary expenditures.
  • Curb the spendthrift in you: Many people aren’t always conscious of how lavishly they spend money on unimportant things. Tracking expenses will help you maintain a close vigil on expenses and keep the spendthrift within under control.
  • Create an emergency fund: While facing emergencies, financial support in the form of insurance or loans may not be immediately available or they may not cover the need of the hour. At such times, savings come in handy to address the contingency. Therefore, make sure you set aside a fund for unforeseen expenses.
  • Sell things you no longer use: There are many things we buy, and after some time, do not use any more. These items can be sold to generate funds.
  • Savings calculator: Various types of savings calculators can be found online. These can be used to calculate the amount one can save over a given period of time. Using these calculators could encourage the habit of saving.

It is necessary to save money, as it provides security, financial independence, and reduces stress. Get started on your journey of personal financial planning to achieve peace of mind and money in the bank for when you need it.

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August 31, 2020
WHAT DATES ARE CHANGED FOR ITR FILING THIS YEAR?

The COVID-19 pandemic is an unforeseen shock for the Indian economy. The country is expected to experience a lengthy economic recession with extended lockdowns in several states. Due to the Coronavirus outbreak,  the global economic crisis, and subsequent instability in production and supply chains is also likely to be perpetuated.

How are the people of India affected?

Coronavirus has disrupted the lives of millions of Indians. Incomes have reduced and several people are experiencing a financial crunch, and as a result, it has become challenging for households as well. Many people have lost their jobs; many others are struggling to run their businesses.

Has the Government extended dates for filing ITR?

In the context of COVID-19 and to provide the people with immediate relief, the Government, in a press conference on May 13, 2020, has announced that the Income Tax Return (ITR) filing deadline has been extended to November 30, 2020 for the financial year 2019-20. Earlier, it was decided that the deadline would be 31st July 2020. But, looking at the condition of the economy, the Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman decided to extend the date of the deadline for filing of ITR even further to November 30.

The Government has not only extended the date for ITR filing but has also extended the tax audit from September 30, 2020 to October 31, 2020. The TDS and TCS rates were reduced by 25% to provide more funds to the taxpayers for the period between 14 May to 31 March. Furthermore, in April 2020, they announced that the pending income tax refunds up to INR five lakhs would be released to the taxpayers to benefit them in these times of crisis.

The Government has authorized certain financial measures to increase the liquidity of tax paying individuals in India. Prudent decision-making and personal financial management will be key to ensuring that funds are available to run households for the foreseeable future and in case of contingencies.

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August 28, 2020
HOW TO ENSURE CUSTOMER RELATIONS ARE MAINTAINED DURING COVID-19?

The world is not what it used to be since the Coronavirus outbreak. The virus has distorted the daily lives of millions of people across the globe. Social distancing, travel restrictions, work from home - are becoming the new normal. To gain customers' trust, companies should understand the buyers and their requirements in this unprecedented environment.

Why is maintaining customer relations essential?

Good customer relationships can help a company to grow. As with personal relationships, creating and nurturing customer relationships is essential as well. When organizations develop strong customer relationships, it can lead to loyal customers, positive word of mouth, and higher sales.

What are the customers expecting from you?

For your company’s long-term well-being, you should put the needs of your customers first. Customers will always prioritize their safety and that of their families. They expect businesses to understand their shopping style, keep essentials well-stocked, be treated as a valued customer, and get benefits even in these hard times.

How to maintain customer relations in the pandemic?

  • Maintain hygiene: The safety of the customers should be the priority of any business concern. Therefore, businesses should keep their stores thoroughly sanitized. When a customer goes to the store, there should be provisions for social distancing and contactless operations to reduce the risk of contracting the virus.
  • Communicate with the customers: In the wake of the pandemic, everyone is in distress and fear. In such times, if a company can keep communicating with its customers, they will feel considered and cared for. By maintaining contact with its customers, the company can also stay informed about the customers’ needs and wants through feedback, thereby stocking inventory accordingly.
  • Make them feel special and valued: By storing customer information such as important dates, companies can surprise their customers with gift vouchers, coupons, gift hampers for special occasions such as birthdays and anniversaries. They can even send over medicines for the aged family members of the customers. Such little things can increase customer loyalty.
  • Understand what customers are looking for: Businesses can identify the needs and wants of its customers through research and surveys.
  • Added benefits: In these hard times, companies can give their customers free masks and sanitizers with the items they purchase.

It is important for a company to bear in mind the immediate needs of its customers during the Coronavirus crisis. By maintaining strong customer relationships, companies can ensure sustainability and brand loyalty while running their businesses in these challenging times.

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August 28, 2020
HOW RESTAURANTS CAN RESPOND TO THE CHALLENGES POSED BY COVID-19?

Coronavirus pandemic has impacted millions of people around the world. The virus has also affected lakhs of people in India, leading to several lockdowns to curtail the transmission of the virus.

These lockdowns have severely affected various sectors throughout India, chief among these being the restaurant industry. If the coronavirus pandemic lasts for a long period, people may get habituated with the idea of not dining out, which will inevitably take the industry longer to recover.

In India, the restaurant industry has faced numerous challenges because of the COVID-19 outbreak: the end of group dining at restaurants, protecting the health of both the employees and the customers, following the safety regulations laid down by the Government, working with a limited number of workers, running expenditure without revenues to match, etc.

Restaurants can address these challenges by actioning the following:

  • Focus on takeaways: Group dining has become a thing of the past due to the coronavirus pandemic. In this situation, focusing on building the business via takeaways would be a wise decision. This would promote social distancing and would prevent the virus from spreading while ensuring operations are sustained.
  • Collaboration: Restaurants can collaborate to benefit from each other’s strengths. This would not only reduce cost but also increase the number of customers (combining the customers of both the restaurants). The merged restaurant can prepare their best dishes (for which they are famous) and focus their efforts on selling these (which would also result in zero wastage). Collaboration would also help in merging the workforce and have more people available for extensive cleaning and door-to-door delivery.
  • Social media marketing: With the onset of COVID-19, traditional marketing wouldn’t prove to be fruitful. On the contrary, it will be expensive. Owing to the lockdowns, people are getting time to surf on social media. Thus, social media marketing would catch their attention. Restaurants will also be able to connect directly with their customers to build effective customer relationships.
  • Opt for online food ordering: Since people cannot go to restaurants, the only way for these businesses to operate would be through food delivery. They can list themselves on Swiggy, Zomato or other food delivery aggregators to increase sales. They can even opt for food orders placed directly through phone calls. This would reduce costs and create a revenue stream.
  • Create a social awareness program: The restaurants can create a social awareness program around frontline healthcare workers of COVID-19 by supplying them food. Apart from the element of social service, this can also be marketed or advertised on social media and other digital platforms to create goodwill amongst customers.
  • Follow the norms laid down by WHO on hygiene: There are operational challenges in the wake of the pandemic. To overcome those, restaurants should maintain hygiene by extensively using hand sanitizers. They should bear in mind that food safety should be their priority. The working stations should be wiped down at regular intervals using a bleach solution. The executives and valets should be cautious during food delivery and opt for contactless payments.

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February 17, 2019
What can a School do with a 50 Lakhs Unsecured Loan
In their endeavour to provide quality education and enable all-round development of students through extra-curricular activities, schools in India often need to make some investments. The authorities have to ensure that classrooms are well furnished, there is quality sports kit in the games room, labs have the proper equipment for demonstrations and practical experiments and all essential amenities vital to a respectable educational service are available. To finance such facilities, they may at times seek school loans. How to get loan for school?” is the first question that comes to mind in such a scenario. Thanks to the digital lending solutions offered by FinTech companies today, recognised schools with classes up to VIII/X/XII standard could easily get collateral-free school loans of up to Rs 50 lakhs. For what purposes can a school get such an amount? Let’s look at the common reasons that prompt schools to apply for quick loans:

Construct a school building

With a 50 lakh loan for construction of school building, the borrowing institution can build new classrooms to accommodate more students. The amount can also be used to construct a spacious staffroom or for any other structure that the school campus needs. With regular revenue through their monthly fee from students, running schools can afford to pay back the loan amount in EMIs.

Buy school furniture

The furniture used in classrooms and other areas of the school building can seem expensive to buy at short notice. However, quick funding by a FinTech company offering school loans enables the institution to make the purchase conveniently. Like other funds, the amount approved on loan for buying school furniture is credited into the bank account of the borrower within 2-3 days of the application approval and can then be used to purchase the required furniture items.

Build school laboratories

An amount of up to Rs 50 lakhs is usually adequate as a loan for building school laboratory. Schools that have recently advanced their classrooms to X or XII standard may not have science labs for the practical sessions required by the students of these grades. With an unsecured loan from a FinTech lender, they can finance the construction of such facilities. Institutions can also apply for loans to enlarge or refurbish the labs that they already have.

Facilitate transportation

Parents expect safe transport facilities from a school, especially for their younger children. A van, minibus and larger buses can cost anywhere between Rs 7 lakh and Rs 50 lakh depending on its size, brand and age – new/used. Schools that want to buy their own vehicles or enlarge the existing fleet can use FinTech collateral-free loans available for such purposes.

Buy new teaching devices

A quick school loan is the best resort when the school needs to have better teaching devices installed in its classrooms and labs. These could be computers, whiteboards, overhead projectors and other hardware especially commissioned for education purposes. FinTech companies lend up to Rs 50 lakh for such teaching aids.

Develop the school campus

An unsecured loan of Rs 50 lakhs can be used for any other productive purpose that contributes towards the development of school and helps it become a more valuable education service provider. The institution simply needs to state the objective clearly in the loan application and provide the required documents authenticating its eligibility for the fund. It can also arrange for a flexible repayment structure when a FinTech lender disburses the loan for school development.

Apply for Unsecured school loan

As a trusted FinTech company providing loans to schools, Capital Float has customised credit products to support educational institutions across India. To talk about your school loans requirements, feel free to call on 1860 419 0999.
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February 17, 2019
What Are the Documents Required to Get a Business Loan?
An organisation planning to apply for a business loan must be thoroughly aware of the general application process and the documents that need to be provided to the lender. Security is a top concern for any business today, and no enterprise will want to give copies of their ID and financial papers to questionable entities. Even when they choose to borrow from familiar banks, the hassles of printing and photocopying documents, submitting them to a branch personally or through a reliable employee and then awaiting approval of their SME loan can be tedious. It discourages many MSMEs from approaching traditional financial institutions for funds. “How to get fastest business loan” while also following a secure procedure is a priority for SME and MSME borrowers. Fortunately, the expectation of getting a quick business loan can now be fulfilled by FinTech lenders. These digitally active NBFCs have an abridged and systematic online application process, and funds on approved applications are provided in less than a week. Furthermore, they offer loans without requiring the borrowers to pledge any security. FinTechs do need some documents to sanction any loan. However, businesses only need to submit the soft copies with their digital application. The primary documents required for an unsecured working capital loan or any other SME/MSME loan include: KYC Documents of Business Owner(s) – PAN Card, passport copy or a copy of any other Photo ID that is recognised by the Government of India Income Tax Returns (ITR) – The processed ITR document copies for the last two years Goods and Service Tax (GST) Returns – Processed returns for the past year Bank Statements – For the previous six months For some particular loans taken to finance the operations of schools, medical clinics, restaurants, franchises, logistics companies and e-commerce sites, the FinTech lender may need documents specific to these verticals. As an example, a Pvt Ltd company or LLP that seeks merchant cash finance based on the payments made through cards should also submit its card settlement statements for three months preceding the loan application. On the other hand, sole proprietors (Prop) running their own shops, salons or small restaurants can directly submit their KYC documents, IT returns, bank statements and papers that corroborate the identity of their business. What then, about the security factor here? That indeed is important – a business loan application should only be sent from a secure website that encrypts all information loaded on its servers. FinTech companies with website domain having a lock symbol and https:// prefix are authentic lenders in the credit market. If your business has been successfully running for almost three years, and you have been complying with the tax laws of India, your chances of fulfilling other eligibility requirements for an unsecured business loan by Capital Float are high. Just gather the soft copies of documents relevant to your enterprise, and by spending less than 15 minutes on the digital application, you can send a request for the loan. You will also be notified of the approval on the same day, and the funds reach your bank account in the next 72 hours.

Apply for Unsecured Business loan To know more about our loan granting process, feel free to call at 1860 419 0999.

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February 5, 2019
Improving the Profitability of Private Schools
Intimidated by the long-drawn process of getting a loan approved from conventional sources such as banks and traditional NBFCs, schools in India often discard the idea of borrowing funds for improvements on their campus. They try to make the most of their limited available funds, even if it means some degree of compromise on the quality of upgrades they had planned for the school. Such an approach does not bring any benefits in the long term. In some cases, it may even backfire. For instance, if a school purchases low-quality furniture due to inadequate funds, which causes discomfort to students/staff using it for 6-7 hours every day, it may not only tarnish the school’s reputation but also cause serious health problems for the users. What comes as a relief is that school loans are available on easy terms from FinTech companies that are essentially NBFCs but have a streamlined digital lending model for quick disbursal of funds. From a loan for buying school furniture to any other loan for school development, they can provide funds within a week of application receipt. The application needs to be substantiated by only the soft copies of a few documents verifying the credibility of the school. So what are the benefits of leveraging a quick school loan from such a source? Does it lead to more profitability for the educational institution?

Here’s how the benefits of these loans unfold:

Enable improvements in infrastructure and purchase of new teaching equipment

FinTechs can provide a loan for school construction which helps the borrowing institution to divide students of the same class into different sections. With this, teachers can give more attention to each student, and the quality of teaching improves. The building structure can also be expanded when a school decides to admit more students or has to advance its existing classes to higher grades. Schools can also take a loan for smart class facilities that are sought in every private school today and have become significant for a generation growing in the digital age. Other areas where a school loan can be used include furbishing of labs and computer rooms, purchase of games supplies and investment in vehicles for transportation services.

Invigorate interest in admissions

The most direct impact of bringing improvements in school facilities is a rise in the number of students who want to be a part of the institution. While senior students can understand the benefits of moving to an optimally planned school on their own, the parents of younger children who join an academy from kindergarten will also try to place their children in such a school. Provision of excellent facilities and keeping pace with new techniques that transform the learning environment is a natural incentive for more admissions in a school. The good repute of a school can instantly attract students who move to the city due to their parents’ job transfers and have to find an educational institution in minimum time to avoid loss of studies in an ongoing academic session.

Collection of more fees

More admissions imply higher fee collection, and constant increase in this amount eventually leads to increased profitability for schools. A school loan taken to add new facilities and create better learning experiences has multiple benefits for schools that aim to be the leaders in delivering quality education services. Evidently, the increase in their earnings also helps them to repay the borrowed fund. Whether you need a small loan for school furniture or up to Rs. 50 lakh to finance any development process in your school, Capital Float ensures that you get it most conveniently. Visit
https://www.capitalfloat.com/school-finance to apply for your fund today.