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Month: February 2017

Bharat QR: All You Need To Know

Post demonetisation, the government has plans to fulfill a revolutionized motto: To create a forward “Digital India“. The government has taken a step further in their encouragement tactics by introducing Unified Payment Interface through the launch of BHIM App. Now the current trend that has been introduced to promote cashless transactions is Bharat QR. The Bharat QR will enable a simpler approach to availing the benefits of cashless transactions, minus the extra processing fee required in case of debit cards and other merchant payments. Let us take a closer look at the details of Bharat QR.

Bharat QR

What are QR Code Based Payments

QR code based payment basically provides a unified gateway for all payment modes. For example, a user wants to pay via credit or debit card. But the one accepting the payment does not have the swiping machine. This is usually a dead end, where cash payment is the immediate option pursued. Now another option can be considered. That is payments via interfaces Freecharge and Paytm. But again both the sender and the receiver need to have similar apps. Now, this is where Bharat QR comes to play. Being the unified gateway it does not need similar apps or a swiping machine. Bharat QR needs a supporting banking app like the BHIM App and you are all set to make the payments.

How Does Bharat QR Work?

Bharat QR is a code that will support all standardized payment means. It includes Visa, MasterCard, Debit Cards and Rupay Cards. Its range and flexibility make it user-friendly thus promoting more people to go for cashless transactions. The interface will help customers make payments even in the absence of swiping machines and similar payment apps. Thus a two-way benefit is seen: a shopkeeper need not invest in a Point of Sale (PoS) swiping machine and the customer does not have to incur the processing fee losses while making payments via debit cards on PoS swiping machines.

 Payments Via Bharat QR

Bharat QR’s interface has been integrated into Pockets App introduced by ICICI Bank and PayZApp introduced by HDFC Bank. More banks will soon be integrated by launching supporting banking apps. For generating the QR code, BHIM app has to be used. Thus before making payments with Bharat QR, make sure you have BHIM App installed in your SmartPhone. The following steps have to be taken thereafter to complete the payment:

  • Scan the QR code via the BHIM App.
  • It will redirect you to the payment portal associated with your bank. There enter the payment details and the amount you have to pay.
  • Add a remark as to where the payment is being made.
  • Enter the 4 digit passcode as generated by the BHIM App.
  • Your payment will be authenticated and the money will be debited from your account and initiated to the receiver’s account.
  • The receiver then needs to take a print out of the generated QR code and add it to the payment desk.
  • Thus the amount debited from the customer will immediately be credited to the receiver’s bank account.

Bharat QR: How Secure Is It?

Bharat QR does not demand your ATM pin or CVV details. You simply have to scan and pay. Thus it is an extremely secure interface to make all merchant payments. Your card details are protected and the payment details remain secure with the sender. Also, the receiver can receive the sum immediately in their bank accounts without going through the hassles of a swiping machine or mobile apps. Scan and Pay. Scan and Receive. That is the simple and secure fundamental of Bharat QR.

Here’s How You Can Transfer Your PPF Account From One Post Office To Another

It is usual for an individual to open a PPF account with the nearest post office branch. But in the era of job hopping and residence hunting, it is difficult to stay constant at a particular place. Thus in such cases, the PPF account needs to be transferred from one post office to another for greater convenience in future. Given below are the elaborate details of how the transfer can be made possible.

PPF Transfer: PO to PO

Primary Documents Required

The operation of transferring PPF from one post office to another involves certain formal documents and ID proofs. They are as follows:

  • The SB 10(b) Form
  • Address Proof
  • Personal ID Proof
  • The updated passbook associated with your PPF account
  • The address of the new post office.

The details of the documents are discussed below

The SB 10(b) Form

The SB 10(b) is the official documentation required to initiate the transfer of PPF account from one post office to another. SB 10(b) form is available online on the official website of India Post. This can also be physically collected from the post office in which you have your PPF account. The following details should be present mandatorily while filling the form:

  • The PPF account number.
  • The details of passbook associated with the PPF account.
  • Address of the present Post Office.
  • Address of the new Post Office.
  • Signature of the primary account holder.
  • Signature of the postmaster.

The form SB 10(b) has been designed in a letter format. Thus the above details have to be addressed to the current Post Office along with the PPF account number. After addressing is done it also requires three specimen signatures. After the account holder fills the primary details, the remaining information has to be filled after checking account balance. These details are to be verified by the postmaster.

Form And Documents Verification

Verification of the SB 10(b) form will be done by the postmaster by referring to the following documents provided by account holder:

  • The original updated passbook associated with the PPF account.
  • Address proof
  • Personal ID proof.

The verification will be done by checking the balance details in the passbook and matching it with the SB 10(b) form. Then further processing follows.

Submission For Processing The Transfer

Both the verification and submission process has to be done at the current or old Post Office. After the verification process is complete the postmaster confirms the transfer to be done with final signatures. The following processes follow:

  • The original updated passbook is returned to the PPF account holder.
  • The old account is set to close.
  • An application along with a demand draft addressed to the primary person concerned in the new Post Office.
  • The demand draft amount is basically the amount of balance in the PPF account.
  • The new Post Office will receive the application and the demand draft.
  • Then the individual has to report to the new Post Office for verification of credentials.

Opening Of PPF Account In The New Post Office

Post the verification of credentials at the new Post Office, a PPF account will be opened for the account holder. The amount in this account will be the transferred balance from the old Post Office. The account holder will them be issued a new passbook. There is an important point that the PPF subscriber must keep in mind after the transfer is successful. It is the verification of the balance details according to the old passbook. If the balance has been incorrectly transferred due to some errors a complaint must be issued.

5 Advantages of Investing In ELSS

Equity Linked Savings Scheme or ELSS is an equity mutual fund which has two-way benefits: excellent returns and tax saving. Thus it is a profit plus savings investment option that have multi-faceted advantages in the present market. Here are 5 advantages of ELSS that makes it a popular option for all investors.

adv of ELSS

Low Initial Investment Value

One of the primary advantages of ELSS is its low initial investment cost of Rs.500 (minimum) per month. Often investments generating high return rates tend to be costly and hence is not an affordable option for the majority. But any individual can invest with a minimal value. Since the concept is to invest in market shares the initial cost is a profitable aspect as you are getting greater returns for lower cost.

Flexible Lock-In Period

ELSS generates the best returns if invested for a longer period of time. But keeping an emergency scenario in mind, the lock-in period has been set at 3 years. This means that funds can be drawn from ELSS after a short tenure of 3 years and the funds withdrawn will be completely exempt from taxes. Thus it can be said that the lock in period is flexible and can be risked by all investors.

Tip: ELSS is not bound by a long lock duration, but is financially advantageous if the investment is for a longer period. This is because the market share rates are volatile and show an unpredictable graph of increase and decrease at times. But if invested for a longer time the average rates are almost always high producing good returns.

ELSS Generates Excellent Returns

ELSS generated returns are based on several market aspects. This includes the growth of stock, the present share value, etc. Thus it produces an overall return value from all sides making it an extremely beneficial investment. Other savings and investment schemes promise a return 8%-9% on the average scale. But when it comes to stocks of good quality produce very high returns, especially in the Indian economy. Thus the average return is 22.9% as calculated on the basis of last 3 years.

Can Be Linked To Other Trending Investments Like SIP

With the initial cost as low as a minimum of  500 INR per month, periodic investment is made easier for individuals. Thus continuous profits are gained on continuous investment. This concept can be made more beneficial by linking a SIP with the ELSS Scheme. Thus along with the funds saved in ELSS, a return amount will be generated monthly after the lock-in period of 3 years. The return amount generated will be due to the SIP investment linked. Moreover, as ELSS is exempt from taxes, the returns you gain on SIP is not taxable. Thus you can save and earn simultaneously.

Tax Benefits Of ELSS

ELSS is a tax saving scheme that falls under the Section 80C of the Income Tax Act. This means that it is an investment plus savings scheme of mutual funds that qualifies for tax deductions. According to Section 80C, the tax deductions are up to 1.5 Lakhs INR. Also, the returns earned (after the lock-in period of 3 years) is completely exempt from taxes. Thus ELSS ensures returns with tax exemption.

Also Read: 5 Mistakes to Avoid while investing in ELSS

Is ELSS for Senior citizens?

ELSS For Senior Citizens- YES or NO?

ELSS is an investment that is not exactly centered around senior citizens. This is the reason why there is a misconception regarding its benefits for senior citizens. Another notion related to this is that ELSS returns depend on market trends. Thus it is not suitable for senior citizens to invest in it as it involves taking a lot of risks. The truth, in fact, differs. ELSS is beneficial for senior citizens in many ways only if a judicious investment is done. Let us consider the possibility that ELSS holds for a senior citizen.

ELSS for senior citizens?

The Age Factor

The age factor usually deters senior citizens from investing in an ELSS scheme. This should not be the case. Practically thinking, ELSS is more beneficial with a short lock-in period of 3 years. This means that funds can be withdrawn within a short tenure in a case of an emergency. Also after the lock-in period, the withdrawn amount is not taxable. Another aspect of ELSS is its long-term benefits. It is safe to say that on an average, senior citizens who have just attained the age of 60 have 12-15 years of time to devote to investments. In such cases, ELSS generates the best returns as it has been seen that on a long term basis ELSS reaps highly profitable gains. Thus both tax savings and high profits requirements are met, which is essential for senior citizens.

Judicious Investment in ELSS is Completely Risk-Free

It is obvious that a risk factor is involved with ELSS as the scheme depends largely on unpredictable market trends. Though in the long run, it is almost always advantageous, senior citizens might have to think twice before taking the risk. But let us consider the positive side here: ELSS generates excellent returns with tax benefits. So why not avail these benefits in parallel to taking a safe route? Thus judicious investment must be made in ELSS. Instead of complete exposure to ELSS, part of investment must be made in it. With an initial investment cost of 500 INR per month (minimum), it is an affordable option. This would ensure three things:

  • Tax savings of up to 1.5 Lakhs INR through different schemes along with ELSS.
  • Security provided by the investments other than ELSS will mitigate risks largely.
  • ELSS will generate excellent returns.

A Regular Means Of Income

ELSS is technically an excellent retirement scheme. Low investment cost per month ( INR 500 minimum), the tax benefits plus the high return rates makes it one of the best investment scheme. The judicious investment will also lower the risk that ELSS presents. Keeping all these factors in mind including the lock-in period of 3 years an individual can take any of the following routes:

  • Investing in ELSS with SIP 3 years prior to retirement: If this scheme is followed, SIP will generate monthly returns after completion of 3 years. The returns are not taxable as SIP is done under ELSS. Thus on retirement, the flow of income will not cease.
  • Investing in ELSS post-retirement as savings: This is a savings option that can be considered. If investment in made in ELSS, and withdrawal is made after 3 years an average return of approximately 22.9% will be generated (as per recent calculations). Again this serves as an income source and will be beneficial in case of an emergency.