Navigating the maze that is personal finance

Monday, 12 March 2018

How to check if your TDS is actually going to the government? Hint - View Form 26AS online

According to media reports the I-T department recently discovered a scam where companies deducted TDS (tax deducted at source) from its employees but did not deposit it with the government. So what is TDS and how can you check if the TDS deducted by your employer is actually going to the government? You need to view your Form 26AS online in order to do this.

What is TDS?
TDS stands for Tax deducted at source.  According to the Income Tax Department guidelines, a person or an organization that makes payments such as salary, commission, professional fees, interest, etc. needs to deduct a certain percentage of tax on behalf of the IT department before making payment in full. Now let us understand this concept with an example assuming that a company is paying salary to an employee and deducts TDS as per law. Let’s assume that ABC Ltd pays Rs. 40,000/- per month to an employee who falls in the 10% income tax bracket. So ABC Ltd. will deduct a tax of Rs. 4,000/- and make a net payment of Rs. 36,000/- to the employee. The amount of 4,000/- deducted by ABC Ltd will be deposited with the IT department.

So how can you check if the TDS deducted by your employer is actually going to the government?
You will need two documents in order to do so. Your salary slip and Form 26AS. The tax deduction in the salary slip should match the data in your Form 26AS.

Form 26AS is the annual statement in which the details of tax credits are maintained for each taxpayer as per the database of Income-tax Department.
Form 26AS contains details of:
  •     Tax deducted by deductors on behalf of Tax Payer
  •     Tax collected by collectors on behalf of Tax Payer
  •     Advance / Self-Assessment tax deposited by Tax Payer
  •     Refund paid by ITD to Tax Payer
Part A of the Form 26AS helps you view of all financial transactions involving TDS during the relevant year at one place.

You can view Form 26AS online using two methods.

1.    View your Form 26AS online from the income tax filing website

Step 1: Login 1 to income tax filing website

Login to online income tax filing website

Step 2: Click on ‘My Account’ – View Form 26AS (Tax Credit)

Click on ‘My Account’ – View Form 26AS (Tax Credit)

Step 3: Then you will be asked to confirm to go to the TDS-CPC website to view Form 26AS

 Confirm that you want to go to the TDS-CPC website to view Form 26AS

Step 4: Next click on the link View Tax Credit (Form 26AS)

Click on the link View Tax Credit (Form 26AS)
Step 5: Select the current assessment year and the format that you would like to see the Form 26AS in

Select the current assessment year and the format for Form 26AS
Step 6: Then scroll down to section A of the (I have selected html format) and match the Tax deducted column details listed there with the tax details in your salary slip

Match the details of your Form 26AS and salary slip

2.    View your Form 26AS online using the net-banking account of the following banks. You can View Tax Credit Statement (Form 26AS) only if your PAN number is mapped to that particular account.

In conclusion
Hope that your TDS details in Form 26AS match with the tax your company has deducted from your salary. In my next post I will explain how you can download/view your Form 26AS from two of the largest banks – SBI and ICICI.

Monday, 1 January 2018

Should I take a car loan or pay by cash

So you have decided to buy a new car. It fits in your budget and you have the required money to buy it without loan. But you still have the question – Should I take a loan for purchasing my car? Should I pay the full amount upfront? I will try and help you answer this question from a purely financial perspective.Let’s say that the on road price of your new car is Rs. 10 lakhs.

Choice 1: Go for the maximum loan amount offered by the bank

Banks usually offer a maximum loan of up to 80% to 90% of the ex-showroom price. So let’s assume that we will need to make a down payment of Rs. 2 lakhs and the bank finances the rest. The interest rates offered varies from bank to bank, but for our example let’s assume an interest rate of 9%. The EMI on 8 lakhs for 5 years is Rs. 16,607 and your total out go over the 5 years would be Rs. 996,401.

Now assuming that you will invest the remaining 8 lakhs in a Mutual Fund which gives an annual return of 12%, at the end of 5 years you will have Rs. 1,409,873.

Total money left with you = Rs. 1,409,873 - Rs. 996,401 = Rs. 413,472

Choice 2: Pay the full amount by cash

Let us assume that you will invest Rs. 16, 607 every month for 5 years in a mutual fund that gives 12% annualized return. You will have Rs. 1,369,851 at the end of 5 years.

Total money left with you = Rs. 1,369,851 - Rs. 800, 000 = Rs. 569,851

As you can see from the two scenarios, you the difference in the two approaches is close to 37%. This difference will only increase if the car loan interest rate is more than 9%.

Thursday, 28 December 2017

Get your free credit report from CIBIL in India – online

As I mentioned in a previous blog, the Reserve Bank of India (RBI) has mandated that that effective January 1, 2017, all Credit Information Companies (CICs) shall provide access, upon request and after due authentication of the requester, to a free full credit report (FFCR) once in a calendar year to individuals whose credit history is available with the CIC.  In that blog, I had listed the steps needed to get the report from CIBIL using snail mail. This blog will help you get your free credit report from CIBIL India online. 

Steps to get your free credit report in India from CIBIL online

Enter the following details and click on 'Submit'. 

Enter your name and other details
Step 2: You will have to enter your address details next and submit again. 

Enter your address details

Step 3: You will be send to a page which asks you to subscribe to the reports. Click on ‘No Thanks’ since we want a free credit report.

Optional subscription screen
Step 4: You will be sent to a page in which you will have to enter some details about your existing loan, credit card, etc. Since my details were already available with CIBIL I got the following screen.
Authentication screen

Step 5: You will receive an email with the login password. 
Email with password

Step 6: Enter your email id and the login password that you have received in your email. 
Enter temporary password
Step 7: You will be asked to choose a new login password. 
Change your temporary password

Step 8: Login with the new login password and check your personal details again.
Enter personal details again

Step 9: On submitting your details you will get your credit report.  
Your free credit report
In conclusion

It is very easy to get your free CIBIL credit report online now. Just follow the steps to know your score. Remember, you will get access to a new report every year so make use of this wonderful facility.


Monday, 18 September 2017

How to save money this Diwali

Diwali is around the corner. It's a time of celebration. At the same time it can be a big drain on your finances if not planned properly. Here are a few tips and tricks to save money during your Diwali shopping.

Use credit cards. As I have mentioned time and again, spending using credit cards is a great way of saving money as you will not only earn loyalty points but can also avail cash backs and promotions that may be running.

Plan so that you can make bulk purchase and avail more discount on sweets, gifts and so on. These purchases can be either from supermarkets or wholesale stores.

Avoid last minute rush. As Diwali nears everything is costlier, so avoid buying at the last moment, it will save you a bomb.

Use online discounts. Use the upcoming online sales to plan and buy. You can get some good discounts. But beware, don't buy because you are getting a deal, buy because you need it.

Make a list to avoid unnecessary purchases. As stated earlier, we sometimes give in to our temptations, especially when it is perceived as a bargain. Ensure that you buy what you need.

Do it yourself. This is one the best ways not only to save money but to bring that personal touch to your festival bringing family together, be it making decorations, diyas or sweets.

So follow these thumb rules and add sparkle to Diwali without bombing your pocket.

Monday, 31 July 2017

The changing saving habits of Indians - a commentary

I was reading an article in mint about the spending habits of Indians. It talked about why Indians find it hard to spend their money. I believe that culture has a big role to play in this behavior.

We are known as savvy savers and one who would squeeze the worth out of every penny. And boy do I take pride in this comment/compliment (depending on one's point of view). In a study it was found that 75% of Americans would be unable to arrange an emergency expenditure of 500 dollars. By contrast a much higher number of Indians would be able to do so (there is no number to show here but my experience says most of those around you would somehow manage the number if required).  In other words they may live in comforts better than ours but their existence is hand to mouth.

As years are passing we are incorporating this culture of consumerism in our daily lives. Whether it is buying more clothes or changing gadgets (including mobiles, cars etc.) frequently we are more and more getting inclined towards consumerism (I have known people who have spent money on mobile equivalent of their one month salary). Though we still seek value for money / deals (data of sale season revenue of popular online sites would convince you of the same), but in my opinion this habit will not survive another generation.

There is no denying that, opening of the Indian economy in 90's changed the economic landscape of India. It brought more jobs and wealth to India and made moving the social classes upwards easy. Jared Diamond (in his book- Guns, Germs and Steel) would tell you that any culture or economy that will not adapt will ultimately perish away.

The whole point here is while it is worthwhile to spend and enjoy your money, at the same time it is worthwhile and prudent to save. A balance with culture of saving is required so that we are not engulfed in culture of spending.

Sunday, 30 July 2017

Investing in stocks and mutual funds

My dear readers

You must be wondering that till now I have mainly talked about insurance and products with fixed returns while maintaining a silence on mutual funds and stocks. I would like to justify my stand. I am not a financial advisor but a person who shares his experience with readers. All my blogs till now have been products that I have used/ using and am sure can help others understand them better. I have given solutions to problems that I have myself faced as an investor/ customer/ financial services user.

I am investing in mutual funds and stocks but despite choosing them to best of my knowledge my returns have been unsatisfactory. Till I figure it out as an investor I would keep myself away from giving any advice on these instruments.

Till then I hope I bring you the knowledge that I gain everyday as an everyday person trying to manage his finances.

Sunday, 23 July 2017

All that you need to know about Pradhan Mantri Vaya Vandana Yojana (PMVVY)

Who can enroll?
Any Indian citizen above age of 60 years can enroll for this scheme.
No upper limit for age.

What is the policy term?
The policy tenure is for 10 years.

Where to get it?
The scheme can be bought online or offline from  LIC, which is the sole operator of the scheme.

What are the returns?
There is an assured return of 8% per annum.
The policyholder can get a minimum pension of rupees 1000  per month or a maximum of rupees 5000 per month.

Mode of Pension Minimum Purchase Price Maximum,Purchase Price Minimum Pension amount Maximum Pension amount
Yearly Rs. 1,44,578/- Rs. 7,22,892/- Rs. 12,000/- Rs. 60,000/-
Half-yearly Rs. 1,47,601/- Rs. 7,38,007/- Rs. 6,000/- Rs. 30,000/-
Quarterly Rs. 1,49,068/- Rs. 7,45,342/- Rs. 3,000/- Rs. 15,000/-
Monthly Rs. 1,50,000/- Rs. 7,50,000/- Rs. 1,000/- Rs. 5,000/-

The pension is for whole family and includes policy holder, spouse and dependants.

The corporation is authorized to all for life certificate 'Jeevan praman' from time to time for further releasing pensions to policy holders account.

Mode of payment
Mode of payment can be monthly quarterly half yearly or early based on the option chosen by policy holder. The payment will be made through NEFT or Aadhar enabled payment system into the account of the policy holder.

Premature withdrawal
Premature withdrawal is allowed for treatment of any terminal or critical illness for self or spouse. 98% of the invested value ( surrender value) will be refunded in such cases at policy holders request.

Documents required for premature withdrawal:
Discharge form along with the original policy document
Proof of medical treatment of self/spouse and
Proof of age, if the age is not admitted earlier.

Death of policy holder
In case of death (including suicide as cause of death) of policy holder the invested amount would be returned in full to the nominee.

Documents for claim in case of death of policy holder
Claim forms, as prescribed by the corporation,
Original policy document,
proof of title,
proof of death,

On maturity that is after 10 years of policy completion final installment of pension along with the original amount invested would be returned to the policyholder.

Documents required on maturity
Discharge form along with the original policy document 
Proof of age, if the age is not admitted earlier

Where a policyholder dies after the maturity of the policy but the proceeds and benefit of his policy has not been made to him because of his death, in such a case, his nominee shall be entitled to the proceed and benefit of his policy.

A facility for loan on the amount invested is also available after 3 years. Loan upto 75% of purchase price shall be allowed (to meet the liquidity needs). Loan interest (presently @10% per annum) shall be recovered from the pension installments and loan to be recovered from outstanding proceeds at the time of exit.

Cancellation of policy
If it is found that the policy holder is un-insurable due to terms and conditions of policy then the policy would be cancelled and surrender value will be paid as on the date of such cancellation.

Tax treatment
The proceeds from the policy are taxable in the hands of the policyholder commensurate with their  tax bracket. It is however exempted from GST.

Free look period
If a policyholder is not satisfied with the  the policy, he/she may return the policy to the corporation within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy stating the reason of objections. The amount to be refunded within free look period shall be the purchase price deposited by the policyholder after deducting the charges for Stamp duty and pension paid, if any.

Grievance Redressal Mechanism
(taken directly from policy document)

The Corporation has Grievance Redressal Officers at Branch/Divisional/Zonal/Central Office to redressgrievances of customers. For ensuring quick redressalof customer grievances LIC has introduced Customer friendly Integrated Complaint ManagementSystem through their Customer Portal (website) which is, where a registered policyholder can directly register complaint / grievance and track its status. Customers can also contact at e-mail for redressal of  any grievances.

In case the customer is not satisfied with the response or does not receive a response from LIC within 15 days, then the customer may approach the Grievance Cell of the IRDA through any of the following modes:

• Calling Toll Free Number 155255 / 18004254732 (i.e. IRDAI Grievance Call Centre)
• Sending an email to
• Register the complaint online at
• Address for sending the complaint through courier/letter:
Consumer Affairs Department, Insurance
Regulatory and Development Authority of India,
9th Floor, United India Towers, Basheerbagh,
Hyderabad – 500 029, Andhra Pradesh.
• Sending the complaint by Fax to 040-66789768

Claimants not satisfied with the decision of death claim repudiation have the option of referring their cases for review to Zonal Office Claims Dispute Redressal Committee or Central Office Claims Dispute Redressal Committee. A retired High Court / District Court Judge is member of each of the Claims Dispute Redressal Committees. For redressal of Claims related grievances, claimants can also approach Insurance Ombudsman who provides for low cost and speedy arbitration to customers.

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