HOW TO CONVERT PHYSICAL GOLD INTO E-GOLD

 

I India gold is not only an asset that Indian are invested as an asset class but also an emotion. Most Indians invest in gold in physical form. When we invest in gold in physical form it will hurt our economy in badly manner. As we know maximum amount of gold is imported. So it is directly linked foreign currency out go. That’s why over the years the government has been encouraging people to invest in the yellow metal in other forms. In 2015, it launched Sovereign Gold Bonds (SGBs).

In union budget 2023-24, the government has taken another push to encourage people to move over physical form of gold by removing the incidence of capital gains tax on conversion of physical gold to Electronic Gold Receipt (EGRs) and vice-versa. Through EGRs people can covert already purchased physical gold into electronics form. It is proposed that holding period for capital gains would include the time the physical gold was held prior to its conversion. Also, the cost of buying EGR shall be deemed the cost of gold paid for earlier.

Electronic Gold Receipt (EGRs): EGRs are held in demat accounts and traded on the exchanges in the same way as stocks. The government has approved the creation of a gold exchange to trade EGRs just like stocks are traded on BSE and NSE.

Process of conversion:

1.       Open a demat account with a trading member or depository with all the necessary documents.

2.       Deposit the gold bar or Coin with vault manager at a SEBI approved delivery location. The manager will assess the gold quality and scrutinise the paperwork.

3.       The vault manager will create EGR in multiples of 1gm and record the information on an interface shared by depositories, stock exchanges, vault managers and Clearing Corporation Of India Limited (CCIL).

4.       The manager will assign an International Securities Identification Number (ISIN) provided by the National Securities Depository LTD, to the EGR for trading on a stock exchange.

5.       CCIL will notify the stock exchange and depository of the change in EGR’s beneficial owner at the end of the trading day. The EGR is then listed on the exchange for trading.

6.       Likewise, you can convert EGR into physical gold by sending a request to the depository, which forwards the case to the vault manager, who, in turn, clears the gold delivery.

7.       Underlying gold can be removed from the vaults and returned in physical form when the holder wants.

8.       Gold deposited at one location and with one vault manager can be withdrawn from another area of the same or different vault manager if physical gold is available.

Although initiatives taken by the government is very much useful in our economy but the process is very document oriented. So it is very much difficult for common man to complete this process.

 

 

 

 

WHICH PENSION SCHEMES ARE BENEFITED MOST UPS OR NPS

Cabinet approves Unified Pension Scheme (UPS) and agrees to introduce from April 1, 2025 as an alternative to the National Pension Scheme (NPS). NPS is little bit old concept. Under NPS employees contribute 10 per cent of their salary while the government contributes 14 percent. The money is invested in equities, government securities and corporate bonds. Under retirement 40 percent of the corpus must be annuitised.

The salient features of the UPS are:

1. Assured pension: 50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period upto a minimum of 10 years of service.
2. Assured family pension: @60% of pension of the employee immediately before her/his demise.
3. Assured minimum pension: @10,000 per month on superannuation after minimum 10 years of service.
4. Inflation indexation: on assured pension, on assured family pension and assured minimum pension.

Dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of service employees

5. lump sum payment at superannuation in addition to gratuity

          1/10^th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service.This payment will not reduce the quantum of assured pension.

UPS merges element of defined contribution and defined benefit. Employees contribute 10 percent of their basic salary plus dearness allowance (DA) while the government contributes 18.5 percent of their basic salary plus DA.

CONCLUSION: how one decides what would be the right choice. Individuals comfortable with higher risks should stay with the NPS. For those who are risk averse and seek a defined benefit, UPS might be a superior option. Moreover an employee’s choice should be aligned with other his/her overall investments made in different class of assets.

  

MUTUAL FUND: DIFFERENT MODE OF HOLDING

 

Basically there are two types of holding is available. One is single holding under which an individual is the sole owner of the mutual fund units. Second one is joint holding allows two or more individuals to own the mutual fund units together. Joint holding further subdivided into two categorised:

Joint –either or survivor: any of the joint holders can operate the account independently. If one holder dies, the surviving holders become the owner of the units.

All or survivor: here the entire joint holder must sign for any transaction and if any holder dies the surviving holders become the owners.

UNIFIED PAYMENT INTERFACE-INNTEROPERABLE CASH DEPOSIT (UPI-ICD)

 

A new feature called Unified Payment Interface- interoperable cash deposit (UPI-ICD) is changing the way you deposit cash at ATM’s. It allows one to deposit cash into your bank account using any UPI app, eliminating debit card. Initially available at select ATMs of Axis Bank and Union Bank of India, more banks are expected to roll out this service soon.

HOW IT WORKS

 Identify ATMs equipped with advanced cash recycler machines that support UPI-ICD. Open your UPI app and Scan the QR code displayed on the ATM screen. Enter the amount you wish to deposit and select the beneficiary account. Insert cash into the ATM’s deposit slot. Verify the details and complete the transaction using your UPI-PIN. Funds are credited to the beneficiary account instantly in real time mood.  The ATM’s cash recycler machine verifies the authenticity of the deposited notes. There is a limit of Rs. 50000 per transaction.

The entire process is digital that eliminating the need for physical slip or paperwork.

Source: Business Standard

NPS Vatsalya Scheme

 

The union Budget 2024 has announced a new investment avenue in the form of the NPS Vatsalya Scheme. This scheme is designed to support long-term saving for minors. Wherein parents can open an NPS account in the name of a minor child.

Key Feature:

Early Start: Parents can save for their child’s retirement as early as infancy.

Long-term benefit: power of compounding can significantly enhance returns over a long investment horizon.

Account Conversion: on reaching adulthood, the child’s account will automatically transition into a regular NPS account.

Minimum Investment: Parents can start with a modest monthly contribution of Rs.500 or an annual contribution of Rs. 6000.

NPS vatsalya scheme is designed for long term wealth creation specially for retirement planning not for any short term planning such as higher education, child marriage etc.

STEPS NEED TO BE TAKEN WHEN MONEY SENT IN WRONG ACCOUNT VIA UPI

 

In recent time it is very essential to know how money can be send via UPI. UPI means Unified Payment Interface with increasing trend in transfer of money via UPI it is necessary to know how to get money back if one has sent money to wrong UPI address.

In this respect RBI has issued guideline to help in such situations:

Contact the recipient directly

First, try to contact the person who received the money by mistake. Politely ask them to return it, and make sure to provide them with the transaction details.

Reach out to UPI app customer support

If the recipient isn’t cooperative or if you can’t reach them the next step is to report the transaction to your UPI app’s customer support. They can help you start the refund process.

File a complaint with NPCI

If one is unable to resolve the issue through customer support. One can escalate the matter by filling a complaint with the National Payment Corporation of India (NPCI)

Get help from your bank

Inform your bank about the mistaken transaction as soon as possible. Give them all the necessary details, and they can help initiate chargeback to recovery the funds.

Call the toll-free number

In case of a wrong UPI address transaction, you can also call the toll-free number 1800-120-1740 for assistance.

What if you sent money by scanning wrong QR code

In this case too, report the error to your UPI app’s customer support along with the transaction details.

 

 

 

TAX ON EPF WITHDRAWALS

 

Sec. 192A of the Income Tax Act 1961 regulates the deduction of TDS on withdrawals from Employee Provident Fund (EPF).

TDS will be deducted in the following scenario:

If an employee withdraws an amount equal to or exceeding Rs. 50000 with less than 5 years of service TDS will be deducted @10% if FORM 15G/15H is not submitted, provided employee has submitted their pan. TDS will be deducted @ 20% if employee fails to submit their pan.

No TDS applicable in the following circumstances:

Ø  Transfer of provident fund from one account to another.

Ø  Termination of service due to the member ill health, discontinuation of business by the employer, completion of project or any other reason beyond the member’s control.

Ø  Withdrawal of PF after completing of five years of services.

Ø  If the PF withdrawals is less than Rs. 50000 and the member has served for less than five years.

Ø  If the employee withdraws Rs. 50000 or more with less than 5 years of services but submits FORM 15G/15H along with their PAN.