Microfinance loans provide essential financial services to individuals and groups without access to traditional banking. These loans support self-employed entrepreneurs in rural areas, such as farmers and small traders, helping them start or grow businesses and achieve financial independence.

The Kumar family from Heempur Deepa, Bijnor, is a prime example of the impact of microfinancing. Facing numerous challenges, Akash Kumar and his wife Radha transformed their struggling shop into a thriving business with the help of a microfinance loan from Tata Capital. 

This article details their journey, showcasing how microfinance helped them overcome financial challenges and improve their lives.

About the Kumar Family

Akash Kumar and his wife Radha live in Heempur Deepa, a small village in Bijnor. They belong to a large family, including Akash’s four brothers and parents. They have two young children, a six-year-old daughter and a one-and-a-half-year-old son. For the past six years, Akash has managed the family business, “Mandeep Matching Centre,” a small shop selling cloth pieces, cosmetics, bangles, and other items.

What were the Challenges Faced by the Kumar Family?

Despite running an established family business, the Kumar family faced several challenges. Their primary issue was the shop’s small size, which limited their ability to stock popular items, often leaving customers empty-handed.

They also struggled financially, earning only Rs. 500 to Rs. 1,000 daily, which wasn’t enough for household expenses and their children’s education. Living in a village made it difficult to access loans, forcing them to borrow money from local lenders at high monthly interest rates of 5%.

However, their situation improved when they learned about the Joint Liability Group for Women. Through this group, they secured a Pragati loan from Tata Capital, which helped them overcome their financial challenges.

What is a Pragati Loan, and How Did it Benefit the Kumar Family?

A Joint Liability Group consists of 8-10 women who support each other financially and share the responsibility of loan repayment. Once you join this group, you become eligible for a Pragati loan. 

Pragati Loan is a type of microfinance loan offered by Tata Capital. This loan is designed to support economically active women in low-income areas. Here are a few key advantages that the Kumar family benefited from by securing a Pragati loan:

1. Substantial loan amount – The Kumars received a high loan amount of Rs. 45,000.
2. Flexible repayment tenure – Unlike local lenders who demand lump-sum repayments, Tata Capital offers a long repayment tenure of up to three years, allowing Kumars to repay the loan comfortably.
3. Quick processing – Within two days, the sanctioned loan amount was disbursed into the borrower’s account, helping them make the required changes quickly.

What Impact Did Microfinance Loans Have on the Kumar Family Business?

The Pragati loan had a transformative impact on Akash and Radha’s business, allowing them to make several critical improvements:

1. Shop expansion – The loan allowed them to remove a wall, increasing the shop’s size. This expansion provided more space to display and store various products.
2. Increased stock – With the additional space, they could stock more items that were in high demand, attracting more customers and boosting sales.
3. Improved lifestyle – With better sales and income, they could provide better education and facilities for their children, improving their family’s quality of life.

The Bottom Line

With the help of a microfinance loan, the Kumar family no longer had to rely on local lenders. They achieved their goal of expanding the shop, providing better education for their children, and improving their quality of life. 

If you run a business like the Kumars and lack the funds to increase your stock, buy new equipment, or expand your shop, turn to Tata Capital. We offer microfinance loans with flexible repayment terms of up to 36 months, a high loan amount ranging between Rs. 50,000 and Rs. 1,00,000, and attractive interest rates to help you achieve your business goals.
So what are you waiting for? Visit the Tata Capital website or download the Tata Capital App to apply for a microfinance loan today.

The financial challenges brought about by the COVID-19 pandemic and economic recessions have highlighted the need for effective financial planning. Many individuals have realised the importance of having a reliable financial safety net to manage unexpected expenses. 

Shived, a business head at an NGO, is among them. For him, a personal loan overdraft facility has proven to be the ideal solution for such situations. This article explores how Shived effectively managed his finances using this facility. 

But first, let’s understand what a personal loan overdraft facility entails.

What is a Personal Loan Overdraft Facility?

A personal loan overdraft facility is a type of credit line provided by financial institutions that allows individuals to borrow money up to a certain limit. Unlike a standard personal loan, where the entire loan amount is disbursed at once, an overdraft facility enables you to withdraw funds as needed. Interest is charged only on the amount withdrawn, not on the total sanctioned limit. This feature makes it an attractive option for those who require flexibility in their borrowing. 

How Did a Personal Loan Overdraft Facility Help Shived?

Shived, the business head for the B2C vertical of an NGO, began his career in 2005. During the recession and post-COVID-19 period when expenses skyrocketed and uncertainty loomed large, he realised the importance of saving, investing, and planning for contingencies like sudden hospitalisations. For Shived, the perfect tool in such scenarios was the personal loan overdraft facility from Tata Capital.

He found this financial product particularly useful when he switched jobs a couple of years ago and needed to pay off some liabilities. By utilising the personal loan overdraft facility, Shived managed his financial obligations efficiently. 

Shived found that the personal loan overdraft facility was very accessible. With just a few clicks on his phone, the funds were available whenever needed. The ease of access and usage, along with the availability of funds at his disposal and a lower interest rate, made it an ideal choice for him.

What are the Advantages of a Personal Loan Overdraft Facility?

The personal loan overdraft facility offers several benefits that cater to diverse financial needs:

1. Easy repayment options – Borrowers only pay interest on the amount they use. Some lenders also offer a part-payment facility without extra charges, providing more control over repayments.
2. Convenient tenures – A personal loan overdraft facility offers flexible tenures ranging from 12 to 84 months. Additionally, the credit limit and dropline overdraft period are predetermined, giving clear and predictable repayment terms.
3. Quick access to funds – The facility provides quick access to funds, which is essential during emergencies or unexpected financial requirements.
4. High loan amounts – A personal loan overdraft facility allows access to large sums of money, which can be helpful in expanding a business, covering urgent personal expenses, or managing other significant financial needs.
5. Multiple withdrawals via online transactions – Unlike regular loans, which allow a one-time withdrawal, this facility lets borrowers withdraw and repay funds multiple times, offering greater flexibility.

What are the Eligibility Criteria for a Personal Loan Overdraft Facility?

Eligibility for a personal loan overdraft facility may vary between lenders, but generally, the criteria include:

1. Applicants should be between 21 and 58 years old.
2. The applicant must have a credit score of 725 or above.
3. eBoth salaried and self-employed individuals can apply, but proof of employment or business ownership may be required.

Final Thoughts

The personal loan overdraft facility is a versatile financial tool that can provide much-needed flexibility and convenience for managing finances. As demonstrated by Shived’s experience, it can be a lifeline for individuals facing temporary financial challenges. By allowing borrowers to withdraw only what they need and repay conveniently, it helps them sail through unforeseen emergencies smoothly. 

If you’re seeking a reliable and flexible financial solution, consider Tata Capital’s personal loan overdraft facility. With attractive interest rates, minimal documentation, and easy eligibility criteria, our personal loan OD facility offers the support needed to navigate financial uncertainties effectively.

Visit the Tata Capital website or download the Tata Capital App today to apply for a personal loan OD facility and manage your finances effectively, just like Shived!

Dr. Venkat Mahadev Alat is a dedicated doctor born in Chincholi, Latur district. He runs VMAC Hospital in Navi Mumbai, a facility he established to make quality medical services accessible to lower-income groups. 

Building this hospital was a dream he pursued with passion, but bringing it to life required substantial financial support. To secure the necessary funds, he chose to take out a loan against property. This decision was pivotal in turning his vision into reality. 

In this article, we explore how a loan against property played a crucial role in Dr. Venkat’s journey. But first, let’s understand what a loan against property entails.

What is a Loan Against Property?

A loan against property (LAP) is a secured loan where individuals pledge their residential or commercial property as collateral. The loan amount depends on the property’s market value, providing a substantial sum at competitive interest rates. LAP offers flexible repayment options, making it an attractive financing option for significant expenses like education, medical emergencies, or, in Dr. Venkat’s case, establishing a hospital.

Who is Dr. Venkat Mahadev Alat?

Dr. Venkat Mahadev Alat hails from Chincholi in Latur district. Despite his humble beginnings, with his parents being farmers, he pursued his passion for medicine, completing his post-graduation in pediatrics in Latur. His journey was filled with challenges, especially given his non-medical family background and the financial constraints they faced.

After moving to Navi Mumbai, Dr. Venkat noticed a critical shortage of doctors and the lack of government hospitals in the area. Recognising the difficulty low-income families faced in affording private healthcare, he decided to establish VMAC Hospital Private Limited to bridge this gap.

How Did a Loan Against Property Help Dr. Venkat Mahadev?

Building VMAC Hospital was a formidable task for Dr. Venkat. The high real estate costs in Mumbai and the need for essential medical equipment and machinery posed significant challenges. To overcome these obstacles, he sought financial assistance from Tata Capital. He secured a loan against property at a reasonable interest rate, which provided the necessary funds to purchase medical equipment, machinery, and other essential items to build the hospital.

Today, VMAC Hospital admits around 25-30 patients per month and treats approximately 15-20 patients daily on an outpatient basis. Dr. Venkat’s goal is to offer medical treatment to patients from all backgrounds, ensuring affordable care without compromising quality.

What are the Advantages of a Loan Against Property?

Here are a few advantages of securing a loan against property:

1. Competitive interest rates: Loans against property typically come with lower interest rates compared to unsecured loans.
2. Wide range of collaterals accepted: Borrowers can secure a loan against various types of properties, including residential, commercial, land, plot, and industrial properties.
3. Longer repayment tenure: LAP loans come with a tenure of up to 15 years, allowing you to repay the loan comfortably over a longer period.
4. Loan against property overdraft facility: Some lenders offer a loan against property overdraft facility to help you meet financial emergencies with ease.

What is the Eligibility Criteria to Apply for a LAP Loan?

To apply for a loan against property, applicants need to meet specific eligibility criteria:

1. Salaried employees must work in an MNC, Public Ltd. Co., Large Pvt. Ltd. Co., State Govt., Central Govt., or PSU.
2. The applicant must be between 23 and 65 years old at the time of loan maturity. For self-employed individuals, the maximum age is 70 years.
3. The minimum income for salaried employees is Rs. 2,40,000, per annum while for self-employed individuals it is Rs. 2,50,000 per annum.
4. A minimum of 3 years of occupational stability is required.

Final thoughts

Dr. Venkat Mahadev Alat’s journey from a small village in Latur to running a successful hospital in Navi Mumbai is truly inspiring. By securing a loan against property, he fulfilled his vision of making healthcare accessible to all.

If you want to expand your business, renovate your property, or require capital to meet working capital needs, consider Tata Capital’s Loan Against Property. We offer LAP loans with high loan amounts, flexible repayment tenure, and attractive interest rates so that you can achieve your goals just like Dr. Venkat Mahadev Alat.

Visit the Tata Capital website or download the Tata Capital App to apply for a loan against property!

We all have come across bright students who have missed their higher education because of a lack of financial means. So time and again, central and state governments announce student credit cards for Indiaor a specific state dedicated to helping deserving students fulfil their dream of completing their higher education.

On 30th June 2021, West Bengal’s Chief Minister, Mamata Banerjee, unveiled the West Bengal Student Credit Card (WBSCC) scheme and tagged it as the most significant global project of this kind. The primary aim of this scheme is to make higher education more accessible by providing inexpensive loans to deserving candidates. 

The student credit card scheme in West Bengal was promised by Mamata Banerjee in her election manifesto and pledged to provide students with a soft loan with a reduced interest rate. Read on to learn the basics of the West Bengal Student Credit Card scheme.

What is the West Bengal Student Credit Card?

“I am delighted to announce that GoWB has launched the #StudentCreditCard today.

To make the youth of Bengal self-reliant, the scheme shall provide a loan of up to ₹10 Lakh with an annual simple interest. (1/2)”

• Mamata Banerjee via @MamataOfficial, June 30, 2021

Student credit cards are for those who do not have a source of income to support their studies. They enable beneficiaries to borrow up to a specified limit. 

The West Bengal Student Credit Card (WBSCC) scheme is a similar scheme for students studying within or outside India. It aims to enable them to pursue higher education without any monetary restrictions.

West Bengal Student Credit Card Loan Amount and Interest Rate

As the name suggests, the WBSCC scheme provides a collateral-free loan of up to INR 10 lakh to students at a nominal interest rate of 4%. These can be availed via any state cooperative bank, affiliated central cooperative banks, district cooperative banks, or public/private sector banks. 

What is the Objective Behind the Student Credit Card of West Bengal?

The Higher Education Department of the West Bengal government rolled out the WBSCC scheme to help students pursue higher education without getting drowned in the heavy interest burden that usually accompanies personal loans. It is a security-free forwarding to help deserving students access quality education. 

The WBSCC supports students to continue their education, be it secondary, higher secondary, undergraduate, post-graduate, or madrasah, and includes professional degrees and other equivalent courses in any specified institute within the country or outside. 

The scheme even covers those who are appearing for competitive exams, such as medical, law, engineering, IPS, IAS, and more. 

Eligibility Requirements for West Bengal Student Credit Card

Here are the eligibility requirements to benefit from the Student Credit Card scheme of West Bengal:

• The applicant must be between 15 and 40 years of age. 
• They must be an Indian National and a West Bengal resident for the last ten years or more on the card application date.
• The applicant must have completed their Class IX education from any recognized boards in the state. 
• They must be enrolled for higher studies within the country or abroad. 

Loan Repayment Terms

Here are the repayment terms attached to the WBSCC scheme: 

• The repayment period would be 15 years, including a moratorium/repayment holiday, for any loan availed under this scheme.
• Students can avail of a 1% interest concession if they can pay the interest entirely during the study period. 
• The student or their legal guardian/parent can repay the loan before its stipulated due date without bearing any prepayment penalty or any other charges of any kind. 

Documents Required to Apply for a Student Credit Card (WBSCC)

Given that it is a collateral-free loan, there is extensive documentation involved while applying for a loan under the West Bengal Student Credit Card scheme. Here is what an applicant will need: 

• A colour photograph of the applicant in JPEG/JPG format and size no greater than 50 KB and no less than 20 KB
• In case there is a co-borrower, colour photograph of them in JPEG/JPG format and size between 20 KB and 50 KB
• Signature of the applicant in JPEG/JPG format and size between 10 KB and 50 KB
• Signature of the co-borrower in JPEG/JPG format and size between 10 KB and 50 KB
• Photocopy of Student’s Aadhaar Card in PDF format and size no greater than 400 KB and no less than 50 KB. In the absence of Aadhaar Card, student’s class X Board Registration Certificate of a size between 50 KB and 400 KB
• Address proof of the guardian in PDF format and size between 50 KB and 400 KB
• PAN Card of the student/undertaking form if they do not have a PAN Card in PDF format between 50 KB and 400 KB
• PAN Card of the co-borrower/undertaking form if they do not have a PAN Card in PDF format and size between 50 KB and 400 KB
• Relevant document containing course fee/tuition fee in PDF format and size between 50 KB and 400 KB
• Admission receipt for the course they are pursuing
• ITR of co-borrower for the last two years, if filed. If they do not have their ITR copies, they need an income certificate approved by their local BDO/SDO

Expenses Covered

The West Bengal Student Credit Card is proposed to cover the following expenses: 

• Fees charged by the school/college/university/professional institutes and competitive coaching institutes or for entrance examinations
• Fees to be paid for accommodation in a hostel or as PG (paying guest)
• Cost to be borne for buying books, digital devices, equipment, and more for education purposes
• Any deposit to be made to the institution, library, and laboratory
• Any other course-related expenses, such as project work, thesis submission, or study tours

The applicant can spend a maximum of 30% of the amount forwarded towards non-institutional purposes, such as buying books, study tours, and equipment purchases. 

How to Apply for a West Bengal Student Credit Card

To apply for the West Bengal Student Credit Card, the applicant can follow these steps: 

• The applicant can apply for the student credit card online by visiting www.wb.gov.in or https://banglaruchchashiksha.wb.gov.in. Click on the Student Credit Card tab to apply.

The applicant can also visit the West Bengal Student Credit Card website (https://wbscc.wb.gov.in) and tap on the Registration of Student option to proceed.

• Click on the Register option to generate a unique User ID and Password. It will be sent to the mobile number and used for submission of the application and all future purposes.
• Enter the essential details, such as name, date of birth, Aadhaar number, and gender. If the applicant doesn’t have the Aadhaar number, additional information on Class X passing out is required. 
• Fill up the co-borrower’s details, such as PAN and occupation, and address details in the next section. 
• Enter permanent address, course, and income details in the next section, including assembly, annual income, and course name with year of completion.
• Fill up the bank details of the student and the co-borrower, including the name of the bank, branch name, and account number. 

How to track the WBSCC application?

Here are the easy steps to help track student credit card details online:

• Visit the official website of theWest Bengal Student Credit Card scheme and login into the account using the Student login option. 
• Click on the “Track application” option. It will preview the current status of the student credit scheme application. 

Contact Details

For assistance or in case of any problem, the WBSCC officials can be contacted via their helpline number or email. Here are the details:

• Helpline Number: 18001028014
• Email ID: contactwbscc@gmail.com
• Support: wbscc@bangla.gov.in

 Conclusion

The West Bengal Student Credit Card scheme is a welcome move by the state government in the wake of the rising costs of higher education. Until 2021, over 120,000 applications were submitted, and 50,000 were sent to the banks for approval. While some were rejected or returned to the district administrations, 6,000 had been accepted. It propelled H K Dwivedi, Chief Secretary, to set up a committee in each district to understand the reasons behind such denial. 

This article attempts to give a fair idea about the West Bengal Student Credit Card Scheme.

If a loan approval under the WBSCC scheme isn’t getting cleared, a great alternative is the Education Loan via Tata Capital. The loan application process is entirely online, and loans up to INR 30 lakh are offered for domestic and international causes. 

FAQs

1. Who is eligible for a student credit card in West Bengal?

Applicants must be between 15 and 40 years old, Indian nationals, and West Bengal residents for at least ten years. They must have completed class 10th and be enrolled in higher studies within India or abroad.

2. Which bank is better for a student credit card?

Several banks offer competitive student credit cards with low fees, spending rewards, and easy applications. Choose based on your needs and the benefits each bank provides. Compare features such as interest rates, fees, and rewards. 

3. What is the student credit card scheme in West Bengal?

The West Bengal Student Credit Card Scheme offers collateral-free loans up to Rs. 10 lakhs for higher education. The loan has a low interest rate and a 15-year repayment period, helping students manage educational expenses. 

4. What is the interest rate of WBSCC loan?

The interest rate for the WBSCC loan is 4%. This low rate helps students afford higher education without financial strain. If you’re ineligible for this loan, you can apply for an education loan with Tata Capital at an attractive interest rate. 

You must have seen that small shop with a long queue of people standing outside with empty bags and bottles in their hands. These are government shops for distributing essential items like food and oil to the public below the poverty line. The main benefit of these Public Distribution System (PDS) shops, commonly known as ‘Ration ki Dukaan’, is that items are provided to the public at a discounted or subsidised price. The Government of India occasionally introduces beneficial schemes designed to improve the well-being of its citizens.

These schemes serve multiple purposes, with some focusing on uplifting people economically and others enhancing their overall quality of life. Besides that, the Indian government also extends different subsidies to MSMEs to foster their growth and development.

So, in this article, we will explain everything about subsidy like, what is subsidy, its types and categories, and discuss a few popular business subsidy schemes provided by the Indian government.

What is subsidy? 

A subsidy is a financial benefit or support the government gives to institutions or individuals. It can be either a direct or indirect subsidy.

Direct subsidy refers to the support given in the form of cash. The indirect subsidy, conversely, refers to the assistance offered through tax cuts or low-interest loans. The loan subsidy meaning is to provide the loan at lower interest rates and with other features that help the business grow. And the government subsidy meaning is the financial help given by the government to ease the burden on the recipients and encourage activities in the public’s interest.

Types of subsidy

There are broadly six types of subsidies, as explained below.

#1. Food subsidy

Its main aim is to provide essential food to people below the poverty line. Public Distribution System (PDS) is a government initiative providing essential food items to Below Poverty Line (BPL) households at subsidised rates. These include wheat, rice, sugar, milk and cooking oil.

#2. Export subsidy

The government provides export subsidies to encourage small domestic businesses to diversify their customer. One such scheme is Merchandise Export from India. It aims to promote the export of notified goods manufactured in India.

#3. Production subsidy

A production subsidy allows companies to reduce their production cost. They can increase production value by cutting down their losses and investments. This helps in making products available at a lower price, improving affordability.

#4. Subsidies based on industry

These subsidies are tailored to meet the needs of the industries they are intended for. They cover various sectors, including transport, health, and agriculture. The government, for example, has launched several transport schemes to make transportation more affordable.

It also gives subsidies to help farmers and businesses reduce the initial input cost. This includes providing fertiliser, seeds, power supply, and irrigation facilities at subsidised rates.

#5. Tax subsidy

This subsidy program grants eligible parties a tax rebate and other benefits. It relieves the financial burden on business owners, allowing them to improve production, extend services, and offer products at a lower price.

#6. Employment subsidy

These schemes are designed to tackle unemployment. The government offers incentives such as lower initial investment costs or reduced real estate rates to organisations to start a company. These measures are aimed at promoting job growth and reducing unemployment.

Now that we know what is subsidy, let’s look at its different categories.

What are subsidy categories?

There are two categories of subsidies, namely, social and economic. Depending upon its impact, it falls into either of the two categories. Here’s a detailed breakdown of the two categories.

Social Subsidy	Economic Subsidy
Rural housing	Transport
Sanitation	Industry
Water supply	Irrigation and food control
Healthcare	Agriculture
Education	Industry
Women empowerment	Communication

Indian Goverment Subsidies for Business

MSMEs play a crucial role in boosting India’s economy. The subsidy provided by the Indian government supports their growth. A few of them are mentioned below.

#1. Credit-linked Capital Subsidy Scheme (CLCSS)

This government subsidy loan for business aims to fund technological upgrades in Small-Scale Industries (SSIs). The funds can be used to revamp business production and activities to reduce the cost of creating and providing goods and services. SSI units that get benefits include tiny units, khadi units, village units and coir industrial units.

#2. Marketing Assistance Scheme

It is a scheme provided by the Ministry of MSME, inter-alia, through the National Small Industries Corporation. It helps MSMEs market their products at exhibitions, trade fairs, and buyer-seller meets.

#3. Mahila Coir Yojana 

This subsidy scheme helps eligible rural women avail of a one-time subsidy of up to 75% of the total cost of the new motorised ratt or Rs. 7,500, depending upon the case.

#4. Amended Technology Upgradation Fund Scheme (ATUFS)

The Ministry of Textiles launched ATUFS. It aims to convert existing looms to better technological looms to improve productivity and quality. Some of the beneficiaries of this scheme are the jute, silk, and garment sectors.

#5. Technology & Quality Upgradation (TEQUP) Support for MSME 

Technology & Quality Upgradation(TEQUP) is an initiative by the Ministry of MSME. Its main objective is to make the MSME sector energy efficient and increase competitiveness.

#6. Government Subsidy for Small Business for Cold Chain

The Ministry of Food Production Industries launched this scheme. It provides an integrated cold chain without any break from the farm gate to the buyer. It covers pre-­cooling facilities at production sites, mobile cooling units, reefer vans, and value-addition centres.

What are the benefits of subsidy?

As a subsidy is a social and economic welfare scheme by the government, it has many benefits:

#1. Subsidised education helps further contribute to the nation’s GDP, as increased education leads to higher employment. It also leads to an increase in skilled workers.

#2. It helps struggling markets by lowering the burdens and providing financial support for future ventures. It’s an indirect means to support the country’s employment and industrial sectors.

#3. Subsidies provide incentives and tax benefits to business owners. This leads to increased production and a continuous flow of demand and supply. 

#4. It helps lower the cost of essential items and make them affordable to the general public.

#5. Besides helping the traditional sectors, such as agriculture sectors, to flourish, subsidies also encourage the advancement of new areas of research and development.

What Is the Difference Between Direct and Indirect Subsidies?

Direct subsidies involve the actual payment of money to a group or individual. These are often in the form of cash payments, grants, or specific financial support to reduce the recipient’s cost of goods, services, or production.

On the other hand, indirect subsidies do not involve direct financial payments. Instead, they include measures such as tax breaks, reduced interest rates, insurance, or rebates that indirectly reduce costs or provide economic benefits to businesses or individuals.

Parting thoughts

So, after learning everything about what is subsidy and its benefits, we understand that subsidies can be a powerful tool for promoting economic growth and improving people’s lives. While it can help keep prices low for consumers and boost production, it provides opportunities for people and MSMEs to start and grow their businesses. The Indian government has launched several subsidy schemes to support small-scale industries in India.

If you are considering launching a new business or expanding an existing one and need immediate funds, look no further than Tata Capital. We offer business loans with minimal documentation at affordable rates. Visit our website for more information.

FAQs

1. What is a subsidy loan?

A subsidy loan is a type of financial assistance provided by the government to promote the growth of businesses in various sectors. These loans are offered at reduced interest rates, and a portion of the interest rate is subsidised by the government, making the overall cost of the loan more affordable for the borrower.

2. Which is an example of a subsidy?

An example of a subsidy is the food subsidy provided to people below the poverty line. It aims at providing essential food to people at subsidised rates to eradicate hunger. The Public Distribution System is a government initiative that provides essential food items, such as wheat, sugar, rice, and cooking oil to Below Poverty Line (BPL) households at a subsidised rate.

3. What do you mean by subsidy?

Subsidy is financial assistance provided to support the growth of specific businesses, industries, or individuals. It aims to promote economic and social development by making goods and services more affordable, encouraging production, or supporting the incomes of certain groups.

4. What is the subsidy given by the government?

A subsidy is a financial incentive provided by the government to businesses, institutions, or individuals through cash, grants, reduced interest rates, or tax breaks to ease the financial burden on the recipients. It aims to promote social and economic policies in the public’s interest.

5. How many types of subsidies are there in India?

A subsidy is broadly categorised into two types- direct and indirect subsidy. Within indirect subsidy, there are six types of subsidies: production subsidy, export subsidy, food subsidy, tax subsidy, employment subsidy, and subsidy based on industry.

6. What is the classification of a subsidy?

Subsidy can be classified as direct and indirect. Direct subsidy involves financial transactions between the government and specific recipients, such as cash payments or grants. Meanwhile, indirect subsidy does not involve direct cash transactions but includes measures that reduce the price of goods and services. Indirect subsidies include tax breaks, reduced interest rates, insurance, etc.

In this age of technological advancements and digitalisation, it is crucial to keep up with the latest digital banking features to ensure seamless transactions. One such essential feature is linking your mobile number with your bank account. By associating your mobile number with your account, you unlock several benefits, such as secure transactions, real-time notifications and easy access to various banking services at your fingertips.

In this comprehensive article, we will walk you through the simple and user-friendly steps to link your mobile number with your bank account. Let’s get started on this empowering journey to enhance your banking experience!

Importance of Linking Mobile Number to Bank Account

Digital banking has made financial management more convenient than ever before. However, this convenience comes with its own set of responsibilities. A fundamental measure you can adopt to secure and streamline your digital banking experience is linking your mobile number with your bank account. This seemingly small step carries with it significant benefits, which we will discuss in greater detail below.

Security: Linking your mobile number with your bank account adds an extra layer of security to your account. For instance, if someone tries to make a transaction without your knowledge, you will receive an immediate alert, helping you take timely action.

Notifications: Every time there is a transaction made from your account, your bank will notify you instantly via SMS. So, whether you have just swiped your card at a supermarket or transferred money online, you will be in the loop, keeping your finances under check.

Mobile Banking Services: Mobile number linkage enables you to use your bank’s mobile banking services. From checking your account balance to making transfers, everything becomes accessible at your fingertips.

Ease of Communication: Linked mobile numbers also serve as the primary point of contact between banks and their customers. Banks use your registered mobile number to communicate important information regarding your account. Whether it is an update about changes in interest rates, new banking features or scheduled maintenance downtime, you will receive all this information on your linked mobile number.

3 Ways to Link Mobile Number Link to Bank Account

To link your mobile number with your bank account, you can opt for several methods. These include online methods such as internet banking and mobile banking apps, and offline methods such as visiting your bank branch or using the ATM. Let us take a look at each method with examples.

Steps to Linkmobile number link to bank account online Through Internet Banking

Are you wondering how to link a phone number with a bank account online? Linking your mobile number through Internet banking is one of the most convenient ways. The process for doing this is explained below.

Login to your Internet Banking Account: Use your user ID and password to log in to your Internet banking account. For example, if you are an HDFC Bank customer, you would visit the HDFC Bank website and enter your login credentials.

Navigate to the ‘Profile’ or ‘Personal Details’ Section: Once logged in, look for sections named ‘Profile,’ ‘Personal Details’ or ‘Update Contact Information’ in the main menu. Banks usually have these options in a drop-down menu under ‘Services’ or ‘Settings.’

Enter Your Mobile Number: You will see an option to enter or update your mobile number. If you are a new user, you will be asked to register your mobile number. If you are an existing user, you can update your mobile number in this section.

Confirm Your Mobile Number: After entering your mobile number, you will be asked to confirm it by re-entering it. This is to ensure that you have entered your mobile number correctly.

Validate Using OTP: Your bank will send an OTP (One-Time Password) to the mobile number you have entered. Enter the OTP in the designated field to verify your number. Upon successful verification, your mobile number will be linked to your bank account.

Steps to Link Mobile Number Through Mobile Banking Apps

Banking apps provide another avenue to link your mobile number to your bank account. The process is similar to Internet banking.

Login to Your Banking App: Log in to your bank’s mobile app using your login credentials. For instance, if you are a Citibank customer, you would log in to the Citi Mobile app.

Navigate to the ‘Profile’ or ‘Personal Details’ Section: Look for the ‘Profile’ or ‘Personal Details’ section in the menu of the app.

Enter and Confirm Your Mobile Number: Enter your mobile number, confirm it and then validate using the OTP sent to your mobile number.

Steps to Link Number through ATM

While not all banks offer this service, some allow you to link your mobile number through an ATM. The steps for linking mobile number through ATM include the following:

Insert Your ATM card: Visit your bank’s ATM, insert your ATM card and enter your PIN.

Select the ‘Mobile Number Registration’ Option: From the main menu, select the ‘Mobile Number Registration’ or a similar option.

Enter Your Mobile Number: When prompted, enter your mobile number.

Confirm Your Mobile Number: Confirm your mobile number by re-entering it. Upon confirmation, your number will be linked to your bank account.

How to Check Mobile Number Linked With Bank Account

To ensure smooth and secure banking transactions, it is essential to check if the mobile number is linked with a bank account. Some common methods to check if your mobile number is linked to your bank account include checking your banking app or Internet banking’s personal info section, calling the bank’s customer care helpline, visiting the nearest bank branch and using SMS-based banking services.

Conclusion

Linking your mobile number to your bank account may seem like a small step, but it makes a significant difference to your banking experience. Be it for security, receiving timely notifications or leveraging mobile banking services, it is a step worth taking. While the steps can vary depending on your bank, always refer to your bank’s official resources for accurate information.

Tata Capital, with its emphasis on customer convenience, provides a seamless digital experience for customers. Whether you need to link your mobile number, avail a loan or manage your investments, Tata Capital’s services ensure that you can manage your financial needs without any stress. Enjoy banking like never before with Tata Capital.

1. How do I link my mobile number to my bank account online?

To link your mobile number to your bank account online, log in to your bank’s internet banking portal or mobile app. Navigate to the profile or personal details section, find the option to update or link your mobile number, enter the number, and authenticate the change with an OTP sent to your registered mobile number.

2. How do I link my phone number to my bank?

To link your phone number to your bank, you can use the bank’s internet banking portal or mobile app, visit an ATM, or visit a branch in person. All you have to do is provide your new mobile number and authenticate the change using the OTP sent to the mobile number.

3. Is it necessary to link a mobile number with a bank account?

Linking your mobile number with your bank account is necessary for enhanced security and easy communication. Once linked, you can receive transaction alerts for online shopping, ATM withdrawals, fund transfers, OTPs for online transactions, and updates about your account.

It also facilitates easier communication with the bank and enables mobile banking services.

4. How do I check where my mobile number is linked?

A common way to find out if your mobile number is linked to your bank account is to visit the bank’s internet banking portal or mobile app. Go to the personal information section to check your mobile number’s link to your bank account. Alternatively, you can also call the bank’s customer service or visit the nearest branch to find out if your mobile number is linked to the account.

The outcome of elections in India significantly impacts the stock market. With the ruling party securing a majority, investors are closely watching how this will affect various sectors of the economy. Investors are constantly thinking about stocks to buy before results or a stock increase after results.

In this article, we will explore the potential beneficiary’s post-election and discuss which sectors or stocks investors should watch. But before we delve into that, let’s take a look at the immediate market reaction to the election results.

The Immediate Market Reaction

Following the announcement of the election results, there was a surge in market volatility. The Nifty fell by over 5% in a single day due to concerns about the coalition government’s impact on upcoming policies and plans. However, it quickly recovered and gained more than 3.5% in the next two days. This rebound suggests that investors have regained confidence in the market and are optimistic about the future.

Key Sectors to Watch

Following are the sectors to watch out for, which will be impacted due to the election results:

1. Solar Power

One sector that is expected to benefit from post-election policies is solar power. The government’s focus on renewable energy and electric vehicles makes solar power an attractive investment opportunity.

Initiatives like the Pradhan Mantri Kusum Yojana are expected to drive growth in rooftop solar installations. If one is thinking about stocks to buy before results, one can consider this sector.

2. Manufacturing

India’s manufacturing sector has gained momentum in recent years. Government initiatives like the Production Linked Incentive (PLI) scheme have attracted global attention and domestic investment.

Not only is India becoming a hub for electronics manufacturing, but it is also emerging as a global player in semiconductor production. There will be a stock increase after the manufacturing sector’s results.

3. Agriculture

The agricultural sector is another area that is expected to receive increased attention post-election. The government recognises the importance of investing in agriculture and rural infrastructure, especially after a year of low growth in this sector.

Logistics players are likely to benefit from the focus on agriculture infrastructure.

4. PSU Sector

PSU stocks have shown remarkable growth under the current government. Over the last four years, the market value of 52 stocks in the BSE PSU index has nearly quintupled.

In the past six months, all 27 PSU stocks in the Futures and Options (F&O) category have surpassed the Nifty index.

5. Real Estate

The real estate sector, while having faced some hurdles in recent times, presents promising prospects for growth and value. Certain are well-positioned to take advantage of these opportunities, making them particularly attractive investments.

These firms are expected to benefit from a combination of improving market conditions, increased urbanisation, and rising demand for both residential and commercial properties. Investors might find these companies’ stocks appealing due to their strong market presence and potential for significant returns.

6. Banks

In the banking sector, large private banks stand out as prime candidates for investment. They are anticipated to experience steady earnings growth and may see an upward re-rating of their valuations.

The banks boast a strong return on equity (ROE) and are expected to benefit from increased private sector capital expenditure (CAPEX). Their robust financial performance and positive outlook for economic recovery make them attractive options for investors seeking stable and potentially lucrative investments.

7. Automobiles

The automotive sector is showing signs of a resurgence, driven by a revival in consumer demand and supportive government policies. Leading companies are positioned to capitalise on this favourable environment.

Manufacturers are expected to benefit from increased vehicle sales and a broader economic recovery. As a result, they offer compelling investment opportunities for those looking to tap into the sector’s growth potential.

8. Metals and Mining

The metals and mining sector is experiencing a favourable global trend. Rising demand is driven by industrial recovery efforts, particularly in China, and supply constraints in key markets. This creates lucrative opportunities for investors.

Companies in this sector are poised to benefit from higher commodity prices and increased demand for raw materials. As such, investing in metals and mining stocks could yield substantial returns, making this sector an attractive option for those looking to diversify their portfolios and capitalise on global economic trends.

What Analysts Are Saying?

According to Fitch Ratings, the outlook for India remains positive, with a projected growth rate of 6.2% through FY2028. This indicates that the country’s economy is expected to continue its upward trajectory in the coming years.

Divestment plans may take a backseat as the government focuses on working with its allies. Due to political uncertainties, disinvestment receipts for FY2024 were significantly lower than the target. However, projects already approved by the cabinet will proceed as planned.

Other sectors like defence, hydrogen technology, domestic travel, and IT are also expected to witness growth in the upcoming years.

Analysts expect companies in low-cost housing, railways, agriculture, basic food, fertilisers, and agrochemicals to perform well in the next few weeks.

There’s also a focus on increasing defence production, boosting railways, and enhancing the banking sector. These areas have outperformed the main market index.

Additionally, the India Meteorological Department’s good monsoon forecast has increased confidence in the sugar, fertiliser, FMCG, and auto sectors. Higher rural incomes from good crop yields are expected to boost these companies’ profits in the latter half of the financial year.

Wrapping Up

As we look ahead to the future of India’s economy and stock market, it is clear that certain sectors will be in focus post-election, and you know which stocks to keep an eye on.

While it’s too early to predict the government’s next steps, monitoring the developments in infrastructure projects and policies will provide valuable insights for making informed investment decisions.

If you’re interested in exploring investment opportunities or need financial assistance for your business during this period of change, Tata Capital can help. Whether you require a loan against securities or funding for your new venture, Tata Capital offers a range of solutions to meet your needs.

Atal Innovation Mission (AIM), an initiative by the Government of India under the aegis of NITI Aayog, aims to encourage a culture of x and entrepreneurship across the country. Launched in 2016, it seeks to nurture innovation and research and development (R&D) in various sectors to address societal challenges and boost economic growth.

In this article, we discuss the objectives, various initiatives, and impact of this mission.

What are the objectives of the Atal Innovation Mission?

The objectives of the Atal Innovation scheme are:

1. Fostering innovation culture:

AIM aims to instil a culture of innovation and creativity among students, entrepreneurs, and educators by providing them with the necessary resources, mentorship, and guidance.

2. Promoting entrepreneurship:

One of the primary objectives of AIM is to promote entrepreneurship and startup culture in India. It provides support to aspiring entrepreneurs at every stage of their journey, from ideation to commercialisation.

3. Encouraging collaboration:

AIM fosters collaboration between academia, industry, and government organisations to facilitate knowledge exchange, technology transfer, and innovation-driven partnerships.

What are the initiatives under the Atal Innovation Mission scheme?

Some of the initiatives under AIM include:

1. AIM Ecosystem Development Program (AEDP):

This program involves collaboration and capacity-building among incubators, academia, industry, and government to strengthen India’s innovation ecosystem.

It includes projects with international collaborations (AIM-ICDK, AIM-UNCDF), renewable sources (AIM-iCREST), youth (Infinity) and women entrepreneurs, mentorship, and gender inclusivity (Her & Now), among others.

2. Atal Incubation Centres (AICs):

The ongoing round of ANIC focuses on 18 challenges spanning 5 sectors, including Agriculture (Millet), Post and Telegraph, Drinking Water and Sanitation, Renewable Energy and Clean-Tech, Education, and Women-Centric Challenges, along with an open innovation category.

Eligibility

1. Startups must be registered with AIC for more than three months.

2. Indian-registered enterprise, excluding Indian subsidiaries of MNCs.

3. Indian Promoter/Host Institution ownership ≥ 51%.

4. Focus on addressing India’s challenges.

5. Seed support covers prototyping, testing, mentoring, consultancy, IPR, and manpower, not capital equipment.

Funding

Aspect	Details
Maximum grant	Rs. 1 crore
Disbursement timeline	After one year of operations
Funding type	Grant, disbursed as debt, equity, or combination

3. Atal New India Challenges (ANIC):

ANIC is an initiative aimed at solving pressing problems faced by various sectors through innovation and technology. It invites innovators, startups, and MSMEs to develop innovative solutions to specific challenges identified by multiple ministries and departments.

Eligibility

1. Indian companies registered under the Companies Act 1956 and 2013, primarily MSME as per the MSMED Act.

2. Recognised startup by the Department for Promotion of Industry and International Trade (DPIIT), Ministry of Commerce and Industry, India.

3. Majority stake (over 51%) held in India.

4. Developed a working prototype relevant to the ANIC challenge.

Funding

Aspect	Details
Maximum amount	Up to Rs 1 crore
Disbursement timeline	12-18 months through the commercialisation stage
Funding type	Grant

The program targets bridging the “Commercialisation Valley of Death” by supporting testing, piloting, and market creation.

4. Atal Community Innovation Centres (ACICs):

ACICs are hubs for innovation at the grassroot level and community-driven problem-solving. These centres provide resources and support to individuals and communities to develop innovative solutions that address local challenges and improve livelihoods.

Eligibility

1. Minimum existence of three years

2. Mandatory documents for business loans.

3. Meeting minimum space requirement for the Innovation Centre.

4. Confirmation of matching funding commitment from partners.

Funding

Aspect	Details
Maximum Support from AIM	Rs 2.5 crore
Disbursement timeline	Five years
Funding type	Grant

Establishing a Public Private Partnership (PPP) model with Company Social Responsibility (CSR) funds or other sources is encouraged under the program.

5. Applied Research and Innovation for Small and Medium Enterprises (ARISE):

It aims to enhance the innovation capabilities of SMEs by providing support for research projects, technology adoption, and innovation-driven initiatives, thereby boosting their competitiveness and growth in the market.

Eligibility:

1. Startups: DPIIT-recognized startups.

2. Indian MSMEs: Companies under the Companies Act, categorised as MSMEs by the Ministry of MSMEs.

3. Majority stake in India: More than 51% stake must be held in India.

4. Partnership details: Startups partnering with MSMEs must provide relevant information.

Funding:

Aspect	Details
Funding Support	Maximum of Rs. 50 lakhs in three portions 40%, 30%, and 30%.
Disbursement timeline	1. Minimum tranche utilisation duration: 3 months 2. Maximum tranche utilisation duration: 6 months 3. Total allowed project time: 9 to 12 months
Funding type	Grant

Other initiatives include:

1. Atal Tinkering Labs (ATLs):

ATLs are dedicated innovation workspaces set up in schools to foster curiosity, creativity, and problem-solving skills among students. Equipped with state-of-the-art technology and tools, this Atal Innovation lab provides hands-on learning experiences in areas like robotics, 3D printing, electronics, and coding.

2. Mentor India Network:

AIM has established a Mentor India Network comprising experienced entrepreneurs, industry leaders, academicians, and professionals who mentor and guide aspiring entrepreneurs and innovators.

3. Vernacular Innovation Program:

The Vernacular Innovation Program promotes innovation and entrepreneurship in regional languages, aiming to empower diverse communities and bridge language barriers for inclusive growth.

What is the impact of the Atal Innovation Mission?

The Atal Innovation Mission (AIM) has had a significant impact on various fronts:

1. Empowering youth:

Provides support and resources to young innovators and entrepreneurs, enabling them to bring their ideas to life.

2. Promoting STEM education:

Advances STEM education through initiatives like ATLs, encouraging innovation and problem-solving among students.

3. Fostering entrepreneurship:

Accelerates startup growth with business loans, grants, mentorship, and incubation support, fuelling entrepreneurship and job creation.

4. Driving social impact:

Innovations from AIM address societal challenges in healthcare, agriculture, education, environment, and sanitation, creating positive change.

5. Building innovation ecosystem:

Strengthens India’s innovation ecosystem by facilitating collaboration, knowledge exchange, and platforms for innovation-driven entrepreneurship.

Final thoughts

The Atal Innovation Mission (AIM) empowers innovators and entrepreneurs by providing crucial support and resources. However, if you are looking for competitive business loan interest rates, consider Tata Capital as an alternative solution.

With flexible loan conditions, easy EMI payments, and expert guidance from our finance team, We are committed to fostering inclusivity and supporting the aspirations of all entrepreneurs, including women. Explore our business loans for women and unlock opportunities to turn ideas into reality.

PSU banks are an integral part of India’s banking sector. But what exactly are they? How do they function? And why are they important for the economy? In this article, we will answer all your burning questions about PSU banks and provide you with a comprehensive understanding of their role in India’s financial landscape.

What Are PSU Banks?

Public Sector Undertaking (PSU) banks are government-owned financial institutions where the majority stake (more than 50%) is held by the Ministry of Finance or State Ministry of Finance. These banks play a crucial role in fostering social welfare and economic development by providing affordable banking services to people across the country.

The government’s majority ownership ensures that PSU banks operate with the primary aim of public interest. They follow financial guidelines formulated by the government, which inspire trust among depositors that their money is safe and secure. Additionally, these banks charge lower fees compared to private banks, making them more accessible to a wider population.

12 PSU Banks in India

Currently, there are 12 PSU banks in India. Each bank has its headquarters located in different cities across the country. Let’s take a look at these banks along with their establishment year:

1. Bank of Baroda

2. Bank of India

3. Bank of Maharashtra

4. Central Bank of India

5. Canara Bank

6. Indian Bank

7. Indian Overseas Bank

8. Punjab National Bank

9. Punjab and Sind Bank

10. State Bank of India

11. Union Bank of India

12. UCO Bank

The presence of these 12 PSU banks ensures that banking services are accessible to people in both urban and rural areas across the country.

Small PSU Banks

Among the 12 PSU banks, some are considered small PSU banks due to their relatively smaller asset size and market capitalization compared to larger PSU banks like the State Bank of India. These small PSU banks play a vital role in providing banking services to specific regions or communities.

While the larger PSU banks have a nationwide presence, small PSU banks focus on serving a targeted customer base in localized areas. This allows them to cater to the unique financial needs of specific regions, thereby contributing to financial inclusion and economic growth at a local level.

Challenges Faced by PSU Banks

Like any other sector, PSU banks also face various challenges in their functioning. It’s important to understand these challenges to gain a holistic perspective on their operations and performance.

1. Financial Loss in Rural Branches

PSU banks have the responsibility to open branches in both urban and rural areas for financial inclusion. However, operating in rural areas can be challenging as these branches often face higher costs and lower business volumes compared to urban branches. This can lead to financial losses for these rural branches.

2. High Overdue Amounts

The government often waives loans for farmers and other economically backward sectors to support them financially. While this is done with good intentions, it can result in high overdue amounts for PSU banks as they have to bear the burden of unpaid loans.

3. Competition from Private Banks

Private sector banks with advanced infrastructure and customer service often attract customers away from PSU banks. The conventional banking methods followed by PSU banks may seem less attractive to the younger, tech-savvy generation who prefer the convenience and efficiency offered by private banks.

4. Non-Performing Assets (NPAs)

Non-Performing Assets, also known as bad loans, impact the profitability of PSU banks. Low asset growth and high loan write-offs can lead to a decline in their financial health. However, it is important to note that PSU banks have made significant improvements in managing NPAs over the years.

Understanding the Significance of PSU Banks

PSU banks play a critical role in India’s economy. They ensure financial inclusion by providing affordable banking services to people across different regions and economic strata. These banks are instrumental in implementing various government schemes aimed at uplifting marginalized sections of society.

Furthermore, PSU banks contribute to economic growth by providing credit facilities to businesses, supporting infrastructure development projects, and promoting entrepreneurship. Their presence in both urban and rural areas ensures that banking services reach every corner of the country.

Conclusion

In conclusion, PSU banks are government-owned financial institutions that play a pivotal role in India’s banking sector. They provide affordable banking services to individuals and businesses across the country while focusing on social welfare and economic development. Despite facing challenges such as financial losses in rural branches and competition from private sector banks, PSU banks continue to be an integral part of India’s financial system.

If you’re looking for reliable financial solutions tailored to your specific needs, Tata Capital can assist you with a range of products and services. Whether you need a personal loan, home loan, or investment opportunities, Tata Capital is committed to enabling your growth and financial empowerment.

In the recent updates to India’s tax regulations, there’s been a notable change that’s catching the attention of taxpayers: an income up to Rs 7 lakh, potentially not attracting any income tax. This article demystifies how the new tax rules make this possible and what you need to know to avail yourself of this benefit.

New tax slabs and rates

The new tax regime has introduced revised tax slabs and rates. The structure begins with zero tax for income up to Rs 3 lakh and scales up to higher percentages for larger income brackets.

This progressive system ensures that lower-income earners have a reduced tax liability, and for those earning up to Rs 7 lakh, the tax can be zeroed out with the help of rebates and deductions.

Income tax slabs (In Rs)	Tax Rate FY 2022-23 (%)	Tax Rate FY 2023-24 (%)
Between 0 and 2,50,000	0	–
Between 2,50,001 and 3,00,000	5	0
Between 3,00,001 and 5,00,000	5	5
Between 5,00,001 and 6,00,000	10	5
Between 6,00,001 and 7,50,000	10	10
Between 7,50,001 and 9,00,000	15	10
Between 9,00,001 and 10,00,000	15	15
Between 10,00,001 and 12,00,000	20	15
Between 12,00,001 and 12,50,000	20	20
Between 12,50,001 and 15,00,000	25	20
Above 15,00,001	30	30

Impact of the increased exemption limit

For the fiscal year 2023-24, if you choose the new tax regime, you are privy to a considerable advantage: How 7 lakh income is tax-free becomes a practical reality for you. The need to file an income tax return (ITR) becomes optional if your gross taxable income does not exceed the Rs 3 lakh mark.

Additionally, the enhanced basic exemption limit contributes to substantial tax savings. For instance, if your income falls between Rs 2.5 lakh and Rs 3 lakh, you now stand to gain more from the new tax regime compared to the old one, which retains the Rs 2.5 lakh exemption limit.

A significant update in the new tax regime is the uplifted rebate under section 87A. The rebate, previously set at Rs 12,500, has now been increased to Rs 25,000. This is a strategic move that directly benefits those opting for the new tax regime with a taxable income of Rs 7 lakh, as they now become eligible for this enhanced rebate.

For individuals who choose the new tax regime and have a taxable income up to Rs 7 lakh, there’s a substantial financial advantage: they are not required to pay any taxes at the time of filing their Income Tax Returns (ITR). The increase in the rebate under section 87A, which was previously applicable for incomes up to Rs 5 lakh, has now been extended to cover incomes up to Rs 7 lakh. Therefore, in the financial year 2023-24, when you file your ITR for the assessment year 2024-25 and select the new tax regime, if your taxable income does not exceed Rs 7 lakh, you will be exempt from paying taxes.

The new tax regime as the default

With the turn of the financial year on April 1, 2023, the new tax regime transitioned from optional to the default system. This implies that TDS from salary and the computation of income tax liability for returns will be based on this new structure, unless you consciously opt for the old regime.

The new tax framework was initially introduced in the 2020 Budget and was an optional choice until March 2023. Unless a taxpayer specifically chose otherwise, their tax computations were as per the old regime’s slabs and rates.

As we navigate through FY 2023-24, it’s essential to note the compulsory aspect of the new tax regime. You are mandated to specifically opt-out if you wish to adhere to the old system. In case the new regime doesn’t align with your financial strategy – perhaps due to the inability to claim prevalent deductions and exemptions like HRA and those under sections 80C, 80D, and so on – you retain the choice to revert to the old regime.

The roadmap to achieving a tax-free Income of Rs 7 Lakh

To navigate the new tax laws effectively, one must understand the roadmap to achieving a tax-free income of Rs 7 lakh:

1 – Assess your income: Understand your gross income and categorize it appropriately to determine your taxable income.

2 – Opt for the new tax regime: Elect to adopt the new tax regime when filing your returns. This regime offers the Rs 7 lakh exemption threshold.

3 – Maximise deductions: Make prudent investments and expenditures that qualify for deductions under the new regime.

4 – Utilize the rebate: Ensure that your taxable income falls within the Rs 7 lakh bracket to take full advantage of the Section 87A rebate.

5 – Filing your returns: Accurately file your income tax returns, claiming the rebate and deductions to reduce your taxable income to nil.

Conclusion: Navigating towards a tax-free income

The revised tax regime in India presents an opportunity for individuals earning up to Rs 7 lakh to reduce their tax liability significantly. The higher exemption limit, the introduction of the enhanced Section 87A rebate, and the restructured tax slabs all contribute to this possibility.

For those who are still navigating these changes or for anyone seeking to understand how to maximize their tax benefits, Tata Capital’s Moneyfy can provide tailored guidance. By carefully planning and understanding the new tax laws, taxpayers can not only comply with their tax obligations but also improve their financial well-being.

This journey to a tax-free income is not just about understanding the new laws but also about effectively applying them to your financial planning. With the right approach, an income of up to Rs 7 lakh can indeed be free from tax, and you can enjoy the benefits of your hard-earned money to its fullest.