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FAQ's

  1. Home
  2. FAQ's
  • Home Loan
  • Loan Against Property
  • Business Loan
  • Personal Loan
  • Loan Against Securities
  • Education Loan
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  • OD/CC/Working capital
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When can you apply for a loan?

You can apply for a Home Loan with any bank or housing finance company (HFC) even before you have finalized the property. The loan amount would be approved, based on your repayment capability. In all, every individual with capacity to pay can receive home loan from one bank or the other.

What are the loan tenure options?

Most of the banks and housing finance companies offer Home loan up to 30 years provided the term does not extend beyond 65 years of age or the retirement age, whichever is earlier.

How is the interest charged/ calculated?

Interest is calculated on monthly rest.

Who can be the co-applicants for the loan?

  • Your spouse
  • Any of your blood relative (immediate family members)
  • Co-owner has to be necessarily co-applicant in the loan.

What are the securities / collaterals you need to provide?

Immovable property owned by the applicants. The applicant's title to the property should be clear, marketable and free from any encumbrances. The security created on property shall be first and exclusive.

Can you get IT certificates in the name of both the applicant and co-applicant separately?

As per IT rules, only one certificate can be issued for a Home Loan hence one certificate will be issued in the name of both the applicant and co applicant.

What are the types of rate of interests available in the market?

Floating rate of Interest, Fixed rate of interest, Fixed + variable (initially fixed, later moved to variable)

How do I apply for the loan?

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our website www.buzzbt.com for more information.

For what purpose can you avail of Loan against Property?

You can avail of Loan against Property against Residential & Commercial Property for either your personal or business activities other than speculative or non prohibitive activities.

Who can avail a Loan against property?

Individuals:

  1. Salaried Individuals: Any individual who is in permanent service in any government undertaking or any reputed private sector company in India. 
  2. Professionals: Professionals i.e. allopathic doctors, architects, chartered accountants, cost accountants, practicing company secretary, management consultants and lawyers. 
  3. Self Employed: Individuals like traders, distributors, manufacturers, service providers etc. 

Non-Individual Entities:

  1. Proprietorship Firms
  2. Private Limited Companies
  3. Public Limited companies

How much finance can I avail against the property value?

The loan amount based on your repayment capacity. Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse’s income, assets, liabilities, stability and continuity of occupation and savings history.

For how long a period can I get loan?

Generally banks grant Loan against property from minimum 3 years to maximum 15 yrs. The term for the loan will be restricted to the retirement age or 60 yrs at loan maturity for salaried customers and 65 years for self employed customers.

Who can be co-applicant to the loan?

You can include your spouse as a co-applicant for the Loan. His / her income can be added to enhance the loan amount. However all co-owners of the property should necessarily be the co-applicant.

What security will I have to provide?

The security for the loan will be the first mortgage of the property to be financed, generally by way of deposit of title deeds and/or such other collateral security.

The title to the property should be clear, marketable and free from encumbrance which means that there should not be any existing mortgage, loan or litigation which is likely to affect the title to the property adversely.

How will the rate of interest calculated?

Interest is usually calculated on daily reducing balance, it means you pay only for the amount you use.

Do I have the option of pre-paying the entire loan amount?

Yes. Please check the individual banks policy. Nil foreclosure charges if loan is taken by the individual.

How do I repay the loan?

You can pay either by way for Electronic Clearing System (ECS) or by way of Postdated cheques (PDCs). Repayment by way of EMI commences from the month following the month in which you take full disbursement.

How do I apply for the loan?

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our website www.buzzbt.com for more information.

When to take Business Loan?

You can choose to borrow money to fund your business when:

  • The business needs liquidity for expansion
  • Mismatch in your cash inflows / outflow
  • Return on capital is higher than the loan interest

What are the types of business Loan?

  1. Professional Loans:
    1. Professional loans are extended to selfemployed professionals such as doctors, chartered accountants and lawyers, based on their individual credit history. 
    2. Trade Loans:
  2. Type of businesses that can apply for Trade Loans are:
    1. Sole Proprietorships
    2. Partnerships
    3. Private Limited Companies

What is the Eligibility Criteria for Business Loans?

Although it varies from bank to bank, the basic criteria are more or less the same, such as:

  • Business should have been:
    • Business continuity
    • Business profitability
    • Positive Net worth

What are the Factors contributing to the Amount of Business Loans?

  • Credit Rating or CIBIL Score of Individual Promoters or Proprietors or Directors
  • Cash Flow Status of the business in terms of cash credit history with outstanding payments, liabilities, etc. 
  • Type of business: Most businesses can be classified depending upon the nature of their business into Cyclical, Defensive or Growth company. It also depends upon the stage and maturity of the business.
  • Collateral is the easiest way to fund a loan as it becomes a secured loan as against an unsecured one without collateral.

What are the securities / collaterals you need to provide?

The collateral can be provided on a personal guarantee by the promoters of the company or the sole proprietor to avail the loan and the banks find it much easier to provide and sanction the same as it becomes a secured loan with collateral. Collaterals are most commonly seen as real property, business inventory, cash savings or deposits, vehicles and equipment. No security is required if it is an unsecured loan.

What are the loan tenure options?

Generally banks have minimum tenor of 12 months and maximum of 48 months.

What is the mode of repayment?

You can repay through either Postdated Cheques or ECS.

How do I apply for the loan?

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our website www.buzzbt.com for more information.

When can you apply for a personal loan?

Personal Loan is granted for marriage/medical treatment/ education/ foreign travel or any other general purpose except for any speculative activities.

What is the eligibility for applying personal Loan?

Salaried employees, pensioners of central/state government/armed forces, selfemployed businessmen and professionals with a regular source of income are eligible to avail Personal Loan.

What are the loan tenure options?

The loan can be repaid over a period of 12 to 60 months.

How is the interest charged/ calculated?

Floating rate of Interest

Fixed rate of interest

Fixed + variable (initially fixed, later moved to variable)

Do I have to provide any security, collateral or guarantors?

No security, collateral or guarantors are required for obtaining Personal Loans

How do I repay the loan?

Check-off facility or Postdated Cheques for the Repayment period given or Standing Instructions from the borrower’s salary / pension a/c with the Bank.

Can I prepay my loan?

Yes, you can prepay the entire loan outstanding. Please check the individual banks policy.

How do I apply for the loan?

Download our app buzzBT, book appointment with our solution manager, call us, chat with us. You can also visit our websitewww.buzzbt.com for more information.

What is Loan Against Securities?

Loan Against Securities is Loan Against Marketable Securities in which customer pledges his investment in favour of the lender and borrowfunds to meet his/her financial and personal requirement without selling the investments.

Loan against Securities can be availed for which purposes?

Loan Against Securities can be used for any personal and/or business purposes, which have to be declared at the time of borrowing

Would the Securities be held in borrowers name & What happens to Dividend and Bonus on those Securities?

The Securities will remain in borrowers name only. Borrower continues to benefits from Securities such as rights, dividends and bonuses even during the loan.

What is the maximum amount of loan limits one can avail?

An individual can avail a maximum limit of Rs.20 lakhs against the security of Securities / equity mutual funds. This limit is higher for other securities.

Is a personal guarantor a must?

Personal guarantor is not required.

What security will a borrower provide for such loan?

No additional security / collateral need to be provided, apart from the securities against which the loan is granted.

How will the rate of interest calculated?

In the overdraft account, interest will be charged only on the amount you draw and for the period that you draw. Interest will be charged on a daily basis, but will be debited to your account only once a month.

What are the loan tenure options?

Normally the tenure is for a year. At the end of the year, it will automatically be renewed for another year unless received intimation in writing from you not to do so.

How is the repayment schedule decided?

This depends on whether the loan has been structured as a demand loan or an overdraft facility. In the case of the former, there is a fixed repayment programme. With an overdraft arrangement, the drawing power is reduced over the tenor of the loan.

Can I prepay the loan?

You may prepay the loan, either partly or in full, at any stage, with no prepayment penalty

How do I apply for the loan?

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our websitewww.buzzbt.com for more information.

For what purpose education loan is given?

Education loan is given by banks and financial services companies to students along with their parents/relatives as co-borrower to finance their expenses for the purpose of studies.

What is a Credit Card?

Credit card is the convenient alternative of cash or cheque issued by banks and financial institutions, enabling the holder to make a payment or withdraw cash on credit. The due amount is paid as a lump sum within the due date or as monthly installments.

Why should I have a credit card?

Credit card can be used for shopping, dining, travel, buying tickets, paying bills etc.

Timely repayment of dues helps in building good credit score.

Credit card helps you in tracking your expenses and managing your finances

Credit card allows you to borrow money from the bank when in urgent need.

How does it differ from debit card?

The money that you pay using debit card is your own money taken out from your own bank account. The money that you pay via credit card is a kind of short term loan granted by the bank.

What are other things I can look forward to while buying a credit card?

Credit cards are not just limited to swipe-n-shop. You can also use them to borrow cash from the card provider. Credit cards comes with a Personal Identification Number (PIN) by which you can withdraw cash at ATMs and pay it back later in one go or in installments.

How do the bankers decide my credit limit?

The credit limit fixed on your card primarily depends on the type of card which in turn depends on your income bracket and credit score. While setting a credit limit, the banker looks out for card holder's ability and willingness to repay.

What are the types of credit cards?

Credit cards are usually of below types: Standard credit cards – These are plain credit cards with basic features and low interest rates. Specialized credit cards – Credit cards that are designed specifically for catering to specific needs. Such cards include credit cards for dining benefits, credit cards for fuel cost savings, credit cards for students and credit cards with travel privileges. Reward Points Cards – These are premium cards that offer reward points to the card holder for every purchase. The more you spend, the more reward points you get. These points can be redeemed against cash back, vouchers and gift coupons. Suggested for high end users.

How do I make a payment on my card?

The payment on your card can be made in several ways.

  • Pay in person at one of the card provider branches
  • Pay by cheque in favour of the credit card provider.
  • Pay via telebanking and internet banking facilities.
  • Auto debit / standing instructions: Due payments can also be made via automated banking wherein you authorise your bank to pay your outstanding bills and due payments on your behalf. This way you get free of remembering due dates.

How do I apply for the Credit Card?

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our website www.buzzbt.com for more information.

What is Factoring?

The Factoring Act, 2011 defines the ‘Factoring Business’ as “the business of acquisition of receivables of assignor by accepting assignment of such receivables or financing, whether by way of making loans or advances or in any other manner against the security interest over any receivables”.

Is credit facility extended by banks against security of receivable is termed as factoring?

No, credit facilities provided by banks in the ordinary course of business against security of receivables and any activity undertaken as a commission agent or otherwise for sale of agricultural produce or goods of any kind whatsoever and related activities are expressly excluded from the definition of Factoring.

Why should I use Factoring?

Delays in settlement of dues adversely affect the recycling of funds and business operations of the business units. It is, therefore, critical to ensure that the entities are able to raise liquidity against their receivables. Factoring provides liquidity to business units against their receivables and can be an alternative source of working capital.

What is recourse and non-recourse factoring?

In recourse factoring, in the event of buyer failing to pay on maturity, the seller has to pay back the advance obtained from the factor. In non-recourse factoring the factor provides finance with a credit guarantee for buyers and will bear the bad debt risk in case if financial inability of the buyer to pay.

How much advance can I get?

Advances are made as a percentage of invoice value, based on criteria such as quality of receivables, number and quality of the buyers and your requirements.

Would Factoring cause any unpleasantness between the seller and its buyers?

Recognizing the importance of the customer to the seller, normally banks / NBFCs extends every courtesy and consideration is given for seller's customers. Indirectly factoring helps the seller to avoid the embarrassment of having to directly seek payment from the buyers.

Do I have to provide any other security besides invoices in factoring?

Generally, you need not provide any additional security.

When do I get paid under factoring?

Banks offering factoring services decide on the percentage of the invoice to be paid upfront based on their own assessment of the credit worthiness of the assignor/ buyer, due diligence carried out by them and other commercial considerations.

Can I get advance on my invoices as well as fund from other traditional source at same time?

Yes, you can avail advances from your traditional sources of funding along with factoring services.

However, the advances are given on the debtors against whom you have not availed funding from any other financial institution. Please note that any given invoice cannot be double financed.

How is factoring advance repaid?

Automatically, when each invoice is eventually settled, buyers make payment to factors. In turn factor will pay the seller the balance after adjusting the advance, if any and outstanding charges. In some cases, banks / NBFCs allows seller to receive money on due date as its agent.

Is factoring similar to a bank loan?

No. Factoring is not a bank loan and you are not assuming any debt.

How do I apply for the factoring services?

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our website www.buzzbt.com for more information.

What is return of Income?

It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income.

What are the forms of return prescribed under the Income Tax Law?

Under the Income-tax Law, different forms of returns are prescribed for different classes of taxpayers. The forms of return prescribed under the Income-tax Law for filing of return of income for the assessment year 2015-16 (i.e., financial year 2014-15) are as follows (*):

  1. ITR – 1   Also known as SAHAJ is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses).
  2. ITR 2A   It is applicable to Individuals and Hindu Undivided Family (HUF) not having income from business or profession and capital gains and resident who do not hold foreign assets do not have foreign income.
  3. ITR – 2   It is applicable to an individual or a HUF having income from any source other than "Profits and gains of business or profession".
  4. ITR – 3   It is applicable to an individual or a HUF who is a partner in a firm and where income chargeable to tax under the head "Profits or gains of business or profession" does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.
  5. ITR - 4S Also known as SUGAM is applicable to individuals and HUF who have opted for the presumptive taxation scheme of section 44AD/44AE.
  6. ITR – 4   Its applicable to an individual or a HUF who is carrying on proprietary business or profession.
  7. ITR – 5   This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use this form (i.e., trusts, political parties, institutions, colleges, etc.)
  8. ITR – 6   It is applicable to a company, other than a company claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust).
  9. ITR – 7   It is applicable to a persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.).
  10. ITR – V   It is the acknowledgement of filing the return of income.

What are the different modes of filing the return of Income?

This Return Form can be filed with the Income-tax Department in any of the following ways, -

  1. by furnishing the return in a paper form;
  2. by furnishing the return electronically under digital signature;
  3. by transmitting the data in the return electronically under electronic verification code;
  4. by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;

For whom e-filing of return is mandatory?

  1. From the assessment year 2015-16 onwards any asessee filing ITR 1/2/2A (other than an individual of the age of 80 years or more at anytime during the previous year) having a refund claim in the return or having total income of more than Rs. 5,00,000.
  2. Every company.
  3. A firm or an individual or a HUF whose books of account are required to be audited under sec. 44AB.
  4. A resident assessee having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.
  5. Taxpayers claiming relief under section 90, 90A or 91.
  6. A person who is required to file ITR - 5.
  7. A taxpayer who is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)via), 10A, 10AA, 12A(1)(b), 44AB,44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW
  8. Return Form ITR- 3 
  9. Return Form ITR-4
  10. Return Form ITR – 7

What is the difference betweene-filing and e-payment?

E-payment is the process of electronic payment of tax (i.e., by net banking or SBI’s debit/credit card) and e-filing is the process of electronically furnishing of return of income. Using the e-payment and e-filing facility, the taxpayer can discharge his obligations of payment of tax and furnishing of return easily and quickly.

Will I be put to any disadvantage by filing my return?

No, on the contrary by not filing your return inspite of having taxable income, you will be liable to the penalty and prosecution provisions under the Income-tax Act.

What are the benefits of filing my return of Income?

Filing of return is your duty and earns for you the dignity of consciously contributing to the development of the nation. Apart from this, your income-tax returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits, etc.

What are the benefits of e-filing the return of Income?

E-filing can be done from any place at any time and it saves time and efforts. It is simple, easy and faster. The e-filed returns are generally processed faster as compared to returns filed manually.

What are the Due dates of filing of return of income/Loss?

  • Any company other than a company who is required to furnish a report in Form No. 3CEB under section 92E (i.e. other than covered in 2 below) 
    • September 30 of the assessment year
  • Any person (may be corporate/non-corporate) who is required to furnish a report in Form No. 3CEB under section 92E
    • November 30 of the assessment year
  • Any person (other than a company) whose accounts are to be audited under the Income-tax Law or under any other law
    • September 30 of the assessment year
  • A working partner of a firm whose accounts are required to be audited under this Act or under any other law.
    • September 30 of the assessment year
  • Any other assessee
    • July 31 of the assessment year.

The due date of filing the return of income for the financial year 2014-15 extended to 31stAugust 2015.

If I fail to furnish my return within the due date, will I fined or penalized?

Yes, if you have not furnished the return within the due date, you will have to pay interest on tax due. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F.

Can a return be filed after the due date?

Yes, if one could not file the return of income on or before the prescribed due date, then he can file a belated return. A belated return can be filed within a period of one year from the end of the assessment year or before completion of the assessment, whichever is earlier. Return filed after the prescribed due date is called as a belated return. A belated return attracts interest and penalty

If I have paid excess tax how will it be refunded to me?

Tax is refunded by Income tax department on processing of the return or after the completion of regular assessment.

Am I required to keep a copy of the return filed as proof and for how long?

Yes, since legal proceedings under the Income-tax Act can be initiated up to four or six years (as the case may be) prior to the current financial year, you must maintain such documents at least for this period. However, in certain cases the proceedings can be initiated even after 6 years, hence, it is advised to preserve the copy of return as long as possible. Further, after introduction of the e-filing facility, it is very easy and simple to maintain the copy of return of income.

There are various deductions that are not reflected in Form 16 issued by my employer. Can I claim them in my return?

Yes, it can be claimed if you are otherwise eligible to claim the same.

Why is return filing mandatory, even though all my taxes and interests have been paid and there is no refund due to me?

Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the Department by way of filing of the return of income. Only then the Government assumes rights over the taxes paid by you. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.

Am I liable for any criminal prosecution(arrest/imprisonment) if I don’t file my Income Tax return even though my income is taxable?

Non-payment of tax attracts interests, penalty and prosecution. The prosecution can lead to rigorous imprisonment from 3 months to 2 years (when the tax sought to be evaded exceeds Rs. 25,00,000 the punishment could be 6 months to 7 years).

Source

Income Tax website
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