Let’s take a look at some personal financial statements for calendar year 2021 that might impact you in the near future as well.

2021 has been a year of hope and financial recovery. After being affected by the second wave of the Covid-19 pandemic, people were looking for financial stability and to some extent their wish was granted. Among the many events that took place in 2021, we have listed a few that are crucial from a personal finance perspective for you.

Let’s take a look at some personal financial statements for calendar year 2021 that might impact you in the near future as well.

No increase in the pension rate

The year 2021 has started with a serious second wave of the Covid-19 pandemic. It was a financially difficult time for everyone. The RBI has helped the economy by keeping the REPO rate unchanged throughout the year. Interest rates on credit products have remained at historically low levels. Banks reduced their spread on credit products to attract new customers. The mortgage rate fell to 6.4% per year at the end of 2021.

However, the new year could see key rate hikes. Borrowers may have to pay higher EMIs if interest rates rise.

2021 Union budget reduction

Several measures were announced in the 2021 Union budget to help the population overcome the setbacks of Covid-19. The most important from a personal finance perspective include the latest date extension announcements for the u / s 80EEA tax benefit of the Income Tax Act until March 31, 2022. For individuals older than 75 years, a relaxation was allowed from the income tax filing, under certain conditions.

Potential buyers only have a few months left to buy their home if they want the u / s 80EEA advantage. If you are looking to buy your first home, an additional tax deduction can be an important factor that you may not want to ignore.

Equity IInvestment reaches new heights

Despite concerns about new waves of Covid-19, the stock market hit a new all-time high during the year 2021. The stock market remained bullish during the year with a few exceptions.

Investors who stayed invested and didn’t panic and shut down their SIPs were rewarded with good returns. The record number of people opening demat accounts in 2021 indicates that more and more people are participating in direct investments in stocks.

The new year can come with many surprises. Investors should remain cautious, remain diversified, make profits from time to time, and avoid investing more than their financial capacity.

FD rates have remained moderate

The interest rate on FDs remained broadly at the same level throughout the year. A major concern for most FD investors had been the high rate of inflation. The negative real rate of return has prompted many risk averse investors to seek alternatives to FD investments.

If you are a risk averse investor, you should avoid long term investment in FDs due to the current market situation as there is a possibility of rising interest rates in the near future. You can use the laddering method while investing in Fds.

Gold price and punching rule

The price of gold has remained mostly moderate during the year 2021. The price of gold has remained in the range of Rs 45000/10 grams to Rs 54000/10 grams during the year, while ‘at the end of the year it is quoted at around Rs 49,500 / 10 grams. . Gold is one of the best hedges against inflation, but the price of gold has remained within a range. Some experts believe that the price of gold is currently consolidating at the current level and may change one way or the other in the near future. If you are considering investing in gold, opt for SGB or Gold ETFs rather than physical gold to ensure greater security and easy handling.

The mandatory gold hallmark rule came into effect on June 16, 2021. Jewelers whose annual turnover exceeds Rs 40 lakh are required to sell only hallmarked gold jewelry.

BNPL has become a preferred spending tool

Suddenly Buy Now Pay Later (BNPL) has become one of the most popular credit instruments in the market. Several companies entered the BNPL business in 2021. Consumers struggling to manage their expenses after the Covid-19 setback used BNPL for financial relief.

BNPLs are advised to be used with caution. Before using it, check the interest charged by the lender and the maximum interest-free credit term offered. BNPL should only be used for essential purchases. Be careful not to get sucked into avoidable debt. BNPLs will continue to gain in popularity. So, on New Years, use them wisely.

Rise of cryptocurrency in India

Cryptocurrency has remained very volatile throughout 2021. There has been a reported huge spike in total cryptocurrency investment in India in 2021. The Indian government has indicated that it will introduce a project soon. of cryptocurrency law that will bring much-awaited clarity to investors in this area.

Until clarity kicks in, you should exercise caution when investing in cryptocurrencies. Unless there is a crypto law, any investment in it will be highly speculative and put you at risk of losing your money.

Direct Retail System

This program was launched by the Reserve Bank of India (RBI) in November to allow retail investors to buy and sell government bonds. This program is a unique solution to facilitate investment in government securities by individuals. Under this program, retail investors can open a gold securities account – “Retail Direct Gilt (RDG)” account with the RBI.

New RBI Direct Debit Rule

The RBI released new automatic debit rules in October and demanded that there be no automatic recurring payment for various services such as phone top-up, OTT bill payments, etc. The Additional Authentication Factor (AFA) has become mandatory for automatic debit of payment over Rs 5,000. . The financial institutions were mandated to inform by message 24 hours before the automatic debit and to authorize the debit once the customer has confirmed it.

New electronic filing system by income tax service

To simplify the income tax return, the Income Tax Department has launched its new website http: // www. Incometax.gov.in for electronic filing on June 7, 2021. The initiative has been taken to ensure homogeneous tax services to the country’s taxpayers.

Link your UAN with Aadhaar

The government has extended the deadline for linking your UAN to Aadhaar to December 31, 2021. It has been made mandatory for employees to receive various services and benefits from your EPF account.
Tax on FP contribution

The central government announced in its 2021 budget that interest earned on contributions to the PF Fund greater than Rs 2.5 lakh per year will be taxable income. However, this directive will apply to the employee’s contribution and not to the employer’s contribution.

KYC Video Directive

Due to the pandemic and the ease for customers, in May 2021, the RBI relaxed its KYC standards and announced that Video-KYC would be considered a full KYC for all new accounts. The decision was made to make it easier for banks to complete the KYC procedure. This is now used to open new accounts and to update the KYC of existing customers.

(The author is CEO, Bankbazaar.com)

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