A London based fintech company, RedGirraffe, is offering a facility to pay rent through credit card using its online platform “RentPay”.
Renu Yadav | New Delhi, June 15, 2017 | Business Today
Rent is generally one of the biggest component of the monthly expenditure that you make. Now, you can not only pay your rent through credit card but can also earn reward points on the amount paid. A London based fintech company, RedGirraffe, is offering a facility to pay rent through credit card using its online platform “RentPay”. For this, it has tied up with various banks including State Bank of India, ICICI Bank, HDFC Bank, IndusInd Bank, Axis Bank and Kotak Mahindra Bank. So, if you have a credit card from one of the banks that have collaborated with RedGirraffe, you can use it to pay rent.
How you can do it
To enroll for this facility you have to visit the website http://www.redgirraffe.com and create a RG Property ID by filling up the details of the rental property and attaching the rental agreement. The tenant will mention the bank account details of the landlord in the form. After submitting the form, a mail will be sent to the tenant’s mail id for giving standing instructions to the bank. After this one time registration, your monthly rent will be deducted automatically on a predetermined date.
“Bank and RedGirraffe.com have strong processes of inbuilt compliance and other tenant verification/reference checks. All the bank accounts remain automatically linked to Aadhaar and PAN details. In cases where the accounts are not linked, such customers are not allowed to transact via RentPay anyway. Apart from this level 1 verification mode, there are another 17 point checks (carried out between the bank and RedGirraffe.com) during each tenant onboarding. The verification happens over a period of 50 working days,” said Manoj Nair, Founder and CEO, RedGirafffe.com.
Why it is beneficial
The advantages of using this platform is you get 45-60 days of credit as your rent remains in your savings bank account and you earn returns on the amount. Also, if you use credit card, you can avail reward points depending on the offer that your bank is giving. “Since rent payments are typically large transactions, such spends enable customers to earn significant reward points. These points can be redeemed against the banks catalogue of over 200 options including products, gift vouchers, e-vouchers and air miles. Cardholders can even redeem points to pay their outstanding on the card,” adds Vijay Jasuja, CEO, SBI Cards. Apart from this it will also help the tenant build a good CIBIL score which can help him or her get loans at relatively better rates compared to a person with no or bad CIBIL score.
What are the charges?
A transaction fees of 0.39 per cent with a minimum of Rs 39 per transaction will be charged from the credit card holders of ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank and IndusInd Bank. Apart from this a service tax will be levied on it. So, for every Rs 10,000 rent paid the gross transaction fees including service tax comes to around Rs 45. However, in case of SBI Cards, an additional banking transaction charge of 1.75 per cent plus taxes shall be charged extra by the bank.
In some cases, the Income Tax Department may question the tax exemption taken on both HRA and home loan, says an expert.
Written by Surajit Dasgupta | Last Updated: October 10, 2016 10:36 (IST) | NDTV Profit
Income tax exemption on both HRA, repayment of home loan can be claimed
However, taxman could ‘closely monitor’ such a situation, says an expert
Income Tax Department may disallow one of the claims, he adds
Yes, you can claim income tax exemption on both house rent allowance (HRA) and repayment of home loan. If you are living in a house on rent and servicing home loan on another property – even if both the properties are located in the same city – you can claim tax benefit for both.
But “this situation could be closely monitored by the Income Tax Department particularly where the amounts are relatively higher and may also disallow one of the claims if sufficient explanations are not available”, says Amit Maheshwari, managing partner at Ashok Maheshwary & Associates LLP.
- Mr Maheshwari cites some cases when the tax department may not raise questions:
When the person may have moved from rented house to own house during the year or vice versa
- When the person’s own house could be smaller in size and the person may have moved to a bigger house rented by him/her
- When the children of the person may be studying in the locality of the rented house and during the year it was not possible for him/her to change the school and consequently he/she was not able to move to the new house bought
But in some other cases, the Income Tax Department may question the tax exemption taken on both HRA and home loan, Mr Maheshwari adds.
“Hence, in all such situations, the individual has to ensure that the related documentations (like lease deeds, possession/completion letters, etc.) and justification regarding the same are readily available with him/her if the such query is raised,” Mr Maheshwari says.
Salaried individuals who live on rent can claim HRA to lower taxes. It is partially exempted from taxes. However, if the individual does not live in a rented accommodation, HRA is fully taxable.
The deduction on HRA is the lowest of the following under Section 10(13A) of the Income Tax Act:
- Actual HRA received from the employer
- 50 per cent of (basic salary + dearness allowance) for those living in metro cities (40 per cent for non-metros)
- Actual rent paid less 10 per cent of salary
On the other hand, if you are servicing a home loan you can claim tax benefits on principal and interest payments. Principal repayment, under Section 80C of the Income Tax Act, is exempted up to Rs 1.5 lakh. And on interest repayment, exemption can be claimed up to Rs 2 lakh, under Section 24.
In this year’s Budget, the government had announced an extra deduction of Rs 50,000 on the interest component of home loan for first-time buyers, where the loan does not exceed Rs 35 lakh and the value of the property is up to Rs 50 lakh.
by Moiz Mannan | December 14, 2014 – 1:33:12 am | The Peninsula, Qatar
The continuing growth in financial investments of non-resident Indians (NRIs) in their home country shows not just the kind of faith they have in the Indian economy, but also that they are wise enough to keep all options open.
While it is prudent to save and invest a part of the foreign earnings in India, the NRIs also need to understand taxes so that they can make the most of their money. Those who have recently moved out of India need to be aware of the tax implications.
The income earned by NRIs abroad is not subject to tax in India, but they are liable to pay tax for any income that is earned or accrued in India. If any income from business transactions and also income generated from assets and investments in India crosses the basic exemption limit of Rs.200,000 they are required to file their returns. Unfortunately, the higher exemption limit for women and senior citizens who are resident do not apply to non-residents in these two categories.
Now, how and where can they possibly earn Rs.200,000 or more in India? Recent data show that the end of March 2014, NRI deposits in India were estimated at $104bn. Between June 2013 and June 2014, the NRI deposits in commercial banks in Kerala alone shot up by 24 percent.
Other than interest on deposits, the NRIs have also been buying commercial and housing property for the sake of investment. The rental income from property in India adds to their taxable income here. In this area too there is an apparent discrimination against NRIs. The rental income earned in India by non resident Indians are subject to tax withholding at the rate of 30 percent as opposed to 10 percent for resident Indians.
In case an NRI has only one property in India and it is vacant, a rental value cannot be attributed to the same. However, if he owns two properties and both are vacant, he has to pay income tax on one of the properties as if the same was rented. In case of more than one property, the NRI would also have to pay wealth tax at the rate of one per cent on the value if it is in excess of Rs.1.5 m.
Similarly, there is the issue of taxation on capital gains for those NRIs who have been booking profits from equity investments.
Thus, even middle income NRIs who have invested wisely and are enjoying recurring income rather than notional long term gains, face the prospect of being taxed. In such cases, income tax returns have to be filed if the income exceeds the taxable limit, or to claim refund if the tax deducted at source is more than the tax payable, or to claim the amount set off against capital losses.
The Indian authorities have been trying to make taxation simpler for NRIs. Already, interest earned by an NRI on the balance in an NRE account is exempt from income tax. The Income Tax Department last year lowered the limit to mandatorily e-file tax returns from Rs.1m to Rs.500,000.
In certain cases where investments are made in specified assets such as savings certificates, capital gains on transfer of foreign exchange assets is not charged. Incomes of NRIs are exempt from income tax interest on various specified securities or bonds.
NRIs who pay health insurance premium in India for dependents can claim a deduction under section 80D. Deductions under section 80G are also available to NRIs donating to an approved charitable institution.
Some short and long term capital gains from sale of investments or assets are taxed in the case of NRIs even if the total income is below the basic exemption limit. These include short term capital gains on equity shares and equity mutual funds where tax rate is 15 percent and long term capital gains on securities and assets where tax rate is either 20 percent or 10 percent without indexation.
Source : http://goo.gl/kaY6vv