What happens to the orphan bank account once the account holder dies?
Have you ever thought how your family members will be able to access and claim the money in the bank if something happens to you? Today we will discuss this aspect and see what exactly happens once a bank account holder dies and what are the steps to be taken by the family members.
Whenever there is a sudden demise in someone’s family, there is a panic attack. There is mourning of losing loved ones and chaos in the family for few weeks, but ultimately life comes back to normal later.
A few months later, family member start collecting all the financial data like life insurance policies, locker keys, investment details, loan details etc. etc. But the most important thing is the bank account. Bank account is the key to someone’s financial life and getting access to it is critical.
Here are the steps to claim the money in bank account.
Withdrawal from ATM Card
Before one moves to the actual process, we should first look at the obvious thing. Find out if you have the access to the ATM/Debit card and if you know the PIN. Just go and withdraw the money from the ATM if possible over next few days.
If for some reason you are not able to access the ATM/Card, then it’s time to follow the process.
Step#1 – Approach the bank & Meet the bank officials
You should approach the bank and meet the bank manager and share about the account holder death. Ask him/her the procedure to claim all the asset from the bank. If possible, show them the proof that the account holder has passed away (like death certificate)
Then the bank with immediate effect will make the deceased account in a dormant state (a state in which the there is no withdrawal possible). However, the deposits are still possible, because it may happen that few payments / dividends are going to be credited in coming days
Step #2 – Submit the documents
Case #1 – Single account holder
If the bank account was in single name, then the nominee approaches the bank with the death certificate of the account holder including his own authenticity proof. Then the procedure of transferring money to the nominee starts and the account remains in the dormant state for 6 months to 12 months (differs from bank to bank).
Here are the Required documents:
Application, stating that the account holder has passed away,
Notarized death certificate
FIR copy (if the deceased has passed in the accident and body is missing for some time )
Authentic photo id proof (such as adhaar card, pan card, driving license etc…)
Relationship with the deceased with proof,
Nominee KYC documents (photo, pan card, and adhaar card)
Some additional documents if there is no nominee in bank account
Incase nominee is not mentioned, then the bank needs clarity on who is the rightful owner of the money. For that, they might need a written WILL, which will mention clearly about the owner of the bank account money.
If WILL is missing, in that case, the bank can ask you to bring succession certificate from court, which will be the legal document certifying who is the actual owner of the money.
Case #2 – Joint account holder – If the 1st account holder has passed away then the 2nd account holder can inform the bank with the application stating the 1st account holder has passed away and also to make the 2nd holder the 1st holder so that he/she can have access to the money
Required documents –
Application stating the death of the 1st holder
Notarized death certificate of the 1st holder
FIR copy (if the 1st holder has passed in the accident and body is missing for some time)
Authentic photo id proof of the 2nd holder (such as Adhaar card, pan card, driving license, etc…)
What if there is a dispute among family members?
It may happen that there are many people in family, who claim to be the legal heir of the deceased. Even if nominee is mentioned in the account, still the legal heirs may be different from nominee.
In this case, one has to move to court and apply for succession certificate which we talked about before. It’s a document which will certify the legal heirs.
Make sure your family does not face any issues
How do you make sure that your family members do not have to go through the problems while claiming back the bank account? Here are few things you can do
Make sure your family knows the ATM PIN and net banking details
Convert the bank account in joint name, so that anyone can access the account
Make sure you mention a nominee among one of the legal heirs
Write a WILL and mention about the beneficiaries very clearly
Let us know if you liked the article? Leave your questions if any, in the comment section and I will try to reply to all the comments and doubts.
It is very easy to buy life insurance. You just pay the premium, attach some documents, get your health check-up done and you will become a policyholder. Even nowadays it has become more convenient to buy, as most of them can be bought online.
So, at the time of buying it’s really the fast process but, have you thought that how will your family get the claim settled after your demise? What all will be the steps that they need to take to receive the claim amount? It is important to have life insurance for your family’s financial security against the risk of your death but what’s more important is, that eventually its benefits must reach the beneficiary.
In this article, we will guide you on what all steps your family members will need to take to get your life insurance sum assured amount so that you can inform them about all the procedures and documents required to get assured life insurance sum.
What is Life Insurance?
Lets first see what does life insurance means by definition. So, “Life insurance is a contract between an insurance policyholder and an insurer (insurance company), where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person.” It means the main purpose is to provide a sum of money to the designated beneficiary (a nominee or legal heirs). So, now let’s see what does your beneficiary need to do to get the claim settled.
Claim settlement Form:
Firstly your family member has to get a claim settlement form from the insurance company and fill all the details. Along with the form he/she needs to attach all the documents along with the form. The list of all the documents required is given below:
Original Policy document
In the form, it is asked whether a claimant is a nominee or not? If not then the claimant needs to prove that he is a legal heir of the deceased by submitting the “Will” or if there is no will then it has to be proven by Succession laws.
If the claimant is a Nominee then Nominee ID proof establishing the relationship between nominee and person who died has to be provided.
Notarized death certificate of the policyholder (deceased)
In case the death happened in the hospital, document of hospital
Copy of claimant’s current address proof
In case of Accidental Death along with the above documents following are to be attached:
Hospital certificate
Post-mortem Report
FIR copy
Final report of police
Newspaper cutting if any
Driving license of the person if the death happened while driving due to the accident
In case of death outside India, was the deceased buried or cremated abroad? If yes, enclose a copy of the burial/ cremation permit.
It is very important to keep the acknowledgment slip mentioning all the documents which were submitted because it may be required for compliance of claim settlement.
Settlement of claim
As you now know how to claim, the next question will be how much time will it take to get the money? So, for this read the provisions on claim settlement provided by IRDAI.
As per the regulation 8 of the IRDAI (Policy holder’s Interest) Regulations, 2002, the insurer(company) is obligated to settle a claim within 30 days of receipt of all necessary documents including extra documents sought by the insurer. If the claim requires further investigation, the insurer needs to complete its procedures within 6 months from receiving the written intimation of the claim.
List of top 5 insurance company with death claim settlement ratio for the last 5 years – Below given table shows the claim settlement ratio of insurance companies. It is based on the individual death claim number published every year by IRDAI in its Annual Report. LIC tops the list of death claim settlement ratio for the last 5 years.
To give you a clearer picture, I have attached the screenshot of top 5 insurance companies during individual death claim settlement within 30 days of intimation.
Where to go if there is a dispute between the claimant and the insurer?
In many cases, life insurance claims have been delayed or denied due to a lack of proper documentation. So, make sure that your claim should not be denied due to this. And even after this claim settlement is delayed then there is a special court called Ombudsman of IRDAI (is a special court) where all claim-related disputes are solved. So if the claimant feels that they are being cheated or the claim is rejected despite submitting all the required documents then the claimant can approach the Ombudsman of IRDAI.
I hope now you are clear with the procedure to claim your settlement. Please feel free to comment about how fruitful this article was.
Most of the investors are not aware of how income tax is calculated and the basic understanding of tax related concepts when they start their career. In this guide, you will learn how to calculate income tax in a very simple and easy to understand way without involving any complicated jargons.
What is Income tax?
Income tax is a tax imposed by the government on the income of an individual in every financial year. To calculate your income, all the income sources like salary, business income, rent, dividends, etc are considered. Every citizen of the nation or even a non-residential individual also has to pay this tax to the government if he is earning any income in India.
The govt of any country has various kinds of expenses like paying pension to govt employees, building roads and infrastructure, start various schemes for the citizens benefit etc etc. For all this, they need money and income tax is one of the ways for the govt to earn the money.
The same money eventually is used to run the nation and its development. So when we pay the income tax, we get back various facilities like roads, public parks, and poor people also get various free services in health and education.
Every individual, who has yearly income more than a limit (current limit of 2018-19 is 2,50,000 per year) has to pay some part of their earning as tax to the Income-tax Department.
How to calculate income tax?
Calculating income tax is a little detailed, but simple procedure and it depends on 2 basic factors.
Taxable income
Age Slab
Let’s see the first factor i.e. taxable income.
What is taxable income?
Tax is paid on “Taxable Income” and not your full income. There is something called “Exemptions” and “Deductions” which are reduced from your income to arrive at “Taxable Income”. Formula to calculate taxable income is given below:
#1: What is Gross income?
Gross income is your total earning. It is the entire amount of your income without any deduction or exemptions. Gross income is not only your salaried income. It is the income you earn from all your earning sources.
For example: In one month, If you earn Rs.50,000 as salary, Rs 25,000 from your house rent and Rs.20,000 from your other business.
Then your gross monthly income will be : 50,000 + 25,000 + 20,000 = Rs. 95,000
There are various sources of income which are classified into 5 categories. The categories are called 5 heads of income.
5 heads of Income:
Each and every source of earning from where you are getting money is considered as your income. There are 5 main sources which are also called as 5 heads of income which are considered as the main income sources. These 5 heads are as bellow:
Let me tell about these sources in detail.
1. Income from salary
The first head is “Income from Salary”, so if you are a salaried employee, then your whole year salary has to be added, less exempt HRA and other perquisites (covered below in this article) which are allowed to be tax-exempt. So, this amount is to be shown under the head of the salary. It does not matter if you are a govt employee or work in the private sector.
2. Income from house property:
If you have a property and you have given it on rent, then all the rent earned in a year will be considered as your “Income from House Property”.
3. Income from profit or gains from business:
If you have your own business, then all the profits you generate from that business will be considered under this head. For example, if you have a shop, and your revenue is 5 lacs a year, but your expenses in shop is 3 lacs, then your profit is Rs 2 lacs. This 2 lacs will be considered as your income under this head.
4. Income from Capital Gains:
Capital assets can be simply defined as the property you own, which includes Stocks, mutual funds, real estate, gold, etc. So the profit you earn through the sale of these assets is considered as a capital gain and it will be taxable depending upon the class of asset from which capital gain occurred. For example gain on capital assets like equity stocks or equity mutual funds is taxable at 10% above Rs 1 lacs profits in a financial year.
5. Income from other sources:
The sources of income other than the above-mentioned classes are considered under 5th head of income. For example – the money you receive from any relative or friend as a gift above Rs 50,000 or any award prize or lottery you won, etc will come under this head.
Most of the people who are salaried will not have to deal with the other 4 heads of income for many years.
#2: What are deductions and exemptions?
Now let’s understand the very important concept of “deductions” and “exemptions”. These two things can be reduced from your gross income and your taxable income can come down, which will result in lower taxes
In this article, we have covered exemption available to salaried employees on receipt of allowances and perquisites from employer. Let’s see the examples of Tax Exemptions and deduction:
Tax Exemptions
“Exemptions” are some of the defined benefits or heads which can be deducted from income. A person spends on some of the necessities in life like paying rent, spending money on children’s fees, and basic living expenses. So some of the exemptions allowed are
HRA (house rent allowance)
Standard Deduction of Rs 50,000 per year
Children Education Allowance + Hostel Allowance
LTA (Leave travel allowance)
Let’s understand these 3 things.
Exemption #1 – House Rent Allowance (HRA)
If you are receiving HRA as part of your salary and also pay rent for residential accommodation then you can claim the HRA paid to you as exempt from tax subject to certain limits and restrictions. These are as follows:
Minimum of the following HRA is exempt from tax –
(i) Actual HRA received
(ii) 50% of annual salary* if living in metro cities or else 40%
(iii) Actual Rent paid less 10% of Basic + DA
Exemption #2 – Standard Deduction of Rs 50,000
Once can directly deduct a standard deduction of Rs 50,000 and bring down their income by that margin. Before Financial Year 2018-19, there was a deduction available for Travel Allowance (Rs 19,200) and Medical expenses (Rs 15,000) when you produced the bills, but now there is no requirement of producing any proof of expenses. One can directly take the benefit of Rs 50,000 standard deduction (for FY 2018-19, this was Rs 40,000, but later it was increased to Rs 50,000)
Exemption #3 – Children Education Allowance + Hostel Allowance
If you are receiving children education allowance or hostel allowance from your employer then you are eligible to claim a tax exemption under the Income Tax Act. However, here are the limits for these two exemptions
Children’s Education Allowance: INR 100 per month per child up to a maximum of 2 children.
Hostel Expenditure Allowance: INR 300 per month per child up to a maximum of 2 children.
Exemption #4 – LTA (Leave Travel Allowance)
A lot of employers give an allowance to employees for traveling on leave dates. An employee may travel for his holidays or vacations (alone or family) and will incur some expenses related to that. So this allowance is given for that on producing the bills and on doing the actual travel by taking leaves.
The actual rules for LTA are quite detailed, hence we are not covering it here in this article. Right now you just need to know that the employer can define the LTA allowance limit like Rs 50,000 (for example), so that employee can do travel expenses upto that limit twice in a block of 4 yrs and claim this exemption.
Tax Deductions
There are various deductions that are available under different sections of the income tax act. This deduction is against amounts that you have invested in some specific products like Insurance, ELSS, or ULIP and it also considers specific types of expenses that you incurred during a financial year like Principal repayment of loan, donations or health insurance premiums, etc.
Here is the table given below in which you can see various sections covered under section 80 (from 80C, 80D up to 80U), their meaning, maximum limit of deductions and who can avail the benefit of these deductions.
So from this example we got Rs.10,00,000 as a taxable income of that person.
You must have got an idea of calculating taxable income. So now let’s move toward calculating income tax applied on that taxable income.
The second factor essential for income tax calculation is your age. According to the age groups, there are three tax slabs and each tax slab has different tax rates. See below these three tax slabs and yours.
1) Tax slab below 60 years of age group:
In this group comes the youngsters both men and women having age below 60 years. Individuals in this group have to pay more tax than the other groups. Here the tax rate is highest among all three groups. See the table below to understand the tax rate –
2) Tax slab between 60 to 80 years of age:
This is the group of individuals most of whom are already retired. In this group tax charges are different i.e. lower than the first group. The percentage of tax is given below.
3) Tax slab above 80 years of age:
This is the last and most aged tax payer’s slab. The tax rates are lower here than the other two groups. The percentage of tax is given in the following table.
Income tax calculation
Let’s take the same above example of taxable income of Rs 10 lacs and considering this person in 1st tax slab, his income tax can be calculated as follows.
Income upto Rs.2,50,000 is tax free.
(between Rs. 2,50,001 to 5,00,000) 5% tax = 5% of Rs. 2,50,000 = Rs.12,500
(between Rs 5,00,001 to 10,00,000) 20% tax that means 10,00,000 – 500000 = 5,00,000
The GIF given below will explain you complete tax calculation:
If the person is earning more than 10 lacs, than on the amount above Rs 10,00,000, it will be taxed at 30%.
What is TDS?
When you earn an income beyond a specified limit, the govt has mandated the person paying you the income to deduct one part of it as your advance tax on your behalf is called TDS. If you look at its full form its Tax deducted at SOURCE (whoever is paying it).
If you want to find out all the TDS deducted for you at one place, there is a form called form 26AS which can be downloaded from TRACES website. You can claim the TDS amount against the total tax payable by you. Incase your TDS amount is more than the tax payable, you can apply for the tax refund when you file your ITR.
Various ITR forms
After paying the income tax, one also has to file the IT return which is to declare your income earned from various sources, tax paid in advance, your TDS deducted in the financial year. It is also useful for claiming income tax refund.
There are different ITR forms for each class of individual i.e. salaried, or business/professional individual. Following is a brief classification of ITR forms –
ITR 1 or Sahaj :
This form is for an individual (Resident) earning less than Rs. 50 Lakhs in a financial year under heads of Salary or pension, one house property, Other sources (excluding winning from Lottery and Income from Race Horses) and agricultural income less than Rs. 5000 in F.Y.
ITR 2 :
This form is for HUF and an individual (including non-resident/resident not ordinarily resident) who is earning more than Rs. 50 lakhs under head of Salary, House property, Other Sources (including Winning from Lottery and Income from Race Horses), agricultural income more than Rs. 5000 in F.Y. and also capital gains.
ITR 3 :
This form is used by HUF and resident individuals who have income under the head of Profit & Gains from business or profession. This return may also include income from house property, salary/pension and income from other sources.
ITR 4 :
This return form is to be used by an individual or HUF, who is resident other than not ordinarily resident, or a Firm (other than LLP) which is resident, whose total income for the assessment year 2019-20 does not exceed Rs.50 lakh and who has income computed on presumptive basis under section 44AD or 44AE or 44ADA.
Conclusion
In this article, we tried to cover various income tax-related concept in nutshell, I hope it was beneficial for those who had no idea about it. We will try to cover this information in detail in various other articles dedicated to individual topics. Please ask your questions in the comments section so that we can answer those.
Do you know where was your aadhaar number used for various purposes in the past?
Aadhaar has now become a central part of our life and it’s integrated with so many services. You have your critical information linked to aadhaar, and if you allow a service to authentic yourself using aadhaar number, it fetches your data and uses it.
While it has made life easy and simple, it also opens up to the chances of data leak and someone else using your aadhaar to authenticate for some service.
UIDAI has come up with a service where you can check Aadhaar Authentication History online. Below is a quick video which shows you how you can do it.
The main objective or purpose of this authentication process is to verify the identity of a person and to avoid the fraudulent cases. It helps the service provider to identify whether the person who is requesting for the service is trustworthy or not.
How does the process of authentication work?
When you submit your Aadhaar card at anywhere as an identity proof, that service provider asks you either to submit a copy of your Aadhaar card or sometimes he may ask for your bio-metric details like fingerprint or IRIS.
These details are then submitted to the CIDR of UIDAI i.e. Aadhaar verification department. This request can be initiated through any devise like laptops/desktops or mobiles. CIDR then cross checks this information with the details on UIDAI.
If your details match then the service provider will approve your request.
Aadhaar authentication can be done on the basis of 3 means –
Bio-metric details – Finger print and IRIS
Demographic details – Name, age, gender, DOB etc.
One time password – on registered mobile number
Any service provider where you submit your Aadhaar card as an ID proof can request CIDR for this authentication.
4 steps to check your UIDAI authentication history?
Let’s see these steps briefly –
Step #1: Go to the website of UIDAI or you can click here, and then click on “Aadhaar authentication history”
Step #2 – Enter your Aadhaar number and security code and click on generate OTP.
Step #3 – Now select the type of authentication history which you want to check. Then select the time period and how many entries you want to check (You can select maximum 50 entries). Finally enter the OTP you received on your registered mobile number after step 2 and click on submit.
Step #4 – This is the last step of this process where you can see the list of all the entries of authentication process.
Do let us know if you liked this information and if it helped you !
As per IRDAI, the insurance regulator – it is now mandatory to link your Aadhaar and PAN number with your insurance policies. Though this linking process does not have a deadline right now, its advised to act fast and complete this action asap to avoid any last minute rush and issues which you might face at the time of renewal or claims.
Note, that those investors who still don’t have PAN , have an option to submit form 60.
How to link Aadhaar & PAN in your LIC policy?
If you have any existing life or health insurance policies, you should link your Aadhaar and PAN soon.
As most of the investors have LIC policies, I am covering the online and offline process for LIC policies right now in this article and will give the links to update the Aadhaar for some other companies as well.
Online Process for updating Adhaar in LIC policies
If you want to update your Aadhaar in your LIC or any insurance policy, the first criteria is that your active mobile number should be linked to your Aadhaar number, so that you can generate OTP which is necessary for the registration process.
and then click on generate OTP. Here is how it looks like.
Step #3: You will get an OTP on your mobile, which you need to enter on the site and click on submit. You will see the massage of successful registration for Aadhaar linking with LIC.
It might take few days to link your Aadhaar number with your Policy. Once this linking process is completed after verifying your details from UIDAI, you will be informed via SMS/e-mail on your registered mobile number or mail-ID. You can also watch this video to know the process.
Online Process for updating Aadhaar in LIC policies
You can also have an option to visit your LIC branch and fill up the offline form to link your adhaar and PAN with your policy. Make sure to take an acknowledgement letter once you complete the process.
How to link your Aadhaar and PAN with non-LIC policies?
Each and every insurance company has implemented the solution of linking Aadhaar with policies and you will find a dedicated page on their website. Just search for “Aadhaar + PAN + Linking + <<enter Insurance company>>” in google and you will surely get the link for completing the Aadhaar linking process.
However we are putting up a small list of some insurance companies and their respective links to make it easy for you.
Note that this takes just 1-2 minutes of your time, but its an important thing to complete. If you still have any doubt regarding this linking process you can leave your query in the comment section.
Now it has become much easier to transfer your EPF accounts while changing jobs. You no longer have to file separate EPF transfer claims using Form-13 after changing jobs. It will now be done automatically. EPFO has introduced a new composite form called Form 11 that will replace Form 13 in all cases of auto transfer.
In this article I will tell you the process of transferring your EPF account in case you are changing your job.
EPFO i.e. Employee’s Provident Fund Organization has introduced the online portal to transfer your EPF account from one employer to another employer.
How to transfer EPF online automatically in case you change your job?
Old Process –
Earlier, transferring EPF account from one employer to another employer was quite a hassle for an employee for which employees needed to wait for a prolonged time period. As per the old process, one had to complete the process only through offline mode which resulted in various problems like misplacing your documents, taking a long time to get the claim approved and a communication gap which had proved as a major problem.
New EPF composite form 11 –
Form 11 is a composite declaration form, which includes all the basic details of the employee such as Name, registered mobile number, bank account number, PAN number, date of birth, date of joining, etc.
From now on, employees have to fill only form 11 to his employer at the time of changing his job, and his EPF account will be transferred to his new employer automatically. But for this process employee’s UAN must be linked with his Aadhaar number, so that the employer can verify employee’s details and e-KYC.
The introduction of this new online portal has saved lots of effort from every employee and made this process a lot easier.
Let’s see the process of how to transfer EPF online.
Online mode of transferring EPF Account:
Here in this process, I have classified all the steps into 3 categories according to the work done by employee, employer, and EPFO. Now let’s see the steps –
What employee has to do –
Fill form 11 – providing all your details.
Provide all the details regarding your previous job.
Sign and submit this form to a new employer.
What employer has to do then –
Get the form filled by the employee and check the details entered.
First, enter all the details of the employee and then upload form 11.
Further process –
The employee will get an SMS on his registered mobile number to inform him that his auto-transfer request is in process.
Once the process of transferring the account is completed, the employee will be informed via SMS or e-mail ID register with UAN.
The process will be completed unless –
Employee stops it in between
The new employer deposits his 1st contribution
Watch this video to know how to merge EPF account from one company to another company:
Let us know if you understood the process? Have you tried doing this?
Do you know anything about gratuity? It is one of the components of your salaried income which you will get at the time of your retirement. A lot of people are not even aware of the term gratuity and tax exemption on this amount.
In this article, I’m going to tell you what is a gratuity, how it is calculated and how much tax exemption you can get on this amount.
Recently limit of gratuity payment has been increased from Rs.10 lac to Rs.20 lac. This hike is a kind of good news for employees who are working in the non-government sector for more than 5 years in the same company.
First of all, let me tell you what is a gratuity.
Meaning of Gratuity
Gratuity is the reward given in the form of money by an employer to his employee for being loyal to the company and completing 5 or more than 5 years of service in the same company.
Various countries have different gratuity limit. In India, this limit was Rs.10 Lac earlier but after implementation of the 7th pay increment of salary this limit has been increased from Rs.10 lac to Rs.20 lac.
Mode of Gratuity payment:
Just like your provident fund gratuity is also paid totally by the employer only. It depends on the employer’s decision that either he will pay you this amount or he may take a group gratuity plan with an insurance company. The employee can also contribute to his gratuity if it is paid through insurance company whereas it is not mandatory.
How gratuity is calculated?
Once you complete 5 years of your service, gratuity will be calculated for 15 days per year of your employment. The total working days considered are 26. It will calculated the number of years of your employment.
While considering years of service if the time period is more than 6 months then it will be considered as 1 year. For example, if your service period is 5 years and 7 months then for gratuity calculation it will be taken as 6 years.
Below are the terms taken into consideration while calculating gratuity:
Last drawn salary including basic pay and dearness allowance.
No. of years of your employment.
Paid for 15 days per year of employment considering working days as 26.
The formula for calculating gratuity is given below.
Let’s take an example of gratuity calculation.
Suppose you are working with a company from the last 5 years and 7 months and your salary is Rs.50,000 including DA. Then your Gratuity will be –
= 50000*6*15/26
= Rs.1,73,076.9
At what time gratuity is given?
Gratuity is a kind of superannuation. When a person completes 5 or more years of his service in the same company then he is eligible to get gratuity.
The criteria for gratuity payment is given below.
Retirement of employee
When an employee resigns the job after completing 5 years.
In case of death or permanent disability because of an accident.
The criteria of completing 5 years of employment will be relaxed in case of death or permanent disability caused due to an accident. In this case, the employer will pay gratuity for 15/26 days of every completed year of service.
Companies are supposed to pay Gratuity?
The gratuity act was originally passed in 1972. This act covers all the workers or employee’s in various companies, factories, mines, etc. As per this act, all the companies who have at least 10 employee’s have to pay gratuity.
If a company has 10 employee’s though for a single day in a period of 12 months then the company is eligible for paying gratuity.
Who is eligible to get Gratuity?
There are 3 criteria’s for an employee to become eligible for Gratuity which is as:
The employee should retire after completing 5 years of service in the same company.
Employee must resign after 5 years of service in the same company.
In case the Employee passed away or suffers from any kind of deficiency while he was still working.
Whereas as per the rule under section 4(2), 5 years doesn’t mean 365 days/ year. As per this rule, an employee who satisfies the criteria given below is eligible for Gratuity, the criteria are as –
The employee should work 240 days a year – if the company has 6 working days.
The employee should work 190 days a year – if the company has 5 working days
This rule is will not be applicable if the employee dies or becomes disable while he is still working. In that case, the company will provide Gratuity to such employee or the nominee.
Is gratuity Amount Taxable?
In the current situation all the government employee has a tax benefit on their gratuity. There will be no tax on the amount received as gratuity for government employees for state government, central government or a local authority.
For non-government i.e. private sector or public sector employee’s tax exemption is depending upon either the employer company is covered under gratuity act or not.
1. Employer covered under payment of gratuity act:
When a person is working in a private sector and his employer company is covered under gratuity act then he can get tax exemption on his half months salary i.e 15 days salary of every year of his employment.
2. Employer not covered under the payment of gratuity act:
When your employer company is not covered under the gratuity act then you can get tax exemption on any one of the three options given below. Whichever is less will be considered for exemption –
Rs.20,00,000
Actual gratuity received by an employee.
15 days salary of every year of employment.
[CP_CALCULATED_FIELDS id=”6″]
Change in taxable income because of hike in gratuity limit:
Hike in gratuity limit is more beneficiary for employee’s working in private or public sectors. In any case, government employees are getting tax exemption on the entire amount of gratuity payment.Let’s see the difference in tax exemption after this hike in the gratuity limit.
I hope you got an idea of calculating gratuity and tax exemption on it. If you have any query let us know by leaving your reply in the comment section.
Aadhaar card is becoming the most important documents for any individual in India. Isn’t it very critical to secure crucial details from hackers who might try to steal your data? Some months back, even MS Dhoni’s Aadhaar data was leaked.
So today we will talk on how you can secure your Aadhaar card bio-metric details and prevent others to access your data, and also how to unlock it back later.
Why unlock your Aadhaar card details?
At the time of applying for Aadhaar card, you gave your photo, fingerprints and iris details (eye scan) which is called biometric details.
Nowadays, every organization like phone companies, financial organizations have come up with the concept of e-KYC, where they will just enter your 12 digit Aadhaar number into their Aadhaar-based authentication system instead of asking for all your details when you want to open an account, and it will access all your information like name, date of birth, address etc. from the Aadhaar database.
Details of information captured in Aadhaar:
Photo
Signature
Full name
Address
Mobile number
Date of birth
Education
Bio-metric
Bank details etc.
If you lock your bio-metric details then no one will have the authority to use it without your permission. Not even any government institution. If you want to perform e-KYC then you can unlock it for 10 minutes, after that it will lock again automatically.
This locking and unlocking can be done only through online and your mobile number or mail ID must be registered in your Aadhaar.
Enter your Aadhaar number and security code and click on Send OTP
Enter the OTP received.
Now if you want to unlock your details for temporary then click on “Unlock It”.
And if you want to Unlock your details permanently then uncheck the checkbox of “Lock” and click on “Disable Locking”
Why do we need to safeguard our Aadhaar details?
It is of utmost importance to secure yourAadhaar card details. Let us know why we need to secure our Aadhaar details.
As we all know that Aadhaar card is becoming the Unique identification and in future every legal procedure will be Aadhaar verified. This means that if someone has your Aadhaar details then he/she can take advantage of your details and misuse your Aadhaar card.
Various companies have taken contracts of issuing Aadhaar cards. So they had taken the biometric details of every person who enrolled for Aadhaar card through these companies. Now as these companies have your details there is a possibility that they may misuse these details for their own purpose.
The experts have said that the details provided in the Aadhaar card should be secured so that no one can take advantage of any other person’s personal details.
This newly introduced safety feature can help you to secure your details and only you have the authority to unlock the details whenever you wanted. No other person, company or bank has permission to use these details without your permission.
For this, your registered mobile number must be in use because the OTP required will be sent on the registered number.
You can click on this video given below to see the feature.
What if I happen if my mobile number or E-mail ID is not registered?
As per our conversation with the Aadhaar customer care executive on their contact No. 1947, if you don’t have your registered mobile number or E-mail ID in use, you cannot go further for the online procedure to update or Lock/Unlock your details.
In that case, you have to visit the Aadhaar center with the Xerox copy of your Aadhaar, fill the required details and submit it.
To search the nearby Aadhaar center you can visit this link. Or you can download & fill the form by yourself, attach the copy of your Aadhaar and send it by post on the address given on the form.
After the launch of the BHIM and TEZ app, the government of India has now launched a new multi-channel platform which is known as Umang App. This move has been taken by the GOI to unite all the government services and schemes in one place and make it more convenient for all the citizens to take the benefit of these services.
What is UMANG APP?
Umang (Unified Mobile Application for New-age Governance) is an all-in-one mobile app that has 1200 services including state and central government. It is a multi-channel platform that is absolutely free for everyone. This app will reduce your efforts of going to the regional government offices. It will also save you precious time and energy.
How to register for the Umang app?
Downloading and registering for the Umang app is as easy as downloading other apps from the Google Play Store and the iPhone app store. It can be completed with a few simple steps. Let me tell you how?
Download the Umang app from your mobiles Play store
Select preferred language and click on terms and conditions
Click on register (if you don’t have login id and password) and proceed by entering your mobile number (make sure that you have this number in front of you because you will receive an OTP)
Enter that OTP and proceed to set MPIN.
Now enter all the other details like your name and all and click on submit.
Once you save all the data then you get confirmation at your registered mobile number .It also says if you have not updated your details then you can give missed call at this number- “1800-11-5246.”
That’s it. With these simple steps, you will be registered with the Umang app. If you enter your Aadhaar number, it may use your Aadhaar number for E-KYC purpose and your data linked with your Aadhaar will be automatically linked with the Umang profile. You don’t need to provide any other details for the registration process.
Watch this video to know about all the features of Umang app :
Many of our investors, when we ask them about their accumulated balance in their Provident fund account or pension fund, they don’t have any idea about the same. So for all those investors, Umang app is very useful to get to know the balance of all their investments in EPF/PPF, or other government schemes, on just a few clicks. So, in this article, we have focused on how to check EPF balance. By following the same process you can get to know about other government schemes balance.
What is EPFO?
EPFO (Employee Provident Fund Organization) assists the Central Board in administering a compulsory contributory Provident Fund Scheme, a Pension Scheme and an Insurance Scheme for the workforce engaged in the organized sector in India.
How to check EPF balance and view passbook on the Umang app?
Step#1– Open the Umang app and click on to EPFO :
Once you click on the Umang app and click EFPO. After you click EFPO the below window opens. Then click on to employee-centric services to know your EPF balance.
Step#2 – Click on to view passbook :
After clicking on to employee-centric services, below window appears. Now click on to view passbook and wait.
Step#3 – Login :
After you click on to view passbook now you will have to log in. For login, you need UAN (Universal Account Number) allotted by the EPFO to every employee that contributes to PF. You can ask your employer for your UAN number. Once you enter UAN number, you will have to click on get OTP. You will receive OTP on your registered mobile number. Put the OTP and log in.
Please note – If you leave your current job and move to another job then your UAN number will not change. This UAN number will be with you forever.
Step#4 – Again click on to view passbook :
After you log in the below window appears. You will have to click on view passbook and
Step#5 – Details of your EPF balance :
After you click on to view passbook the below window will appear which will show you the entire EPF balance created during your employment with various employers. You can open each of the links that are mentioned employee wise to see complete details of the deposit made towards PF.
List of other services available on UMANG APP:
Central Services :
AICTE ( All India Council for Technical Education)
Aadhaar Card
Bharat Bill Pay
Bharat Gas (BPCL)
Buyer Seller – mKisan (Sell product to Better Price)
CBSE (Central Board of Secondary Education)
CHILDLINE 1098 (Night and Day)
CISF (Ministry of Home Affairs, Govt.of India)
CPGRAMS (Centralized Public Grievance Redress and Monitoring System (My Grievance)
Crop Insurance (Department of Agriculture, Cooperation and Farmers Welfare)
CRPF (Central Reserve Police Force)
DAY – NULM (Deendayal Upadhyay Antyodaya Yojana National Urban livelihood Mission)
Digi Sevak (Digital India Volunteer Management System)
Directorate of Marketing & Inspection (Department of Agriculture, Cooperation and Farmers welfare)
e-RaktKosh (A Centralised Blood Bank Management System)
eMigrate (Ministry of External Welfare)
ePashuhaat (GPMS Transportal)
ePathshala (National Council of Educational Research and Training)
EPFO (Employees’ Provident Fund Organisation)
eRahi Sukhad Yatra (National Highways Authority of India)
ESIC – Chinta Se Mukti (Employees’ State Insurance Corporation)
Extensions Reforms Monitoring System (Ministry of Agriculture and Farmer Welfare)
Farm Mechanisation (Ministry of Agriculture and farmer Welfare)
Goods & Service Tax Network ( Ministry of Finance)
HP GAS
INDANE GAS (Indian Oil Corporation Limited)
Kendriya Vidyalaya Sangathan
Khoya Paya (Citizen’s Corner of Track Child)
Kisan Suvidha (Ministry of Agriculture and Farmer Welfare)
MADAD (Ministry of External Affairs, Government of India)
Ministry of Petroleum & Natural Gas
My Pan (Income Tax Department )
National Consumer Helpline (Department of Consumer Affairs)
National Scholarship Portal (Ministry of Electronics and Information Technology, Government of India)
NDL India (National Digital Library of India)
NPS (Retired Life ka Sahara, NPS hamara)
ORS (Online Registration System – Patient’s Portal for e-Hospital)
Parivahan Sewa – Sarathi (Ministry of Road Transport & Highways)
Parivahan Sewa – Vahan
Passport Seva
Pay Income Tax
Pensioner’s Portal (Department of Pension and Pensioner’s Welfare)
SARAL (Transforming Citizen service delivery in Haryana)
SSRD KYRC (Special Secretary Revenue Department – Government of Gujarat)
The welfare of Plain Tribes & Backward Classes Department (ASSAM)
As you now know that, with just a few clicks you can know your EPF balance. I have checked mine, what are you waiting for go and check yours. If u still have any doubt or query please ask in the comment section.
Are you looking for selling your old used car? Are you wondering how to get the best deal for your 2nd hand car?
Today I will share with you 4 different ways you can sell your second-hand car and also share the pros and cons of each option.
But before we move ahead, it’s important to point out that when you sell an old car, there are few things which matter and should be taken into consideration. It’s not always the money you get by selling the old car which is to be maximized. It’s not the top priority of all the people.
Yes, price matters. But then a few more things matter.
Sale Price
Convenience
Documentation and RC transfer
Safety and Security
How fast you can get money in your account
Speed of Transaction
So these are 6 things which you look at when you sell your old car. Sometimes you need money fast, sometimes your preference is the convenience it takes to sell the car.
Sometimes you are not in hurry and can run around and you want to maximize your sale price and for some people, it matters that the whole transaction should be safe and they should not get into any trouble.
There is no “best way to sell your old car”
One important point to note is that there is no single best way to sell your car. In some situations, you can get a great deal when you sell your car directly to the end-user. But in situation, it can be the dealer who can offer you the best price. Sometimes, it can be online and some times it can be in the exchange offer.
If you want to watch a video on this topic, below is a detailed step by step process I have created.
Let’s start our discussion.
Option # 1: Selling a car in Exchange Offer
When you buy a new car, you can sell your old car in an exchange offer. They buy your old car for a price and deduct that amount from your new car price. You have to just pay the balance.
However, this is not so simple. Let’s dive deeper into this
There is something called “Exchange Bonus” which most of the showrooms give you which makes the whole thing very interesting.
So apart from the old car price, you also get an exchange bonus which increases your net price of the old car. However, the exchange is not always available and depends on the new car which you are buying.
So to sum it up,
Total discount you get = Old Car Valuation + Exchange Bonus
Here is how it works
When you want to buy a new car, the car showroom will do your old car valuation first. They will screen it various parameters and then tell you how much they can offer you for your used car.
On top of this, they may have an exchange bonus also in offer. It’s mostly available for cars which are already established as brands or towards the year-end when its time to clear the old stock (the old year model) or when some new version of the existing car is going to be launched (like New Swift)
But there is a problem, the thing is that the valuation you get in exchange is generally the lowest you can get. You can get much better pricing generally if you try to sell an old car in the open market. But let’s talk about it later.
Also, know that a discount is usually available most of the time, so even if you do not sell your old car, some discount you can get just by negotiating, hence the “Exchange bonus” is not something extra you get. It’s more of a marketing gimmick or a trick to give you a special feeling.
Here is a snapshot of a car seller confirming this point on Team-BHP thread (one of the best places to discuss and learn about cars)
When you sell your car in n exchange, you get high convenience and it saves you a lot of time, and that’s the reason you get lower valuation almost all the time. But if there is a good exchange bonus available, then the final deal might be ok (if not the best)
However when an exchange bonus is not available, its almost the worst pricing you get in exchange.
For example, suppose you want to buy a new car which is worth Rs 7 lacs and you want to exchange your old car. The showroom person tells you that your used car will fetch Rs 2 lacs and there is also a Rs 20,000 exchange bonus. So your total discount is Rs 2.2 lacs and you need to pay just Rs 4.8 lacs (7 – 2.2)
Pros of selling car in Exchange offer
It’s an extremely convenient way to get rid of your used car. All the formalities are taken care of by the showroom
You need less money to buy a new car. The amount you get in exchange is automatically deducted from your final price
It’s a safe way to sell your car, no worries of getting it misused or RC transfer
You get discard old car as soon as you get the delivery of your new car
It’s a good choice if your car is very old and not very famous
If good exchange bonus is available, then it can give you a very good deal overall
Cons of selling car in Exchange Offer
You get the lowest price for your second-hand car when you sell it in the exchange offer, especially when there is no exchange bonus
Not a great option if your car is not very old and is quite popular (swift, i10, Alto)
You can get manipulated in buying a bad option (some car which is going to get discontinued soon) by offering you a good exchange bonus which might look great.
Things to Remember
If your car is not very old (below 5 yrs) and it’s a popular brand, then do not sell it in the exchange offer, because you will not get a very good deal
You will not get any exchange bonus for newly launched cars or some car which has heavy waiting list. Do not try much
Do visit more than one showrooms of the same car brand to check what is the price they are offering for your old car along with the exchange bonus.
Do also visit a few other brands showroom just to check what valuation they are providing for your car.
While using this option, always make sure you are clear about the new car which you want to buy. Do not get influenced by the salesman talks about other cars and awesome deals you can get on them
Option # 2: Selling used car to local Dealers
The next option is to sell your old car to local dealers in your city. Dealer is someone who buys your old car, makes all the minor repairs, cleans it properly and sells it to another potential buyer who is looking to buy a second-hand car.
So instead of selling your car to the end person, you sell it to an intermediary who makes some money out of the whole process. Its a business and the intention is to maximize the cut from the deal.
There are two kinds of dealerships. First is the organized dealers which are quite big brands like Maruti True value and Mahindra First Choice and second is the unorganized dealers which are small local setups.
Just watch carefully and you will be able to see tons of cars lined up in a ground with a board which might say .. XYZ car dealer.
You can sell your car to any dealer, the price you get from a dealer is generally much better compared to the exchange offer, but you do not get any exchange bonus here. However, still, you can get a decent price.
My personal example
I recently sold my old car (I was the second owner) for Rs 91,000 to a local dealer. I had tried selling it to showroom in the exchange offer, but I was getting the valuation of only Rs 65,000 along with the exchange bonus of Rs 10,000. So in total they were offering Rs 75,000 only (this was TATA showroom)
It looks me close to 1 hour in selling the car and the local dealer went with me to his bank and did the NEFT transaction and I got the money in my account in the next 15 min only. So overall I sold my car in 90 min and got the money in my account. I got the proof of sale, and the RC transfer to a new owner is in the process now (looks like they have sold the car to someone)
I also went to Cars24 but got the pricing of Rs 85,000 only, which I declined as I had the offer of 91,000 already with a local dealer.
When to sell your car to the dealer?
So coming back to the discussion, you can some times get a very good deal with the dealer itself. Yes, its a business for them and they will not give you the real worth of the car, but your time is also important and if you are looking for a speedy fast transaction, dealers can be a good option.
This also turns out to be a great option, especially if your old car is technically working great, but from outside it seems too bad. Like if there are too many dents, scratches, etc. If your car is making too much sound etc. In this case, dealers can paint it, service it well and make it look like a new car and then sell it off at a good price and make money.
Pros of selling the old car to Dealer
Better pricing than exchange offer (without considering exchange bonus)
Very Convenient – Just take your car to them, they will inspect it and give you the quote. If everything is fine, you can sell your cars to them within hours
Its a great option if your car is quite popular because it’s very easy for dealers to sell them to new buyers
Some big dealers give you option of both cash payment or direct bank transfer.
Some room for negotiation (make sure you quote your expected price 50% higher than what you really need)
Cons of selling used car to dealers
If the dealer is not professional, it can turn out to be a bad experience
Often the small dealers will offer you only cash and there is no proof of sale
Important points to note
Do not rush when dealing with the dealer. Take your time and enquire at 2-3 dealers.
Do mention to them that you are looking at other dealers
Always take the sale invoice and enquire with them about the RC transfer and when you will be informed about it.
Note that you can not fool the dealers. They are the masters of the game and they do this day in and out. It’s their full-time job. Don’t try to be smart with them. You can negotiate with them (you should), but don’t try to give them wrong information about cars and how great your car is. They can’t figure out things just by looking at the car.
Option # 3: Sell your car to CARS24 or SPINNY
In the last few years, some startups (now full-grown business model) are bringing innovation in the used car buying and selling markets. The biggest player in this market is CARS24 and a new entrant is Spinny. I have strictly chosen these two options because these websites directly buy your car from you and give you the money, without you waiting for a third buyer.
Spinny is a website where you can choose to get your car evaluated. They will come to your doorstep, inspect your car and offer you a price. If you accept it, the payment will be made instantly and they can take away the car. They sell the car to the end buyers (people who are going to use it for their own purpose)
However Cars24 is a little different. with Cars24, you need to take your car to them. They will inspect your car (takes around 1 hour) and then they will make a report which will have all the details of the car, its issues, its good points etc and they will upload that report online.
They have a network of dealers who are registered with them. These dealers can bid for the price and the highest bidder gets the car. Then cars24 delivers the car to that dealer and after that dealer can sell the car to the end party. Many businesses are also registered with cars24 who use the car for taxi purposes for as cabs.
Best part about CARS24
The best part about CARS24 is that its a fast and safe way to sell your car. The payment is instant (within few minutes but Rs 1,000 less) or 2 days (NEFT , but full payment)
The prices you get from Cars24 can be a good price (but not always). As I said, I got a quote of Rs 85,000 from Cars24, but I sold it to a dealer for Rs 91,000 one the same day
However, I suggest you can go with Cars24 if you are looking for a speedy and hassle-free transaction with a “not so bad” price. There are lots of people who are ready to settle for 10% less money if it comes without any issues and risk. You need to decide for yourself.
Real-life experience with CARS24
Here is one real-life experience by Mr. Atul who sold his car in Pune branch. He had some RC transfer issue which you should know about before you want to go to CARS24
I recently sold my car via cars24 Pune Kharadi branch. Let me share my experience.
I booked the appointment, got the reminder message before the appointment. I reached cars24 office on time for inspection. They did the inspection & offered me 2.05 lack. He said is the final max price.I simply said NO to that price because I know my should be around 2.15L to 2.30L.
Then the negotiation started. He came to 2.10 then followed by 2.15 then finally 2.17 L. I still said NO & came back to home. Next day I got the call from the same person he offered me 2.25L. I said yes handed over the keys on the same day. I got amount next day.
Lesson learnt – Although Cars24 executive says its the final highest price but there is certainly scope for negotiation, In fact I would recommend all cars24 customer to negotiate. You can expect 5-10% more after negotiation. They pretend that it’s the final price but it’s not true.
I sold the car in Nov 17. It’s been more than 3 months now. I have been told that RC transfer would take max 90 days. but it’s not yet transferred. Everytime I call customer care they say car is with the inventory partner only it means car is not yet sold to the end user. This is simple pathetic. I keep on calling those guys(1800112233) & send mail to [email protected] but no concrete response. Everytime I get following generic response.
“Thank you for writing to Cars24
We would like to express our deepest regret for the inconvenience caused due to delay in response. We would require some more time in order to resolve your case.
We have also sent your concern/query to the concerned department. We hope this experience will not dilute our relationship and that you will allow us to rebuild your confidence in us.
Please contact us via phone at 1800 11 22 33 or write back to us for any further assistance.
Happy to help,
Team Cars24”
I already got the money, the only concern is RC transfer. Who would be liable till RC is not yet transferred? When I asked the same question to them they say cars24 would be liable but on paper & in govt records car is on my name. Please suggest how to solve this problem.
Overall I would not recommend cars24 to anybody because of RC transfer issue. There is no timeline when car would be actually sold to the user & RC transfer would be done. customer care is really bad. No SLA or escalation matrix defined which can help customer to resolve the issue.
Pros of selling your car to Cars24
Very professional attitude
Speedy transaction (expect 2X time, which is fair)
Instant Payment
FREE and Assured RC transfer .. it’s safe
A good way to inspect your car even if you just want to get a valuation
Cons of selling your car to Cars24
Not the best price (they need to make money too …), but still better than exchange offer
No time to time and wait (if you agree on price, you need to sell instantly .. or at best within 24 hours)
Important points to consider when selling your car to Cars24
Always go to cars24 with 1-2 more offers in hand, so that you know if you want to accept their offer or not
Its suggest to fix small issues in car before you go to them
Always carry various documents which can increase your car worth like extended warranty, servicing invoices for past few months, insurance documents, warranty cards, etc.
It’s better to have 2-3 hours in hand when you go to Cars24. Do not go expecting that process will compete in 1 hour (especially if you are going on weekends)
Always negotiate. They offered me a little higher pricing (only a little).
Option #4 – Directly to end buyer by listing on various website
Another option to sell your car is directly to the end-user – someone who is going to buy the car for their own use.
If you can get an end buyer directly through your network of friends and family circle, its a great option. You can trust the person and the transaction is smooth most of the time. But most of the times it does not work that way.
So the next best option is to list your second-hand car on various online portals. You will have to get your car details, pictures etc and then the prospective buyers will contact you and then you can negotiate with them and take the conversation forward.
While there are tons of portals for selling a used cars these days, and I will list all of them here. But I will mainly talk about OLX in this section, because I have used it personally.
The best part about this way of selling your car is you can get really good price if you come across a genuine and reasonable buyer. There is no intermediary and there is no cut for anyone. It’s good for you and its good for the buyer also. You get better pricing compared to what the dealer gives you and the buyer also gets better pricing than what he would have bought it for from the dealer.
The biggest disadvantage of selling directly to the buyer
The biggest issue with this approach is that you will get a lot of junk inquiries and broken promises and conversations which will frustrate you. Lots of people will contact you and offer you lower prices. Then lots of people will start conversation and look genuine, but they will never come back.
Then there will be people who will come and look at the car, but not move ahead. So the point is that selling directly to buyer is easy, but only when you come across a nice and genuine buyer. But if you through OLX/QUIKR route, be ready to get a lot of non-serious enquires
I got 50 enquires on OLX
I had listed my car on OLX and within 24 hours, I got around 50 enquires. People were offering prices which was 50% of what I quoted (1.4 lacs). Some people called to get more information. Some people offered to bring cash (50%) and take away my car instantly. Some of them were from nearby towns (as far as 200 km). One guy came to have a look (it was a genuine buyer), but we could not agree on the price.
I am just sharing my experience here and not declaring that you always get junk leads. I have sold some other things from OLX and overall the experience was great. But some category of items like automobiles is different because there is a big market for it and risks are involved.
Apart from OLX / QUICKR, there are many other famous options and let me give you the list of these portals along with their links
When you are selling to the end buyer, the biggest problem is the PRICE. Your price should be realistic and fair. It should be a price which makes you (seller) and buyer both happy.
Note that when you sell your car to dealer, he is going to make some profits (around 10-15%) on that and sell it to the end buyer. So you are also not getting the best price and the buyer is also not getting the best price.
If you quote your car at a price that is somewhere between what you are getting to the dealer and what the buyer is paying to dealer, then its a win-win situation and you both benefit.
So the best way to find the realistic price of your old car is as follows
Go to meet 2 dealers with your car and check the valuation of your car
Negotiate with them the best price they are ready to offer and take an average of that
Inflate the amount by 15%. This is roughly the price at which the dealer is going to sell your car to someone else
So if you get an average price of 4 lacs from the dealer, you can assume that he sell this car to another prospective buyer at 4.6 lacs (15% margin). He will quote the car at 4.8 lacs, and then sell it at 4.6 lacs finally
So now you know that the reasonable price at which you should sell the car is anywhere from 4.3 lacs – 4.5 lacs.
This way, you also get higher price and the buyer also gets it at cheaper price compared to a dealer.
You can also visit few dealers (without your car) and show interest to buy the car (your model, KM driven), you will get a rough idea of what is the selling price going on for a car similar to yours.
Bonus Tip : Always quote your expected car price 20% higher than your expected price (the price at which you will be ready to sell). On OLX, people always bargain, no matter what. So if you quote it your expected price, you will get mad looking at how people bargain.
Make sure you complete the documentation
One headache when you deal with the direct buyer is that you need to make sure that the car is transferred to the new owner. The RTO related works are to be completed. Never sell the car without making sure that the documentation is complete. Else in case of any accidents or criminal cases where a car is involved, you will be considered as the owner because the RC book has your name on it.
I think if you are getting a good price (not the highest) and you come across a genuine nice buyer, it’s better to close the deal rather than trying to maximize the deal and lose the good buyer in process.
It also makes sense to tell the buyer that you will help in RTO work. It helps in selling the car faster and also you can be convinced that the documentation work will happen properly.
Pros of selling your car directly to end buyer
Possibility of fetching the best value for your car
If your car is great and popular, you will close the deal faster
Minor issues with a car may go unnoticed as buyers don’t have full knowledge sometimes
Cons of selling your car directly to end buyer
Can take too much time as lots of junk inquiries come
Too many followups may be required
Takes too much time and effort
Important points to remember while selling the car to direct buyer
Always ask the buyer to carry their ID proofs like Adhaar card or PAN card with them.
Do not hand over your car (or 2 wheeler) for a test drive without taking their ID Proofs. Always accompany them when they do the test drive
It’s better to enquire on phone with the candidate if they are end buyer or a dealer. There are too many dealers on olx and quikr now a days
Do not handover the car unless the full payment is done and you see the amount credited by logging into your bank account (not by looking at the SMS .. there are frauds going on where you receive fake SMS of amount credited)
It’s better to take a small token from the potential buyer to lock the deal (even a small amount like Rs 500 is ok to test his genuineness)
Which is the best way to sell the used car?
By now, you must have understood that it depends from case to case and there is no single way that every car owner can follow. To summarize things, here is a table which will guide you on which option you should follow and how these options are different one various parameters
[su_table url=”” responsive=”no” class=””]
Criteria
Exchange Offer
To Dealer
Direct to Buyer
Cars24/Spinny
Sale Price
Convenience
Ease of RC transfer
Safety and Security
How quick you get money
Speed of Transaction
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Documents checklist for selling your car
Make sure you take extra care of the documentation part when selling your car to someone. While it’s not an exhaustive list, here are some most important documents required to sell the car
Mandatory Documents
RC (registration certificate)
PUC
Insurance Invoice
3 copies Form 28 (with 3 imprints of chassis)
2 copies of Form 29
2 copies of Form 30
Pan Card and Address Proof
2 Photographs
There may be many more documents required if its the case of interstate sale, and insurance transfer and things like that.
7 steps to follow when you want to sell your old car
We have discussed different ways to sell your car and what are the important points to consider. But now let’s look at some of the steps you can take and process you should follow to sell your car the best price and without any hassles
Do all the minor fixes – If your car has some minor issues like some dents, scratches, paints coming off, make sound, or things like these. It makes sense to get them fixed first. You can choose to get things fixed at a local service station if you do not want to spend a lot
Clean the car before selling – It strongly suggested that you clean the car properly and make it look very good. These things matter a lot. The first impression which the potential buyer gets by looking at the car changes the way they feel about the other aspects of the car. Always remember, a clean car makes less sound, and drives move smoothly. It’s totally worth to go for a professional clean up if your car is a little expensive one. However, if your car is too old and in bad shape, no amount of fixes and cleanup will help in increasing the price.
Post good photos online if you are listing it – If you are listing your car at some portal, make sure you click good pictures from all angles and give all the required information along with details
Have 3-4 offers in hand – Make sure you find out the valuation of your car in exchange offer (if you are planning to buy a new car), with dealers (one branded dealer like true value and 1-2 local dealer). It’s suggested that you take a day off for this. Start from the morning.. Go to a showroom and then dealers .. and finally go to Cars24 to find out their pricing
Give higher expected price – If you are ready to sell your car for 2 lacs, then start from 3 lacs expected price. Don’t worry about embarrassment. Its a game of maximizing the price, everyone plays it. Quote 3 lacs, show surprise if the other party offer 2.1 lacs, negotiate it for 2.4 lacs at least and then finally accept what you get (if it’s fair)
Carry your documents – Carry a copy of your PAN, Adhaar card or another address proof and photos (just in case)
Make sure the documentation is complete – Whatever channel you sell your car, always make sure that the documentation is complete in next 30-40 days. Prefer the payment to be done online so that the payment can be tracked back if required and always take SALE proof. If you are selling it to direct buyer, its worth to get it done on a Rs 100 stamp paper.
Some Real-Life Experience (and Tips)
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