Personal loans
Banks such as ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd and Kotak Mahindra Bank Ltd, among others, offer 'instant' or pre-approved personal loans. If you are planning to take one of these loans, here are some things that you need to check. The time line to get a personal loan for existing and new customers has come down drastically. Though your bank may give quick approval, one should definitely shop around to get competitive interest rates.

Personal loans are easy to get, but expensive to repay. Since a personal loan is an unsecured loan, the interest rate on it is higher-ranging from 11.59% to 32% per annum, depending on your income, profile, the company you work for and residential status. You can get a maximum loan amount of R40 lakh, depending on your job profile. The tenure for these loans is generally 12-60 months. Besides the interest rate, you need to check the processing fee, prepayment charges and late payment charges on the loan. For instance, if you take a R5 lakh personal loan at 14% interest rate for 5 years, you will end up paying back the lender R6.98 lakh. Your monthly instalment will be R11,634. Usually, the processing fee is 0.25-3% of the loan amount, which the banks charge upfront.

So for the same loan amount, if the processing fee is 2%, you will pay R10,000 as processing fee. Some banks charge a flat fee. In case you want to foreclose your loan, the foreclosure charges can go up to 5% of the outstanding loan amount.

Auto loans
While you can get auto loans on floating as well as fixed rates, most banks offer a fixed rate loan for automobiles. Like personal loans, auto loans also come with costs such as prepayment, processing and foreclosure charges. If you are buying a new car, the interest rate is in the range of 9.65% to 14.50% per annum. However, for a used car the interest rate is higher: 10.90-20% per annum. The interest rate varies across banks. Say, you take an auto loan of R6 lakh and the interest rate is set at 13% for a 5-year period, your total outgo will be R8.19 lakh. The processing fee for auto loans is between 0.2% and 1% of the loan amount. In the same example, if the processing fee is set at 1%, your processing fee will be R6,000. Banks also charge a flat fee, depending on the loan amount. The tenure for these loans ranges from 1 to 5 years. But some banks may run promotional offers or schemes, and may offer loans of 7 years. The tenure also depends on the type of car you wish to purchase. If it is a premium car, the tenure may be restricted to 3 years.

Home loans
Banks have recently changed the way in which they calculate the interest rate and have moved to marginal cost of funds based lending rate (MCLR) from base rate. In case of MCLR-based loans, the rates may get reset every 6 or 12 months, depending on the reset clause at the bank. At present, the interest rate on floating home loans ranges from 9.35% to 14.50% per annum. Processing fee is usually 0.25-1% of the loan amount. This is generally non-refundable even if your loan application is rejected. Say, you take a home loan of R50 lakh at an interest rate of 10% for 20 years, you will end up paying R1.15 crore (principal plus interest). This amount, of course, precludes prepayment and change in interest rate. A 1% processing charge will mean you have to pay R50,000 more on this loan.

Along with the charges and interest rates, look at how smooth the process is going to be. Since a home loan is a longer-term loan, you don't want to get stuck with a bank that doesn't service you well. You could talk to people who have already taken a loan from the bank that you plan to approach.

What you need to do
Technology is helping banks evaluate customers. You as a customer should also make use of this technology. Even if your bank gives an instant loan, shop around for better rates. There are many online loan portals that give you details about the costs involved while taking a loan. You could cross-check the interest and charges on these websites. Avoid doing rough calculations; instead, use an online calculator or ask the bank for numbers to get the right picture.

Indians buy gold, as a gift for themselves or others. They also sell it for cash or to buy new jewellery. Many also buy it purely as an investment, believing that its value will appreciate in future.

However, very few people know that a tax liability arises out of any gain made from sale of gold, be it jewellery, coins or bars. The same goes for other assets such as real estate. Many people tend to forget mentioning the tax implications that a simple transfer of property may give rise to in their tax return.

The rule of thumb with capital gains should be that irrespective of the amount of the capital transaction and regardless of whether you make a gain or a loss, you have to declare that transaction in your tax return. And if you made a profit, you also need to pay tax on it.

All assets are not taxed the same way. It varies as per the nature of the asset. Here is a look at how you need to calculate capital gains and the tax liability on transfer of various assets.

What are capital gains?
Profits or gains arising from transfer of a capital asset such as property, gold, shares, and bonds are considered capital gains and are taxed under the income head 'capital gains'. Such gains are of two types-short-term capital gains (STCG) and long-term capital gains (LTCG)-depending on the period of holding.  How the capital gains shall be taxed depends upon two things: one, the nature of the capital asset and, two, the period for which it has been held.

Capital gains are calculated by deducting the cost of acquisition of the asset from its sale consideration. The tax implications are different for each asset.

Real estate
In case of real estate, gains from transfer of immovable property (land, house and apartments) within 3 years of its purchase are considered STCG. After 3 years, it is considered LTCG. The LTCG tax rate, including cess, is 20.6% with indexation. STCG is taxed at the slab rate of the individual.

To calculate capital gains, you first need to know the cost of acquisition. In case of property, apart from the basic cost of the house, the expenditure incurred wholly and exclusively in connection with the transfer has to be first deducted. So, any expense that was necessary to transfer the asset can be added to the cost of acquisition. For instance: stamp duty, registration fee, brokerage charges, legal fees, and advertisement costs. "Where property has been inherited, expenditure incurred with respect to procedures associated with the Will and inheritance, obtaining succession certificate, and costs of executor may also be allowed in some cases.

Besides that, while calculating LTCG from transfer of a residential property, the indexed cost of acquisition has to be ascertained. For that, the cost inflation index (CII) is used, which is not allowed in case of STCG.

Say, you are planning to sell a house bought in April 2013 for R50 lakh, and now you sell it for R70 lakh. To calculate the capital gain, you have to adjust the cost of acquisition for inflation. To do so, multiply the purchase price by the CII number of the current year (year of sale) and divide the resulting figure by the CII number for the year of purchase. By this formula, the inflation-adjusted cost of acquisition would be: R50 lakh*1125 (CII number for 2016-17)/939 (CII number for 2013-14).

This comes to R59,90,415. So your capital gain would be R70 lakh minus R59.90 lakh, which comes to about R10.10 lakh. Accordingly, your LTCG tax would be 20.6% of this amount, or about R2.08 lakh.

If the same property was bought in April 2014, and is being sold now, the holding period becomes less than three years. The seller's capital gain would be R20 lakh (R70 lakh minus R50 lakh), which will get added to her other incomes and get taxed according to the applicable slab. If she falls under the highest tax slab of 30.9%, the STCG tax would be R6.18 lakh.

Shares and mutual funds
Gains from transfer of shares and mutual funds (equity oriented), within one year of purchase, are considered as STCG. After one year, they are considered as LTCG. In case of STCG, tax is 15.45% (including cess), whereas LTCG is exempt from tax. In other words, gains from shares and mutual funds (equity oriented), sold after 1 year of holding, are tax-free in the hands of the investor.

However, there may also be a case of loss from equity investment. If it is short-term capital loss (STCL), you are allowed to set it off against other STCG. It can also be carry forwarded for up to eight subsequent financial years (FY) for set-off. However, long-term capital loss (LTCL) is not allowed to be set off or carried forward.

Like in real estate, expenses incurred on transacting in shares or mutual funds can also be claimed for deduction when calculating capital gains. "The broker's commission and demat account fee may be allowed to be deducted from sale proceeds. But Securities Transaction Tax (STT) is not allowed as a deductible expense.

The rules are different for debt-oriented mutual funds. Equity mutual funds are those where 65% of the corpus is invested in equity and equity-related instruments. Those holding less than 65% (in equity) are debt mutual funds. For debt funds, both holding period and tax implications are different. If the debt fund is held for 36 months or less, it is considered short term. STCG on debt funds is taxed at the slab rate applicable to the individual, whereas LTCG is taxed at 20% with indexation.

Gold and bonds
Any form of physical gold (jewellery, coins or bars), if sold before 3 years from the date of purchase, will be considered a short-term holding. After 3 years the holding is seen as long term. STCG from sale of gold is taxed at the slab rate, whereas LTCG is taxed at 20.6% with indexation.

There are different rules for bonds, depending on the issuer and other features. For instance, listed corporate bonds are considered short term if sold before completion of one year from date of purchase, and are taxed as per the applicable slab rate.

If sold after a year, the gains will be considered LTCG and taxed at the rate of 10.3% without indexation. On the other hand, in case of capital-indexed bonds issued by the Government of India, LTCG is taxed at 20.6% with indexation or 10.3% without indexation, whichever is less. Apart from these, specified tax-free bonds (listed or unlisted) covered under section 10(15) of the Act are free from both short- and long-term capital gains tax.

How to reduce LTCG tax
You can eliminate or reduce the LTCG tax implications arising out of capital asset transactions (be it a house, gold or bond) if you reinvest the capital gains in a residential property or specified infrastructure bonds.

According to the prevailing tax rules, LTCG arising from the sale of any capital asset is exempt from tax under section 54F of the Income-tax Act, 1961 if the sum is used to acquire a residential property, provided you meet certain conditions. To get the exemption, the assessee can set off capital gains against a residential property bought in the previous 1 year before the date of transfer of property, or two years after its transfer. In case of under-construction properties, the construction needs to be completed within 3 years from the date of transfer. If the construction is not completed within 3 years of date of transfer, you will lose the benefit and the LTCG will attract tax.

An assessee can also save tax on LTCG from sale of any capital asset by investing the capital gain in specified bonds under section 54EC of the Act. But one must remember that the total exemption is restricted to R50 lakh. Amounts in excess of that will attract LTCG tax if not reinvested in a residential property.

Also, LTCG from sale of a residential property will be tax-free if the sale proceeds are invested in a small or medium enterprise in the manufacturing sector. But the funds have to be used by the company to acquire new plant and machinery before the due date to furnish tax returns for the relevant FY. The equity holding or voting power of the assessee, after the investment, should be more than 50%.

Another scenario may be that you intend to use the sale proceeds after some time, but within the stated time limit to avoid tax. In such a case, you should deposit the amount in a bank under the Capital Gains Account Scheme (CGAS) with the intention of using the funds to buy a new house within 2 years or to construct one within 3 years.

Also remember that if the new property is sold or the bonds are redeemed within a period of 3 years, the exemption claimed with respect to the old property shall be revoked. Even if you take any loan or advance against the security of these bonds, they will be deemed to be converted into cash.

Things to remember
In case of transfer of any capital asset, the assessee should file a proper tax return reflecting such transactions. It is pertinent that the taxpayer mindfully discloses such gains in the return form, irrespective of the fact that no tax is payable on the same.

Claim all expenses incurred in connection with the transfer of capital assets and indexation benefits to calculate capital gains or losses. To avail exemption under section 54F of the Act, deposit the LTCG from property transfer in CGAS, if it's not immediately reinvested.