Saving Mantra Blogs

Author: Financial Analyst

  • How SIP Works in Mutual Funds (Explained in Simple Words)

    What Is a SIP?

    A SIP is a simple method of investing in mutual funds where you invest a fixed amount every week, month, or quarter.
    Example:
    If you invest ₹1,000 every month, the mutual fund company automatically deducts the amount from your bank account and buys units for you.

    You don’t need to choose the right day, predict the market, or worry about timing. SIPs do the work for you.

    How SIP Works (Step-by-Step Explanation)

    1️⃣ You Choose an Amount You Are Comfortable With

    You can start with something as low as ₹100–₹500.
    This makes SIPs affordable for students, new earners, homemakers, and small business owners.

    2️⃣ Money Is Invested Automatically Every Month

    On a fixed date (chosen by you), the amount is deducted from your bank account and invested in the selected mutual fund.

    You don’t have to remember or do anything manually.

    3️⃣ You Get Mutual Fund Units Based on Market Price (NAV)

    Every mutual fund has a daily price called NAV – Net Asset Value.

    • If NAV is low → you get more units
    • If NAV is high → you get fewer units

    This is where the real magic of SIP happens.

    4️⃣ SIP Takes Advantage of Market Ups and Downs

    Because you invest regularly, SIP uses rupee-cost averaging.

    Example:

    • Month 1 NAV = ₹20 → your ₹1,000 buys 50 units
    • Month 2 NAV = ₹25 → your ₹1,000 buys 40 units
    • Month 3 NAV = ₹18 → your ₹1,000 buys 55 units

    Over time, you buy units at different prices. This averages out your cost, reducing the impact of market volatility.

    This is why SIP is preferred even during market crashes — you get more units at lower prices.

    5️⃣ Your Money Grows Through Compounding

    Compounding means earning returns on your returns.

    Example:
    If your mutual fund earns 10% annually, next year you earn returns on:

    • your original investment
      • the returns that were added earlier

    Over many years, this leads to exponential growth.

    This is why SIPs work best when you stay invested long-term (5–15 years).

    ⭐ Simple Example of SIP Growth

    If you invest ₹2,000 per month for 10 years at 12% expected returns:

    • Total invested = ₹2,40,000
    • Total value ≈ ₹4,30,000
    • Wealth gained = ₹1,90,000 (this is compounding power!)

    Imagine continuing this for 20–30 years — the results can be life-changing.

    Benefits of SIP (In Simple Words)

    ✔ You don’t need a lot of money to start

    Begin with ₹100–₹500.

    ✔ No need to time the market

    SIP invests for you automatically.

    ✔ Great for long-term goals

    Wealth creation, retirement, kids’ education, buying a house.

    ✔ Reduces the risk of market fluctuations

    Thanks to rupee-cost averaging.

    ✔ Helps you build a habit of investing

    Small steps, big results.

    Who Should Invest Through SIP?

    SIP is perfect for:

    • Salaried individuals
    • Students or beginners
    • Business owners who want disciplined investing
    • Anyone saving for long-term goals
    • Investors who don’t understand timing the market
    • People who want to start small and grow steadily

    Common Myths About SIP (Clarified Simply)

    ❌ Myth 1: SIP guarantees returns

    ✔ SIP does not guarantee returns.
    Mutual funds invest in markets which can go up and down.
    However, long-term SIPs historically deliver strong returns.

    ❌ Myth 2: You should stop SIP when the market falls

    ✔ Actually, falling markets are the best time for SIP — you get more units cheaply.

    ❌ Myth 3: You must invest monthly

    ✔ You can choose weekly, quarterly, or even daily SIPs.

    How to Start a SIP (Simple Steps)

    1. Choose your goal (wealth, education, retirement, etc.)
    2. Select a mutual fund category (equity, hybrid, debt).
    3. Enter monthly SIP amount.
    4. Choose SIP date.
    5. Complete KYC (PAN, Aadhaar).
    6. Set auto-debit mandate.

    That’s it — you’re now an investor.

    Final Thoughts: Why SIP Is the Best Way to Start Investing

    Great for retail investors starting out.

    What Is a SIP?

    A SIP is a simple method of investing in mutual funds where you invest a fixed amount every week, month, or quarter.
    Example:
    If you invest ₹1,000 every month, the mutual fund company automatically deducts the amount from your bank account and buys units for you.

    You don’t need to choose the right day, predict the market, or worry about timing. SIPs do the work for you.

    How SIP Works (Step-by-Step Explanation)

    1️⃣ You Choose an Amount You Are Comfortable With

    You can start with something as low as ₹100–₹500.
    This makes SIPs affordable for students, new earners, homemakers, and small business owners.

    2️⃣ Money Is Invested Automatically Every Month

    On a fixed date (chosen by you), the amount is deducted from your bank account and invested in the selected mutual fund.

    You don’t have to remember or do anything manually.

    3️⃣ You Get Mutual Fund Units Based on Market Price (NAV)

    Every mutual fund has a daily price called NAV – Net Asset Value.

    • If NAV is low → you get more units
    • If NAV is high → you get fewer units

    This is where the real magic of SIP happens.

    4️⃣ SIP Takes Advantage of Market Ups and Downs

    Because you invest regularly, SIP uses rupee-cost averaging.

    Example:

    • Month 1 NAV = ₹20 → your ₹1,000 buys 50 units
    • Month 2 NAV = ₹25 → your ₹1,000 buys 40 units
    • Month 3 NAV = ₹18 → your ₹1,000 buys 55 units

    Over time, you buy units at different prices. This averages out your cost, reducing the impact of market volatility.

    This is why SIP is preferred even during market crashes — you get more units at lower prices.

    5️⃣ Your Money Grows Through Compounding

    Compounding means earning returns on your returns.

    Example:
    If your mutual fund earns 10% annually, next year you earn returns on:

    • your original investment
      • the returns that were added earlier

    Over many years, this leads to exponential growth.

    This is why SIPs work best when you stay invested long-term (5–15 years).

    ⭐ Simple Example of SIP Growth

    If you invest ₹2,000 per month for 10 years at 12% expected returns:

    • Total invested = ₹2,40,000
    • Total value ≈ ₹4,30,000
    • Wealth gained = ₹1,90,000 (this is compounding power!)

    Imagine continuing this for 20–30 years — the results can be life-changing.

    Benefits of SIP (In Simple Words)

    ✔ You don’t need a lot of money to start

    Begin with ₹100–₹500.

    ✔ No need to time the market

    SIP invests for you automatically.

    ✔ Great for long-term goals

    Wealth creation, retirement, kids’ education, buying a house.

    ✔ Reduces the risk of market fluctuations

    Thanks to rupee-cost averaging.

    ✔ Helps you build a habit of investing

    Small steps, big results.

    Who Should Invest Through SIP?

    SIP is perfect for:

    • Salaried individuals
    • Students or beginners
    • Business owners who want disciplined investing
    • Anyone saving for long-term goals
    • Investors who don’t understand timing the market
    • People who want to start small and grow steadily

    Common Myths About SIP (Clarified Simply)

    ❌ Myth 1: SIP guarantees returns

    ✔ SIP does not guarantee returns.
    Mutual funds invest in markets which can go up and down.
    However, long-term SIPs historically deliver strong returns.

    ❌ Myth 2: You should stop SIP when the market falls

    ✔ Actually, falling markets are the best time for SIP — you get more units cheaply.

    ❌ Myth 3: You must invest monthly

    ✔ You can choose weekly, quarterly, or even daily SIPs.

    How to Start a SIP (Simple Steps)

    1. Choose your goal (wealth, education, retirement, etc.)
    2. Select a mutual fund category (equity, hybrid, debt).
    3. Enter monthly SIP amount.
    4. Choose SIP date.
    5. Complete KYC (PAN, Aadhaar).
    6. Set auto-debit mandate.

    That’s it — you’re now an investor.

    Final Thoughts: Why SIP Is the Best Way to Start Investing

    SIP is one of the most beginner-friendly and effective ways to invest in mutual funds. You start small, stay consistent, benefit from compounding, and avoid the stress of timing the market.

    Whether your goal is wealth creation or long-term financial stability, SIP can be the foundation of your investment journey

  • How to Invest in Mutual Funds for NRI (Step-by-Step Guide)

    Investing in mutual funds is one of the simplest ways for NRIs to participate in the Indian growth story. With digital onboarding, global accessibility, and strong regulatory protection from SEBI, the process has become extremely smooth. Whether you live in the USA, UAE, UK, Canada, Singapore, or anywhere else, you can effortlessly invest in Indian mutual funds using your NRE or NRO account.

    In this blog, we break down everything an NRI needs to know—from eligibility and the KYC process to tax rules and documentation.

    1. Who Can Invest in Mutual Funds as an NRI?

    Any Indian citizen living abroad or holding an OCI/PIO status can invest in mutual funds in India. Investments must comply with:

    • FEMA Regulations
    • SEBI Guidelines
    • Taxation norms (TDS rules)

    Most AMCs accept investments from all NRIs, except a few restrictions for US & Canada due to FATCA.

    2. Step-by-Step Process: How NRIs Can Invest in Mutual Funds in India

    Step 1: Open an NRE or NRO Bank Account

    NRIs cannot invest using a regular savings account. You must have:

    • NRE Account → Fully repatriable, ideal for returning funds abroad
    • NRO Account → Non-repatriable beyond $1 million per year

    Which account to use?
    Use NRE for investment + repatriation, NRO for income earned in India.

    Step 2: Complete NRI KYC (Online or Offline)

    To begin investing, SEBI requires you to complete a one-time KYC. You will need:

    • Passport (with visa/OCI)
    • PAN card
    • Overseas address proof
    • Indian address proof (optional but useful)
    • A recent photo
    • FATCA declaration
    • Video/Offline In-Person Verification (IPV)

    Once KYC is completed, you can invest with any AMC or platform.

    Step 3: Choose the Type of Mutual Fund You Want to Invest In

    Equity Funds

    Best for long-term wealth creation with higher return potential.

    Debt Funds

    Stable, low-risk investments—suitable for NRIs looking for safer options.

    Hybrid Funds

    A mix of equity + debt, perfect for moderate risk appetite.

    Step 4: Select Your Investment Platform

    NRIs can invest through:

    • AMC Websites (SBI MF, HDFC MF, ICICI Prudential, etc.)
    • Investment Platforms (Scripbox NRI, Fisdom, Kuvera NRI)
    • NRI Wealth Services from Banks

    Note: US/Canada NRIs may have limited AMC choices.

    Step 5: Start Investing through SIP or Lump Sum

    SIP — Systematic Investment Plan

    • Start with as low as ₹500
    • Great for disciplined, long-term investing
    • Reduces risk through rupee-cost averaging

    Lump Sum Investment

    • Suitable for NRIs earning in foreign currency
    • Good for markets at attractive valuations

    Step 6: Track & Review Your Portfolio

    NRIs should monitor their investments:

    • Every 6–12 months
    • Through AMC apps or online dashboards
    • By checking risk-return suitability
    • By reviewing tax impact and currency movement

    3. Taxation Rules for NRIs Investing in Mutual Funds

    Equity Funds

    • Short-Term Capital Gains (STCG) → 15% TDS
    • Long-Term Capital Gains (LTCG) → 10% above ₹1 lakh

    Debt Funds

    After 2023 changes:

    • Taxed as per your income slab
    • TDS applies at the slab rate for NRIs

    Repatriation Rules

    • Proceeds from NRE account can be freely repatriated
    • NRO account repatriation allowed up to $1 million per year

    DTAA Benefits

    If your country has a Double Taxation Avoidance Agreement with India, you may claim tax credits abroad.

    4. Documents Required for NRI Mutual Fund Investment

    • Valid passport
    • PAN card
    • Visa / Work Permit / OCI / PIO
    • Overseas address proof (bank statement, utility bill)
    • Cancelled cheque of NRE/NRO account
    • FATCA declaration

    5. Common Mistakes NRIs Should Avoid

    • Using a normal savings account instead of NRE/NRO
    • Ignoring tax (TDS) rules
    • Not checking AMC eligibility for US/Canada
    • Choosing funds based only on past returns
    • Not reviewing portfolio annually

  • How to Invest in Equity in India: Step-by-Step Guide for Beginners

    Equity (shares of companies) is one of the most powerful ways to grow wealth in India – but only if you understand the basics and follow a disciplined process.

    This guide gives you a clear, practical, step-by-step path to start investing in equity in India, whether through direct stocks or equity mutual funds and index funds.

    Disclaimer: This is educational information, not personalised investment advice. Please consult a SEBI-registered investment adviser or tax professional before making decisions.

    Step 1: Understand What Equity Investing Really Means

    When you buy equity (shares), you’re buying a small ownership stake in a company.
    Your returns come from:

    • Capital gains – share price going up over time
    • Dividends – a part of company profits (if declared)

    Equity returns can be high over the long term, but prices can fluctuate sharply in the short term. That’s why SEBI and exchanges constantly stress understanding risk, product features and costs before investing. NSE India+2SEBI Investor+2

    Ask yourself:

    • Can I stay invested for 5+ years?
    • Can I tolerate temporary ups and downs?
    • Do I have an emergency fund and no high-interest debt?

    If the answer is “yes”, equity investing can be suitable for long-term goals like retirement, children’s education, or wealth creation.

    Step 2: Put the Basics in Place – PAN, KYC & Bank Account

    To invest in the Indian securities market, you must complete KYC (Know Your Customer) with valid documents. PAN is the key identity number for investing. Securities and Exchange Board of India+1

    You need:

    • Permanent Account Number (PAN)
    • Proof of identity & address (Aadhaar, passport, driving licence, etc.) SEBI Investor+1
    • Bank account – for transferring money in and out of your trading account SEBI Investor

    You can complete e-KYC online with most brokers using Aadhaar-based verification.

    Step 3: Open a Demat & Trading Account

    To buy and hold shares in India, you need three accounts working together:

    1. Demat Account – where your shares are held in electronic form with a SEBI-registered Depository Participant (DP), associated with NSDL or CDSL. SEBI Investor+1
    2. Trading Account – with a SEBI-registered stock broker to place buy/sell orders on NSE/BSE. SEBI Investor+1
    3. Bank Account – for funds transfer.

    How to choose a broker

    • Ensure the broker is SEBI-registered and a member of NSE/BSE. NSE India
    • Compare:
      • Brokerage charges
      • Platform usability (mobile & web app)
      • Research & tools offered
      • Customer support

    Complete their online account opening form, upload documents, sign agreements, and once your account is activated, you can start investing.

    Step 4: Decide How You Want to Invest in Equity

    There are four main ways for a retail investor to participate in equity:

    1. Direct Equity (Stocks)
      • You pick individual companies and buy their shares.
      • Needs time, research and emotional discipline.
    2. Equity Mutual Funds
      • A professional fund manager pools money from many investors and invests in diversified portfolios of stocks.
      • Categories include flexi-cap, large-cap, mid-cap, small-cap, sectoral, etc.
    3. Index Funds & ETFs
      • These simply track indices like Nifty 50 or Sensex, giving broad market exposure at low cost. Groww+1
      • Ideal for beginners who want “market returns” without selecting individual stocks.
    4. PMS / AIF (for high-net-worth investors)
      • Portfolio Management Services & Alternative Investment Funds are typically for higher ticket sizes (often ₹25L+ or more).
      • Suitable only if you meet minimum investment and understand the product.

    For most beginners, starting with index funds or diversified mutual funds through SIPs is usually simpler and less stressful than stock-picking.

    Step 5: Create a Simple Equity Plan

    Before placing your first order, write down:

    1. Goals – e.g. “Retirement in 20 years”, “Child’s education in 15 years”.
    2. Time horizon – minimum 5–7 years for equity heavy portfolios.
    3. Risk profile – conservative, moderate, aggressive.
    4. Asset allocation – how much in equity vs debt vs cash.

    A simple starting framework:

    • Emergency fund: 3–6 months of expenses (bank FD / liquid fund)
    • Insurance: adequate health & term insurance
    • Long-term wealth: SIPs in index/equity funds + some direct stocks once you are comfortable

    SEBI’s investor education materials consistently encourage such goal-based, diversified approaches instead of speculative trading. SEBI Investor+2SEBI Investor+2

    Step 6: Learn the Mechanics – How to Place Your First Order

    Once your Demat & trading accounts are active:

    1. Add funds to your trading account from your bank.
    2. Decide:
      • What to buy – stock, mutual fund, or ETF
      • Quantity or investment amount
    3. Choose order type:
      • Market order – executed at current market price
      • Limit order – you specify the maximum buy or minimum sell price
    4. Select the exchange – NSE or BSE (for most large stocks, both are fine). Kotak Securities+1
    5. Confirm the order; once executed:
      • Money is debited from your trading account
      • Shares/units are credited to Demat (for stocks/ETFs) or held in statement of account (for mutual funds, depending on mode)

    Start with small amounts until you are fully comfortable with the process.

    Step 7: Understand Tax on Equity Gains in India (High-Level)

    Profits from selling shares or equity mutual funds are taxed as capital gains:

    • Short-Term Capital Gain (STCG) – when you sell listed equity or equity-oriented mutual funds within 12 months.
      • After recent Budget changes, STCG on such equity investments is generally taxed at 20% (plus surcharge & cess) under special provisions, subject to conditions. cleartax+2Tax2win+2
    • Long-Term Capital Gain (LTCG) – when you sell after 12 months.
      • The Finance (No. 2) Act 2024 introduced a uniform LTCG rate of 12.5% on long-term capital gains on most capital assets (including equity), with specific rules on thresholds and dates of transfer. Income Tax India+2https://www.bajajfinserv.in+2

    The detailed tax treatment depends on:

    • The type of security
    • Holding period
    • Whether Securities Transaction Tax (STT) was paid
    • Which tax regime you choose (old vs new)

    Tax laws keep evolving, so always check the latest Income Tax rules or a CA/tax advisor before making decisions.

    Step 8: Protect Yourself – Follow SEBI Guidelines & Avoid “Tips”

    SEBI is quite active in:

    • Regulating intermediaries and protecting investor interest NSE India+1
    • Cracking down on unregistered “finfluencers” and misleading return claims on social media. Reuters

    To stay safe:

    • Take advice only from SEBI-registered investment advisers or research analysts.
    • Do not act on “sure-shot tips” from WhatsApp/Telegram/YouTube.
    • Don’t share OTPs or credentials with anyone, including brokers’ staff.
    • Read all documents and risk disclosures before investing. NSE India+1

    Step 9: Review, Rebalance and Stay Long-Term

    Equity investing is not a “set and forget forever” or “trade daily” game. Healthy habits:

    • Review portfolio annually – Check if your asset allocation still matches your goals.
    • Rebalance – If equity has grown too much vs debt, shift some profit back to safer assets (and vice versa).
    • Increase SIPs with income – As your salary/business income grows, gradually raise your monthly investing.
    • Stay patient – Ignore short-term noise; focus on long-term fundamentals.

    Quick Summary Checklist

    1. Get PAN, KYC and bank account ready. Securities and Exchange Board of India+1
    2. Open Demat + trading account with a SEBI-registered broker/DP. SEBI Investor+2Swastika Investmart+2
    3. Decide whether to start with index funds/equity mutual funds or direct stocks. Groww+1
    4. Create a goal-based plan and start small, ideally via SIPs. SEBI Investor+1
    5. Learn order types, place your first small order, and track calmly. NSE India+1
    6. Understand basic tax rules on STCG/LTCG and keep records. Income Tax India+2cleartax+2
    7. Avoid unregistered advisers and “tips”; follow SEBI guidelines and official investor education content.

  • How to File ITR-1 (Sahaj) for FY 2025-26 (AY 2026-27): Step-by-Step Guide

    Introduction

    If you are a salaried individual with simple income (salary, one house property and interest), ITR-1 “Sahaj” is usually the simplest way to file your Income Tax Return in India. For FY 2025-26 (AY 2026-27), the overall process on the income tax e-filing portal is expected to remain similar to AY 2025-26, where the department already provides an online utility and a common offline utility for ITR-1. Income Tax Department+1

    However, forms and fine print are officially notified every year by CBDT, so you should always cross-check the latest instructions on the Income Tax Department’s website at the time of filing. The Economic Times

    This blog walks you through:

    • Who can and cannot use ITR-1 (Sahaj)
    • Documents you should keep ready
    • A step-by-step guide to filing ITR-1 online
    • Common mistakes to avoid

    Note: This is general information, not personalised tax advice. Always refer to the latest law and notify forms / instructions before filing.

    1. Who can file ITR-1 (Sahaj)?

    As per the latest available ITR-1 form for AY 2025-26, ITR-1 is meant for individuals who are: Income Tax India+1

    • Resident individuals (other than “not ordinarily resident”)
    • With total income up to ₹50 lakh
    • Having income from:
      • Salary / Pension
      • One house property (self-occupied / let out), without brought-forward loss
      • Other sources – such as interest from savings account, fixed deposits, family pension, etc.
      • Certain long-term capital gains u/s 112A up to ₹1.25 lakh (as allowed under the AY 2025-26 form) Income Tax India+1

    You cannot use ITR-1 if you have any of the following (based on current pattern) Income Tax India+1

    • You are a Director in a company
    • You have invested in unlisted equity shares
    • Total income exceeds ₹50 lakh
    • You have more than one house property
    • You have capital gains (other than the specific LTCG u/s 112A permitted)
    • You have income from business or profession
    • You have taxable income from lottery winnings, race horses, speculative income etc.
    • You are a non-resident or “not ordinarily resident”

    For FY 2025-26 (AY 2026-27), eligibility is expected to follow a similar pattern, subject to changes in the final notification by CBDT. Always check the updated instructions in that year’s ITR-1 form. Income Tax India+1

    2. Understand tax regime choice (Old vs New)

    Since Budget 2023, the New Tax Regime u/s 115BAC(1A) has become the default regime, and this continues in AY 2025-26; the ITR-1 online form auto-selects the new regime unless you choose to opt out and go with the old regime. Income Tax Department+1

    For FY 2025-26 (AY 2026-27):

    • Expect the New Regime to continue as default, unless the law is changed.
    • If you want to use the Old Regime, you’ll likely have to explicitly choose it in the “Personal Information / Tax Regime” section, similar to AY 2025-26. Income Tax Department

    Practical tip:

    • New regime → lower slab rates but very limited deductions (no 80C PF/LIC, no HRA, etc., except specified ones).
    • Old regime → higher slab rates but you can use popular deductions like 80C, 80D, 24(b) home loan interest on self-occupied property, etc.

    Before you start filing, roughly compare both regimes using a calculator or consult a tax professional.

    3. Documents you should keep ready

    To file ITR-1 smoothly, keep the following handy:

    1. PAN and Aadhaar
    2. Form 16 from your employer(s)
    3. Salary slips (optional but useful for breakup)
    4. Form 26AS / AIS / TIS – to verify TDS, TCS and other reported incomes
    5. Bank statements / interest certificates for savings account & FDs/RDs
    6. Home loan interest certificate (if one house property with loan)
    7. Details of rent received (if property is let out), municipal taxes paid
    8. Investment proofs for deductions (if you are using Old Regime) – 80C, 80D, 80G etc.
    9. Details of advance tax / self-assessment tax paid (if any)

    4. Step-by-step: How to file ITR-1 online for FY 2025-26

    The Income Tax Department provides a detailed online user manual for filing ITR-1; the steps below are aligned with that flow and are likely to remain similar for AY 2026-27 as well. Income Tax Department

    Step 1: Log in to the Income Tax e-filing portal

    1. Visit the official portal: https://www.incometax.gov.in
    2. Click “Login” and sign-in using your PAN (as user ID), Aadhaar / net banking etc.
    3. If you are a first-time user, register yourself (PAN, basic details, OTP verification).

    Step 2: Start a new Income Tax Return

    1. Go to e-File → Income Tax Returns → File Income Tax Return.
    2. Select:
      • Assessment Year (AY) 2026-27
      • Mode of filing: Online
      • Status: Individual
    3. In the next screen, choose ITR-1 (Sahaj) as the ITR form (if you meet the eligibility conditions).

    Step 3: Choose reason for filing the return

    You’ll be asked “Why are you filing the return?” (e.g.,

    • Income more than basic exemption limit
    • You want to claim a refund
    • You meet specified conditions even if income is below limit, etc.)

    Choose the appropriate option based on your situation.

    Step 4: Select your tax regime

    In the “Personal Information” section, a question will appear about opting out of the new tax regime (wording may be similar to AY 2025-26, where “No” is auto-selected and you choose “Yes” to opt out). Income Tax Department

    • Choose New Regime (default) or
    • Opt for Old Regime if it benefits you more.

    Once selected and confirmed, changing it later within the same filing can be restricted, so decide carefully.

    Step 5: Fill “Personal Information” section

    Check and confirm:

    • Name, Date of Birth, Gender
    • PAN, Aadhaar, Address
    • Contact details – mobile, email
    • Employer type – Government, PSU, Other
    • Residential status (Resident)

    Most fields will be pre-filled from your profile. Update only if incorrect.

    Step 6: Fill “Gross Total Income” – Salary, House Property & Other Sources

    A. Salary / Pension

    • Click the Income from Salary section.
    • If your employer has correctly filed TDS (Form 24Q) and linked your PAN, your salary details may be pre-filled from Form 16 / AIS. Income Tax Department
    • Cross-check with Form 16 – particularly:
      • Gross salary
      • Exempt allowances (HRA, LTA etc. for Old Regime)
      • Standard deduction (usually ₹50,000)
      • Perquisites, retirement benefits if any

    Correct any mismatch manually.

    B. Income from One House Property

    You can report only one property in ITR-1 (self-occupied or let out). Income Tax Department

    • For self-occupied:
      • Annual value is usually taken as nil.
      • You can claim home loan interest u/s 24(b) (subject to limits and regime).
    • For let-out property:
      • Enter rent received, municipal taxes paid.
      • 30% standard deduction is auto-applied to Net Annual Value.
      • Interest on home loan is deductible as per rules.

    C. Income from Other Sources

    Include:

    • Interest from savings bank accounts
    • FD / RD interest
    • Interest from recurring deposits, corporate bonds, etc.
    • Family pension, if applicable

    Avoid double counting: if AIS/26AS already show interest, make sure your own workings match.

    If you have dividends or certain LTCG up to ₹1.25 lakh u/s 112A, you may still be able to use ITR-1 as per the AY 2025-26 form, but watch for any rule change when AY 2026-27 is notified. Income Tax India+1

    Step 7: Claim deductions under Chapter VI-A (80C, 80D etc.)

    This section applies mainly if you are under the Old Tax Regime (many of these are not allowed in the New Regime).

    Common deductions:

    • Section 80C – PF, PPF, ELSS, Life Insurance, Principal on home loan, tuition fees etc. (limit ₹1.5 lakh)
    • Section 80CCD(1B) – NPS additional ₹50,000 (over 80C)
    • Section 80D – Medical insurance premiums, health check-up
    • Section 80G – Donations to approved funds
    • Other deductions, where eligible (80E, 80TTB for senior citizens etc.)

    Enter the amounts with proper breakup as asked in the schedule.

    Step 8: Review “Tax Paid” – TDS, TCS & Self-Assessment Tax

    In Schedule TDS/TCS/Taxes Paid:

    • Verify TDS on salary from Form 16
    • Verify TDS on interest, other incomes from Form 26AS / AIS
    • Add details of advance tax or self-assessment tax you may have paid (Challan details).

    The portal will compute:

    Total tax liability – (TDS + TCS + Advance Tax + Self-assessment tax)

    This results in either tax payable or refund.

    Step 9: Preview, validate and confirm all sections

    The portal typically shows a section-wise summary: Personal Info, Gross Total Income, Deductions, Tax Paid, etc. Income Tax Department

    1. Use “Validate” / “Confirm” at the end of each section to check for errors.
    2. In the final screen, click “Preview Return” to see Form ITR-1 summary.
    3. Make sure:
      • Your name, PAN, address, bank details (for refund) are correct.
      • Bank account selected for refund is pre-validated and EVC-enabled, as required by the portal.

    Step 10: Submit and e-Verify ITR-1

    Once satisfied:

    1. Click “Proceed to Verification” and then “Submit Return”.
    2. You must e-verify your ITR within the stipulated time (currently 30 days from filing, as per recent CBDT notification; always check latest rule).
    3. E-verification options typically include: Income Tax Department
      • Aadhaar OTP
      • Net banking / bank account EVC
      • Demat account EVC
      • Digital Signature Certificate (DSC – for certain cases)

    After successful e-verification, your ITR-1 is considered duly filed and you’ll receive an ITR-V acknowledgement.

    5. Due date for filing ITR-1 for FY 2025-26

    For non-audit individual taxpayers, the statutory due date is generally 31 July following the end of the financial year. So for FY 2025-26, the due date would be 31 July 2026, unless extended by CBDT by way of notification (as it has done in several past years). Google Translate

    If you miss the original due date, you may still file a belated or updated return but with additional interest, late fee, and with some restrictions.

    6. Common mistakes to avoid

    1. Choosing wrong ITR form
      • If you don’t meet ITR-1 conditions (e.g., have business income, more than one house property, large capital gains), choose another applicable form such as ITR-2/3. Income Tax India+1
    2. Ignoring AIS/26AS mismatch
      • If your income or TDS in ITR does not match AIS/26AS, your case may get flagged for mismatch notices.
    3. Wrong tax regime choice
      • Once you file under a particular regime, changing it later may be restricted or not permitted in some cases. Decide before filing.
    4. Not updating bank details
      • Incorrect IFSC / account number will delay your refund. Make sure the refund account is pre-validated.
    5. Forgetting e-verification
      • Filing is incomplete without e-verification. If not done within the allowed time, the return is treated as not filed.
    6. Skipping exempt incomes
      • Even if some incomes are exempt (e.g., certain allowances, PF withdrawals etc.), they may still need to be disclosed in specified schedules.

    7. Quick recap

    • Check eligibility for ITR-1 (resident individual, income ≤ ₹50 lakh, simple sources).
    • Compare old vs new tax regime before starting the return.
    • Keep Form 16, 26AS/AIS, interest certificates, investment proofs ready.
    • Use the Income Tax e-filing portal to file online ITR-1 for AY 2026-27.
    • Carefully fill salary, house property, other sources, deductions and tax paid schedules.
    • Preview, submit and e-verify your ITR-1 within the stipulated time.

    If you are unsure about regime selection, capital gains reporting or house property nuances, it’s wise to consult a tax professional before filing.

  • How to Export to China: A Practical Step-by-Step Guide

    China is one of the world’s largest importers of raw materials, food, machinery, consumer goods and services. That makes it a huge opportunity—but also one of the most tightly regulated markets. If you don’t understand the process, your shipment can be delayed, rejected, or hit with unexpected costs.

    This guide walks you through step by step how to export to China—from preparing your business, to finding buyers, to clearing Chinese customs.

    Step 1: Get Your Export Basics in Order

    Before you think about China specifically, make sure your export foundations are in place.

    For example, if you’re in India, you’ll typically need:

    • A legally registered business
    • A current account that supports foreign trade
    • Importer-Exporter Code (IEC) from DGFT – this is mandatory for any export or import. DGFT+1

    IEC registration is done online through the DGFT portal. DGFT+1

    If you’re in another country, check what exporter identification number or license your government requires.

    Checklist – Home Country Side

    • ✅ Business registration complete
    • ✅ Tax registration (e.g., PAN / VAT / GST as applicable)
    • ✅ Bank account enabled for foreign currency receipts
    • ✅ Exporter code / license obtained
    • ✅ Basic understanding of Incoterms (FOB, CIF, EXW, etc.)

    Step 2: Identify the Product and HS Code

    China, like all WTO members, uses the Harmonized System (HS) for classifying goods. Correct HS classification is critical because it determines:

    • Import duties and taxes
    • Whether special licenses, certificates or inspections are required
    • If any restrictions or bans apply

    Misclassification can lead to fines, delays or even seizure of goods. Transcustoms+1

    Actions

    1. List the exact products you want to export.
    2. Work with your customs broker or freight forwarder to assign the correct HS code.
    3. Check if any China-specific rules apply to that HS code (e.g., food, cosmetics, medical devices, electronics).

    Step 3: Understand Chinese Import Regulations for Your Product

    China’s import rules differ by product category. Some items need special registrations or certificates:

    • Food & beverages – may require registration with GACC (General Administration of Customs of China), Chinese-language labels, and compliance with Chinese food standards. China Briefing+1
    • Cosmetics & health products – often require registration with Chinese authorities and ingredient review. wwbridge-cert.com
    • Electronics, toys, automotive components – many need China Compulsory Certification (CCC) before they can be imported or sold. FedEx
    • Any regulated product – must comply with relevant GB standards (Chinese national standards) for safety, quality, and labelling. ecqa.com

    What to do

    • Ask your buyer in China which licences and certificates they need.
    • Consult a China-focused customs broker or trade consultant.
    • Check if you must modify labelling (Chinese language, ingredients, origin, safety info, etc.). wwbridge-cert.com

    Step 4: Choose the Right Route – General Trade vs Cross-Border E-Commerce

    Broadly, there are two ways foreign goods enter China:

    1. General Trade – traditional bulk import via sea/air freight to Chinese ports.
    2. Cross-Border E-Commerce (CBEC) – selling directly to consumers through approved CBEC platforms and bonded warehouses.

    Both require registration of exporters and importers in China’s customs systems for many categories (especially food and cosmetics). China Briefing+1

    General Trade is best if:

    • You ship large volumes
    • You sell to distributors, wholesalers, or manufacturers
    • Your product is already well-known in China

    CBEC may be better if:

    • You want to test the Chinese market with smaller volumes
    • You sell branded consumer goods (beauty, food supplements, mother & baby, lifestyle, etc.)
    • You want to sell via Tmall Global, JD Worldwide or other cross-border marketplaces (usually through Chinese partners)

    Step 5: Find Buyers and Partners in China

    You generally cannot export to China without a local partner—either:

    • An importer/distributor who handles customs and distribution inside China, or
    • A CBEC platform partner who manages online store, logistics and customer service.

    Ways to find buyers

    • B2B portals: Alibaba.com, Made-in-China, Globalsources, etc.
    • Trade fairs: Canton Fair, SIAL China, various industry-specific expos
    • Chambers of commerce and export promotion councils in your country
    • Existing global customers who have operations in China

    Due diligence

    • Verify the Chinese company’s business license.
    • Check their track record, references, and financial stability.
    • Start with small trial orders and build up.

    Step 6: Prepare Documentation for China-Bound Shipments

    While exact requirements vary by product, typical documents for exports to China include: Cargo From China+3Trade.gov+3SINO Shipping+3

    1. Commercial Invoice
      • Exporter & importer details
      • HS code
      • Description of goods
      • Unit price & total value
      • Currency & payment terms
    2. Packing List
      • Number of cartons, weight, dimensions
      • Detailed packing breakdown
    3. Bill of Lading (B/L) or Air Waybill
      • Issued by the shipping line/airline
      • Proves shipment and is often the title document
    4. Certificate of Origin (CO)
      • Proves where the goods were produced
      • Sometimes required for tariff benefits or regulatory reasons
    5. Insurance Policy or Certificate (for CIF/CIP terms)
    6. Sales Contract or Purchase Order
    7. Special Certificates (if applicable)
      • Health / Phytosanitary certificate (food, agricultural products)
      • Fumigation certificate (wooden packaging)
      • CCC certificate (for regulated products)
      • Test reports, conformity certificates, or inspection reports

    Your Chinese importer will also file a customs declaration with detailed commodity, value, origin and tariff information as per China Customs requirements. english.customs.gov.cn

    Step 7: Finalise Pricing, Incoterms and Payment Terms

    1. Decide Your Incoterm

    Common Incoterms for exports to China:

    • FOB (Free On Board) – you handle costs up to loading at your port; buyer handles freight, insurance, and import clearance.
    • CIF (Cost, Insurance & Freight) – you arrange and pay for main sea freight and insurance up to the Chinese port.
    • DAP/DDP – more responsibility on you (door delivery and sometimes duty paid), but can be attractive for smaller buyers.

    Choose the term based on your bargaining power, risk appetite and logistics capability.

    2. Set Payment Terms

    Because cross-border trade carries risk, many exporters start with:

    • Advance TT (wire transfer) for first orders, then
    • Letter of Credit (LC) or
    • Mixed terms – e.g., 30% advance, 70% on shipment documents.

    Work with your bank to evaluate buyer risk and structure LCs or collection terms properly.

    Step 8: Arrange Logistics and Insurance

    Choose Mode and Route

    • Sea freight is most common for bulk shipments. Major Chinese ports include Shanghai, Ningbo, Shenzhen, Qingdao, Tianjin, and Guangzhou.
    • Air freight is used for high-value or urgent items.

    A good freight forwarder with China experience can:

    • Advise best port and route
    • Book space with shipping lines or airlines
    • Coordinate export customs in your country
    • Assist your buyer with documentation needed for Chinese customs

    Insure Your Shipment

    Always insure at least for the invoice value + 10% (typical practice) and make sure the policy covers:

    • Loss or damage
    • Delay risks, if needed
    • Political or war risks for certain routes

    Step 9: Export Customs Clearance in Your Country

    Your forwarder or customs broker will help you file the export declaration in your country. Using India as an example, the process typically includes: DGFT Content+1

    • Filing the shipping bill/export declaration online
    • Uploading invoice, packing list, and export licenses (if required)
    • Getting customs assessment and examination (if selected)
    • Obtaining Let Export Order (LEO) and clearing the container for loading

    Other countries have similar steps: electronic export declaration, risk-based inspection, and final clearance.

    Step 10: Import Clearance in China

    Once the goods reach the Chinese port:

    1. Your Chinese importer (or their broker) submits a customs declaration with all required documents and HS codes. Trade.gov+1
    2. Customs checks documents, evaluates duties & taxes, and may send goods for CIQ inspection (China Inspection & Quarantine) depending on the product. TJ China Freight
    3. If everything is in order:
      • Duties and VAT are paid
      • Any inspection or testing is completed
      • Cargo is released to the importer

    If labels, certificates or HS classification are wrong, the shipment can be delayed or rejected—so it’s worth double-checking everything before shipment.

    Step 11: After-Sales, Compliance and Relationship Building

    Exporting to China is not a one-time deal; it’s about building a long-term channel.

    • Monitor regulatory changes – Chinese standards and CBEC rules evolve regularly. Subscribe to trade updates or work with a specialist consultant. ecqa.com+1
    • Keep documentation archived for several years (often 5+), as both your local and Chinese authorities may request it. airwavesexport.com
    • Invest in relationships – regular visits, WeChat communication, and quick after-sales support go a long way in China.

    Quick Recap: Step-by-Step Checklist

    1. Prepare your export basics – business registration, exporter code, bank setup. DGFT+1
    2. Identify product & HS code and confirm if it’s allowed and under what conditions in China. Transcustoms+1
    3. Study Chinese regulations and special approvals (GACC, CCC, GB standards, labelling, etc.). ecqa.com+2wwbridge-cert.com+2
    4. Select route – general trade vs cross-border e-commerce. China Briefing+1
    5. Find reliable buyers/importers and sign clear contracts.
    6. Prepare documents – invoice, packing list, B/L, certificate of origin, licenses and certificates. airwavesexport.com+3Trade.gov+3SINO Shipping+3
    7. Agree on Incoterms & payment (FOB/CIF, LC/TT).
    8. Arrange logistics & insurance with a China-experienced forwarder.
    9. Clear export customs in your own country. DGFT Content+1
    10. Support your importer during Chinese customs clearance and inspections. Trade.gov+2airwavesexport.com+2

  • How to Import from China to India: A Complete Step-by-Step Guide (2026)

    Importing products from China can be a profitable opportunity due to competitive prices, product variety, and reliable supply chains. However, the process can seem complex if you’re starting out.
    This guide breaks down the entire China-to-India import process into clear, actionable steps you can follow with confidence.

    Step 1: Understand What You Want to Import

    Before anything else, decide:

    • The product
    • The specifications
    • Your target selling price
    • Market demand in India

    Also check if your product falls under restricted, banned, or licensed items under DGFT (Directorate General of Foreign Trade) guidelines.

    Step 2: Find Reliable Suppliers

    Popular platforms to find trusted suppliers from China:

    • Alibaba
    • Made-in-China
    • Global Sources
    • 1688 (requires agent for communication)

    Tips to verify suppliers:

    • Check business license and certifications
    • Request product samples
    • Verify trade assurance
    • Look for factories, not just trading companies

    Step 3: Request a Quotation (RFQ)

    Ask suppliers for:

    • Product price
    • Minimum Order Quantity (MOQ)
    • Sample cost
    • Packaging details
    • Lead time
    • Shipping terms (FOB, EXW, CIF, DDP, etc.)

    Step 4: Negotiate Using Incoterms

    Common incoterms for imports:

    • FOB (Free On Board): Supplier delivers goods to port; you handle freight + customs
    • CIF (Cost, Insurance & Freight): Freight + insurance included
    • DDP (Delivered Duty Paid): Supplier handles everything until delivery to your address

    Beginners often prefer DDP as it simplifies the process.

    Step 5: Order Samples

    Never import in bulk before testing:

    • Product quality
    • Packaging
    • Functionality
    • Compliance

    Evaluate and approve before placing a bulk order.

    Step 6: Finalize Payment Terms

    Common payment methods:

    • Bank Transfer (T/T)
    • Alibaba Trade Assurance
    • PayPal (for samples)
    • Letter of Credit (for large orders)

    Avoid 100% upfront payments. Standard practice:

    • 30% advance
    • 70% before shipment (after inspection)

    Step 7: Arrange Quality Inspection

    You can hire third-party inspection agencies:

    • SGS
    • TUV
    • Bureau Veritas
    • AsiaInspection (QIMA)

    Inspection helps ensure:

    • Quality consistency
    • Correct quantities
    • Proper packaging and labeling

    Step 8: Choose Shipping Method

    Depending on urgency and budget:

    1. Express Shipping (Fastest)

    Courier companies:

    • DHL, FedEx, UPS
      Delivery: 5–8 days
      Best for: Samples and small parcels

    2. Air Freight

    Delivery: 7–12 days
    Cost: Medium
    Best for: 45–200 kg loads

    3. Sea Freight (Most Economical)

    Delivery: 20–35 days
    Best for: Bulk shipments
    Two options:

    • FCL (Full Container Load)
    • LCL (Less than Container Load)

    Step 9: Prepare Required Documents

    Key documents needed for customs in India:

    • Commercial Invoice
    • Packing List
    • Bill of Lading / AWB
    • Certificate of Origin
    • Purchase Order / Contract
    • Importer Exporter Code (IEC)
    • Insurance Certificate
    • Bill of Entry (filed by CHA)

    Optional (based on product):

    • BIS Certificate
    • FSSAI License
    • Phytosanitary/health certificate

    Step 10: Customs Clearance in India

    Your CHA (Customs House Agent) handles:

    1. Filing Bill of Entry
    2. Customs Assessment
    3. Duty Payment
    4. Examination if required
    5. Goods Release Order

    Import Duties you may need to pay:

    • Basic Customs Duty (BCD)
    • IGST
    • Social Welfare Surcharge
    • Anti-dumping duties (if applicable)

    Rates vary by product HS code.

    Step 11: Delivery to Your Warehouse

    Once cleared, goods are:

    • Picked up from port
    • Transported to your warehouse
    • Inventoried and prepared for sale

    If you used DDP shipping, this step is usually included.

    Step 12: Start Selling

    Now your products are ready for:

    • Amazon FBA
    • Flipkart
    • Retail stores
    • Your own website
    • Wholesale distribution

    Track inventory, profit margins, and customer feedback closely.

    Conclusion

    Importing from China to India is not difficult once you understand the step-by-step process. With the right supplier, proper documentation, and reliable logistics partners, you can build a profitable import business with minimal risk.