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Can a government employee lend money on interest?
You can borrow up to Rs. 25 lakhs under the facility of personal loan for government employees. Attractive rate of interest starting at 11.99\%.
Can an employer charge interest on a loan?
Generally, your employer cannot charge interest on your loan. You might be required to cover some administrative and record keeping costs caused by the advance, but in most cases your employer cannot profit from this arrangement. Your employer, however, could recoup the loan balance from your final paycheck.
Is government giving interest free loan?
The Finance Ministry has decided to provide an additional amount of up to ₹15,000 crore to States as an interest-free 50-year loan for spending on capital projects.
Can I take a loan from the government?
Government loans are either direct loans or guaranteed loans. With a direct loan, you’re borrowing money directly from a government agency. All loan payments will be made to pay back the government. With a guaranteed loan, you’re borrowing money from a private government-approved lender.
Can employees give interest-free loans to employees?
An employer may offer a cheap or interest-free loan to an employee, for example to cover the purchase of a season ticket, to meet welfare expenses or in the case of financial hardship.
Is interest required on a loan?
Minimum-interest rules refer to a law that requires that a minimum rate of interest be charged on any loan transaction between two parties. The minimum-interest rules mandate that even if the lender charges no rate, an arbitrary rate will be automatically imposed upon the loan.
Is interest-free loan taxable?
Similarly, an interest-free or concessional loan provided by an employer is taxable as a ‘perquisite’ for an employee. Therefore, the employer should deduct tax at source (TDS) on the interest chargeable on the loan, as part of the employees’ salary.
What is the interest rate on direct unsubsidized loans?
The current interest rates (first disbursed on or after July 1, 2021, and before July 1, 2022) for Direct Subsidized and Direct Unsubsidized Loans are 3.73\% (Undergraduate Student) and 5.28\% (Graduate or Professional Student). The interest rates are fixed for the life of the loan.
How do employee loan interest rates work?
However, employee loan interest rates are usually a small fee to cover the cost of administering the loan program, and any tax liabilities the employer may incur. The employee pays back the loan in accordance with the repayment schedule typically via deductions in their future paychecks.
How to get a government loan in India?
Check your Eligibility! Government employees can avail loans from banks such as Oriental Bank of Commerce, HDFC Bank, Axis Bank, and State Bank of India for interest rates starting from as low as 10.6\% p.a. While Union Bank of India levies no processing charges, a few others levy 0.5\% to 3.99\% of the loan amount as processing charges.
Which personal loan products are available for government employees in India?
Some of the personal loan products available for government employees in India are listed as follows: State Bank of India State Bank of India (SBI) offers a special interest rate for defence personnel in the country, under the Xpress Credit personal loan scheme.
When is the amount of foregone interest transferred to the employee?
If the loan is a term loan, the amount of the foregone interest is considered to be transferred to the employee as of the date of the loan, with the result that the employee’s taxable compensation would increase as of the date on which the loan is made.