From a financial point of view, 2021 is the year of resilience. When the nation was affected by Covid second wave, everybody thought everything is lost.
But soon, the financial world picked itself up and there was a kind of stability in the field. So, let’s rewind crucial events from the financial world, especially from the personal finance sector.
Firstly, there was no hike in the REPO rates. The hike was something everyone in the financial field was nervous about. Fortunately, the hike did not happen, with loan interest rates at the lowest level. Even banks also helped in this trend.
Then there was the relief from the 2021 Union budget. From a personal finance point of view, there was an extension in the last date of u/s 80EEA of the Income Tax Act to avail tax benefits. For senior citizens, there was relaxation in filing income tax.
Even though the pandemic threat was flying right over the market, the equity market reached an all-time high this year. Except in a few cases, the market was strong. A record number of people opened Demat accounts, while those who stayed saw profits.
The FD rates remained stable throughout the year. It has one main concern, which is the high inflation rate.
While the negative real rate of return made investors without an appetite for risk turn to alternatives. Even now such investors should not invest for the long term.
Another thing that was stable last year was gold prices. Gold is a good hedge against inflation but its price is range-bound. Another change in this field is the gold hallmarking. Gold investment choices moved from physical to SGB and gold ETFs.
Then there is the trend of BNPL. Many companies are into this new field, and consumers who are struggling to recover are using it for relief. But BNPL has the risk of being the present form of instalments, if not used wisely will sink the users into debt.
Not everything was stable, which was evident in the case of cryptocurrency. There was a huge spike in cryptocurrency users in India last year.
The Indian financial bodies always kept their distance from it, with the government only planning to release a bill about it.
Then there is the Retail Direct Scheme of RBI, through which a retail investor can buy and sell government bonds. Then there is the auto-debit rule, which mandates that there will be no automatic recurring payment for various services.
The Income Tax Department launched its new website to simplify tax filing, ensuring seamless tax services.
Then the date for linking UAN with Aadhaar was extended, to December 31, 2021. The government declared a tax on PF Fund contributions.
To make the KYC procedure easier for the banks, the RBI relaxed its KYC norms and announced that Video-KYC will be considered for all new accounts as new KYC.
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