Are you holding shares or mutual fund units for your long-term financial goals? During a financial emergency, instead of selling a part of your investment, pledge it and take a loan against it. Pledging of shares/mutual fund units for a loan has benefits over selling them. Let us understand what is pledging, the process, and its benefits over selling the investments.

What is share pledging?

Pledging is the process of committing shares held by an individual in favour of another person/organisation as a security. The person holding the shares is known as the pledgor. The person in whose favour the shares are pledged is known as the pledgee.

For example, Ishita holds 100 TCS shares. She wants to take a Rs. 1 lakh loan against the TCS shares from HDFC Bank. In this case, Ishita is the pledgor, and HDFC Bank is the pledgee, wherein Ishita is offering TCS shares as security/collateral to HDFC Bank to take a loan against the shares.

Once you pledge the shares in favour of the bank/NBFC and complete the remaining loan formalities, the loan amount will be approved.

How much loan can you get?

It is important to note that you will not get 100% of the value of shares or mutual fund units as the loan amount. For shares and equity mutual fund units, financial institutions can give a loan of up to 50% of the value of the securities pledged. Equity shares and equity mutual funds are volatile in the short term and vulnerable to big falls. Hence, the financial institution may keep a margin of safety of 50% to protect itself from the fall in the security price.

For debt mutual fund units, you may get a loan of up to 80% of the value of the securities pledged. As debt securities and debt mutual funds are relatively more stable than equities, the financial institution keeps a lower margin of safety than equities. Hence, you can get a bigger loan by pledging these securities as collateral.

Every bank/NBFC has a minimum and maximum loan amount offered under the "loan against securities (LAS)" product. Check the various fees involved like processing fee, stamp duty, annual renewal charges, interest rate, etc.

How does the loan repayment happen?

The loan is offered in the form of an overdraft. You will have a specified credit limit from which you can withdraw the money. The interest is charged only on the amount used. For example, Ishita takes a loan of Rs. 1 lakh. She will be charged interest every month on the amount utilised and for the number of days utilised. The partial or full repayment can be made at any time without any penalty.

As a loan against shares/mutual fund units is a secured loan, the interest rate charged on it is lower than unsecured loans like personal loans. The tenure of the loan is one year. It can be renewed every year.

How to create and remove a pledge?

You (pledgor) will have to initiate a pledge by raising a request with your Depository Participant (DP). Once the DP processes the request, the lender (pledgee) must confirm it. On confirmation, the pledge will be created. The shares/mutual fund units offered as security will be blocked. The pledgor cannot sell them until the pledge is removed.

On the loan repayment, the pledgor will have to initiate a request to close the pledge with its DP. The request will be forwarded to the pledgee. The pledge has to confirm the pledge closure request. Alternatively, the pledgee can close the pledge request directly even before the pledgor initiates the closure request. Once the pledge is closed, the block on the shares will be removed. The pledgor is then free to deal with the securities as they wish, including selling them if required

Sometimes, a pledgor may want to change the securities/mutual fund units offered as security. For example, Ishita, who has provided TCS shares as security to HDFC Bank, may want to change the securities collateral to Reliance Industries shares. The change of securities offered in a pledge is possible, if the pledgor allows. In that case, a new pledge will have to be initiated for Reliance Industries shares, and the pledge for TCS shares will have to be closed.

What is the benefit of pledging shares?

When you pledge shares in favour of the financial institution, you continue to remain the owner. You will get all the corporate benefits from the company like dividends, bonus shares, etc. You can exercise your voting rights and will also benefit from the rise in the share price.

Some financial institutions like Mirae Asset Financial Services have built a 100% digital process for loans against shares. The borrower can complete the entire process and get the loan amount on the same day. No need to visit the branch for physical form filling and submitting documents.

What happens if the borrower is unable to repay the loan?

If the pledgor is unable to repay the loan, the financial institution can sell the shares and recover the loan amount. Hence, it makes sense for the borrower to repay the loan to retain the shares offered as collateral.

Pledging shares is a win-win for both parties. The pledgor continues to own the shares and get corporate benefits. The pledgee gets a security for the money lent.

Use share pledging to your advantage

In a financial emergency, instead of selling your shares, use them as collateral to take a loan against them. You can do that by pledging them with a financial institution. You will get a loan at competitive interest rates. The interest has to be paid only on the amount utilised. You will continue to own the share and will get the corporate benefits. Thus, you can make the most of your shares by pledging them for a loan during financial emergencies.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached at LinkedIn.

I am working with a US based company on an H-1B visa for the past six years. I am getting married next month August 2025 and immediately plan to relocate permanently to India. I plan to continue working for the same US company in India, but in the capacity of an independent consultant based out of India. In these six years, I have spent a maximum of month in India during my visits. After I start working from India, will I be taxed on consultancy income that I will receive from the US company?
- Name withheld on request

If you move back to India in August 2025 and stay for at least 182 days during the financial year (April 2025 to March 2026), you’ll qualify as a resident under Indian tax law.

However, to determine whether you are an ‘ordinary resident’ or not, the law stipulates that an individual is classified as a ‘resident but not ordinarily resident’ (RNOR) if their total stay in India during the preceding seven financial years is less than or equal to 729 days. 

Given that you have spent less than a month in India each year over the past six years, your cumulative presence in India will not exceed this threshold. Accordingly, you will be treated as an RNOR for FY 2025–26 under Indian tax law.

An individual classified as an RNOR is liable to tax in India only on income that: 

• is received or deemed to be received in India; 
• accrues or arises in India; or 
• is deemed to accrue or arise in India. 

Also read: How is foreign rental income taxed in India?

Income earned and accrued outside India is not taxable in India unless it is derived from a business controlled from or a profession set up in India. 

India-sourced income

Since you will be rendering consultancy services from India, even if such services are provided to an overseas entity, the income will be considered to accrue in India and will, therefore, be taxable in India. However, any employment income earned in the US  prior to your permanent return to India will not be subject to Indian tax for FY 2025-26.

Any salary earned in the US before your move will not be taxed in India.

For US tax purposes, you can file a dual-status return for calendar year 2025. This means:

• You’ll be taxed as a US resident up to your departure date,
• And as a non-resident for the rest of the year (i.e. until 31 December 2025), after you move to India.  

Consequently, you would not be subject to US taxation on a worldwide basis for the period following your departure, when you are treated as a non-resident alien.

As a non-resident alien, consultancy income earned for services performed outside the US is generally not taxable in the US. Furthermore, under the India-USA Double Taxation Avoidance Agreement (DTAA), if your consultancy income does not qualify as ‘fees for included services’ and you do not have a fixed base in the US, such income shall be taxable only in India, being your country of residence.

Also read: What are the Indian tax rules for NRIs selling bonds?

Harshal Bhuta is partner at P. R. Bhuta & Co. CAs

With the September 15, 2025 tax filing deadline approaching slowly but surely, many taxpayers in the country are looking to cut liabilities under the old regime. To ensure that this goal is achieved, efficient planning is essential.

Do keep in mind that key documents such as Form 16, Annual Information Statement (AIS), and Taxpayer Information Statement (TIS) simplify this entire process by capturing income and Tax Deducted at Source (TDS) details.

Furthermore, to facilitate the same process and help in boosting savings of taxpayers, the Income Tax Act provides several deductions for both salaried and self employed individuals. Here are ten commonly claimed sections to help you file smarter and save more.

1. Section 80C

This particular section permits deductions of up to ₹1.5 lakhs on an annual basis. Eligibility investments include Employee Provident Fund (EPF), Public Provident Fund (PPF), life insurance premiums, Equity Linked Savings Schemes (ELSS), five year tax saving fixed deposits along with National Savings Certificates (NSC).

2. Section 80CCC

Under this section, contributions which are made to pension plans provided by insurance companies qualify for deductions. It formulates part of the overall ₹1.5 lakh limit under Section 80C. Due to the same it provides another avenue that tax payers can explore and utilise to maximise their tax savings.

3. Section 80CCD(1)

This section provides cover to individual contributions that are made to the National Pension System (NPS). Both salaried and self employed individuals can claim deductions within the combined 80C ceiling. To ensure maximum benefits from this section it will be prudent for tax payers to discuss their savings strategy with a certified financial advisor.

4. Section 80CCD(1B)

Taxpayers can go on and claim an additional ₹50,000 exclusively for NPS contributions under this particular section. Do remember, this claim will be over and above the Section 80C cap. This helps in ensuring that NPS remains one of the few tax saving instruments which is available under both the old and new regimes, providing long term retirement benefits along with immediate advantages in tax for contributors.

5. Section 80D

Under this particular provision, deductions for health insurance premiums are available up to ₹25,000 for self and family, not only this, there is a provision of ₹50,000 for senior citizen parents as well. Prevention health scans and checkup are permitted within this limit, up to ₹5,000.

6. Section 80DD

The expenses on the care of a dependent with a disability qualifies for deduction under this legal provision. ₹75,000 is the limit for regular disabilities along with ₹1.25 lakhs for severe and serious conditions.

7. Section 80E

The interest paid on education loans for higher studies can be requested for and claimed as a deduction under this section. This benefit can be claimed for up to eight consecutive years, with no upper limit on the total amount. Hence, the efficient and planned use of this section can help aspiring students to propel their educational journey and transform themselves into successful professionals.

8. Section 80EE

First time home buyers can avail the benefit of this section by claiming a deduction of up to ₹50,000 annually on interest paid for a particular home loan. This is subject to conditions on loan size and the value of the property.

9. Section 24(b)

The interest payments on housing loans for self occupied properties are deductible for up to ₹2 lakhs annually. Furthermore, for let out or rented properties the entire interest amount may be claimed. This section goes a long way to helping save interest payments on housing loans.

10. Section 80G

This section permits tax deductions on donations made to approved charitable institutions, with eligible deductions being either 50% or 100% of the contributions based on the approval provided by the organisation.

For all personal finance updates, visit here.

Disclaimer: This article is for informational purposes only and does not constitute tax or financial advice. Readers are advised to consult a qualified tax professional for personalised guidance.

In a shocking development, a case has been registered against Ajay Kerkar, promoter of the once-prominent travel company Cox & Kings, along with other senior officials, for allegedly defrauding SBI Cards and Payment Services of ₹105 crore, reported PTI.

According to reports, the accused forged financial statements to misrepresent the company’s financial health and obtained corporate credit card facilities under false pretenses. The fraud reportedly occurred between April 2012 and June 2019, and the company failed to repay its dues, causing a massive loss to SBI Cards.

The First Information Report (FIR) was filed by a senior legal manager from SBI Cards at Andheri Police Station, Mumbai, and the case has now been transferred to the Economic Offences Wing (EOW) for detailed investigation.

While this fraud was committed at a corporate level, it serves as a stark reminder that even well-known companies can misuse financial systems. For individuals, it underscores the importance of staying alert and protecting oneself from credit card fraud—a threat that continues to evolve in complexity.

Key ways to protect yourself from credit card frauds

1. Review your credit card statements regularly: Always check your monthly credit card statements for any unauthorised or suspicious transactions. Early detection helps minimise losses and allows your bank to quickly initiate dispute resolution procedures.

2. Enable instant transaction alerts: Set up SMS or email alerts for every credit card transaction. These real-time notifications help you detect fraud as it happens. If you spot a transaction you didn’t authorise, contact your bank’s fraud hotline immediately.

3. Avoid sharing card details or OTPs: Never share your credit card number, CVV, expiry date, or OTP over the phone, email, or SMS—even if the request seems genuine. No bank or official agency will ever ask for such details unsolicited.

4. Use your credit card only on secure platforms: Do ensure that any website you use for transactions is secure (look for ‘https’ in the URL). Avoid using public Wi-Fi for online payments and do not save your card information on shopping platforms to reduce exposure to breaches.

5. Check your credit report regularly: A credit report can reveal if someone has taken a loan or credit card in your name without your knowledge. Reviewing it every few months helps you maintain a healthy credit profile and identify any fraudulent activity early.

The Cox & Kings case highlights that even reputed companies can misuse financial systems. This refers to the former Cox & Kings. With credit card frauds on the rise, personal vigilance is your strongest defense. Monitor your finances, secure your data, and act promptly at the first sign of trouble to protect your credit profile and financial well-being.

For all personal finance updates, visit here.

Disclaimer: This article is for informational purposes only and should not be considered legal or financial advice. Please consult a professional before making any financial decisions. Readers are encouraged to report any suspected fraud to their bank or credit bureau immediately.

EPF members keenly await the interest credit by the Employees' Provident Fund Organisation (EPFO) every financial year. But EPFO often delays crediting it, throwing many into tax trouble.

To be sure, if your contribution to EPF is more than ₹2.5 lakh in a year ( ₹5 lakh for government employees), the interest earned on the excess attracts tax deducted at source (TDS). The TDS rate is 10% if your EPF account is linked to your Permanent Account Number (PAN) and 20% if it is not. The TDS is not deducted in case taxable interest is less than ₹5,000.

Why the tax confusion?

The delay in crediting interest to EPF accounts creates confusion for members about the correct financial year in which to report and pay tax on the taxable interest. Although the EPFO passbook reflects that interest has accrued up to 31 March of a financial year, the interest is actually credited the following year. For instance, interest for FY25 wasn’t credited by 31 March 2025; the government only approved the FY25 interest rate in May 2025. Some subscribers have received interest credit in the past couple of weeks, that is, in FY26.

"Since the interest was credited in FY26, any TDS on the taxable portion will also apply in FY26, and this will be reflected in Form 26AS and the annual information statement (AIS)," said chartered accountant Ashish Karundia. “If a member, based on the passbook entry, includes the taxable interest in their FY25 income tax return, it could lead to issues in FY26 due to a mismatch.”

Karundia added, “There is an option in the AIS to submit feedback, indicating that the TDS pertains to interest income from the previous year, and that tax has already been paid. The system will notify the EPFO, but it’s unlikely they will revise the TDS return. This will still lead to a mismatch between the ITR and AIS/26AS, and the taxpayer may receive a notice for not paying tax on interest income in FY26.”

Here's what to do

Tax experts said you should pay tax on the taxable PF interest on a credit basis, that is, in the year the EPFO credited the interest and deducted TDS. Do not do it on an accrual basis, meaning don't pay tax on the delayed interest credit you received for FY25 while filing your ITR this year. Do it next year, for income earned in FY26. This will help avoid a tax mismatch and unnecessary back-and-forth with the Income Tax Department and EPFO.

Mint's take

You may find it easier to report EPF interest on a credit basis rather than accrual basis. For its part, the EPFO should declare and credit interest rate (and get it approved by the union government) for a particular financial year in that year itself. Doing it in the subsequent financial year and deducting TDS accordingly creates confusion for EPF members.