How Delay in Land Registration Costed Rs 50 lacs to Vivek – Real Life Experience

I want to share a real-life incident. One of my friend Vivek told me how he lost Rs 50 lacs worth of Land in one shot because his grandfather made a mistake of not doing land registration on time and kept delaying it for so long, that it was finally too late. It was just an irresponsible attitude towards documentation. The funny part is that no one in the family knew about this except his grandfather and these guys only came to know about it and were shocked by the incident. Vivek’s Grandfather lived near Varanasi and had always believed that the money should be invested in land and properties, Its the only way to grow your money faster and there is no risk in it.

Whenever he has any chunk of money, he just used to buy land with a future vision that one day it will be useful and give good returns and help his big family and so many children and grandchildren. This was during the 1960’s and ’70s. So once, he bought a big plot near Varanasi. You might be aware of how in villages and small cities, most of the work is done on relationships and verbally. Someone’s word is taken as promise and that was a time when people were not that bad like today:), hence things went smoothly, especially in those days and in a situation where everyone knows everyone.

Land Registration In India - Mistakes and Real Life Experience

So he bought land from one of the known people who lived very near to their home. e paid the money and bought the land (everything verbally).

It was a normal incident.

Their point was “Documentation will happen in a few days/weeks” . Both parties were fine with this, as the world was not going to end and there was ample time to things. Grandfather also started construction on the land and things started moving. No attention to proper documentation and registration even after many weeks and months. The land registration fees was also not that high. Few people kept reminding Vivek’s grandfather that Land registration is still incomplete and it has to be done. But he kept on delaying it as he was over-optimistic and never felt that anything can go wrong. He over-trusted the people around him.

From Future to Now

40 yrs are gone. Grandfather is no more, The guy from whom he had bought the land is also not in this world, he was a good guy. Grandfather’s vast properties were divided between his children (obviously daughters didn’t know that they are also legal heirs and claim their share as per Hindu Succession law). Now the guy who had sold his land took the money and is dead now, his children one day found out the property papers and saw that it’s on their father’s name.

You know what happened next.

They knew this is a bloody awesome situation and gave Vivek and his brother a choice. Either give 50% of the property back (without much fuss and delay) or 100% property with a court case. They knew the other party is totally weak (100% weak) from the documentation angle and legally they can not do anything. The proof that “land was sold and money was paid” does not exist anywhere. Knowing how badly they are stuck with this situation, Vivek and his brother had to hand over 50% of the property to these people else they could have lost everything. The land cost was approx Rs 1 crore and the 50% part was worth Rs 50 lacs in today’s standards.

What is Land/Property Registration and Why is it Necessary?

Land or Property Registration refers to the registration to document changes in ownership and transactions involving immovable property. Whenever you buy a piece of land/immovable property, you need to register the same with the authority concerned, so that a legal ownership title is guaranteed to you. This greatly reduces the risk of fraud and helps solve disputes easily, in addition to creating and maintaining an up-to-date public record. While Land Or Property registration is not that easy, still there are some measures being taken for making property and Land registrations easy in recent times. Also, the registration process depends and varies from state to state, you can get the information about some state here

Is your Land Registration Complete?

A lot of instances like this happen in our life also. We make payments to people and do transactions and make promises verbally. If anything happens to us in between, neither there is any track or it, nor any information about it, our family will never be able to find out what happened, in fact they will not even know that “it happened” . So always refrain from doing anything which is not backed up by supporting documentation. Never!

Especially on the Real estate part, check if the documents are totally in place, see it from “What if I am not there” angle! Do you have any experiences like the above-mentioned example? Do you know someone who has not completed his Land Registration of Property Registration?

Wife gets 50% share in husband’s property after divorce – India Law

Do you love your wife? You better do!

There were few changes proposed weeks back in the marriage laws in India, which everybody should be aware about. A bill called “Marriage Law’s (Amendment) Bill 2010” was passed by the cabinet, which is pending for discussion in Rajya Sabha and some major changes in the women’s rights are suggested, on how the properties would be divided after divorce.

Women Rights in husband property after divorce - India Law

The biggest change says – “As per new Divorce law, Wife share in property would be 50% in all her husband’s residential properties, no matter what and in other properties, her share will be decided as per the court decision.

Wife share in property owned by the husband would be 50%

Earlier, before this change – a woman was entitled to a share in husband’s properties, but there was no quantum defined as per law, it would be any percentage depending on the case, but now with this suggested change, a women will enjoy equal sharing without any condition in all the residential properties owned by husband. But in this case, women will have to specifically apply for her share, she should be aware of this law about “50% share”.

A major change in this amendment is that this rule is applicable to all the properties of the husband acquired before and after the marriage, whereas the earlier law made sure that the wife gets share only in those properties which are acquired by her husband only after marriage. Now men stand to lose on this front, in-case things are so sour with the wife.

Husband & Wife joint holder’s in a residential property

You should be clear by now, what will happen in the case where a property is registered in the joint names of husband and wife. A lot of couples register a house in joint names, a lot of times both pay’s from their respective salaries, and in some cases, only one party pays (generally husband). Imagine divorce happens – Who will get how much? Women will keep her 50% part and she will also get half of her husband share in the house, so 75% wife and 25% husband.

Rights of women after divorce on other properties in India?

Apart from the mandatory 50% share in husband’s residential properties, the wife will also be entitled to get a share in another kind of properties, but the quantum is not set, as per the Bill, it will depend on “living standard of the wife”

Waiver of six months cooling period possible

As per the old Indian law which governed the division of assets for women after divorce, it was mandatory for husband and wife to spend at least 6 months together before applying for divorce, but with this new amendment bill, there are provisions of waiving off the 6 months cool off period or lessen it, but only if both husband and wife want it. This means if one of the spouses wants to get divorce on an “urgent basis” , but other does not, it will not be possible. This is one of the major change in the bill and will help those couples who do not want to serve that “6 months” cool off period of living together.

Is this an anti-male law?

A lot of groups have termed this change as anti-marriage and anti-male law and critically oppose it, they have termed it as a bill totally against males and illogical. The major issues with the amendment are as follows

  • The bill talks about only the division of Husband Properties, but not wife’s properties. So in-case women are at fault, still, she will get a 50% share in husband property, but her share of the property will not be divided.
  • A major disappointment for men in this bill is that even the “person at fault” can apply for getting the share of property, and the other party will have to respond to it. Generally as per old law’s when mutual consent was not there, the victim applies for the property share and the person who is the “bad person” has to respond to it. Now with his law change, his wife can seek a divorce and ask for a share in the property.
  • There are concerns raised like this law will encourage more divorces are women can get hold of property easily for sure.

Now there are some serious concerns due to these changes. If a husband has one residential property, old parents who are financially dependent on him and there is a divorce between husband and wife, the wife could take 50% share, in which case the men will be left with 50% property, this seems very unjustified. What is the woman already owned 2 more properties on her name? She has nothing to worry about!

One serious drawback of this law is that some men, who are undergoing a bad phase of marriage, may convert their residential properties into immovable assets, or just transfer it on other names to save themselves from parting away with 50% share in the worst case.


While there are cases where women are deprived of their share in wealth at the time of divorce in India and there was a requirement of strong laws which focuses on rights of women in case of divorce in India, this amendment seems to have gone beyond what it wanted and has loopholes which can be exploited by women. With due respect to each gender, it would be great if there would have been some balanced law, and some thought should have gone for the worst cases.

To summarize things, here are the take away’s from the changes made in marriage laws.

  • In the case of divorce, Woman will have 50% share in the residential property of a man
  •  The wife will have to take the initiative of seeking her share in such cases.
  •  Women and children will also have rights in the other assets of man, which will be decided by court
  •  It does not matter if the property was acquired by before or after the marriage

What do you think about this amendment? Do you also feel its too anti-male but only designed keeping women in mind? Do you feel its correct to keep a 50% share for wife in husband’s property in case of divorce as per law in India? Note that the bill still needs to be passed and right now only the cabinet has passed the changes. It is yet to become a law after getting passed in both houses.

Note: The information provided in this article is based on various media articles and the exact circular could not be found out. Also, the bill still needs to be passed, only then it will become an act finally and will be implemented.

6 type of Portfolio Diversification – Meaning & Strategies

A lot of people with high net worth still do not understand Portfolio Diversification. They made good money, their investments have zoomed over the years and they feel that they have understood the mantra for growing wealth. However, an important parameter to look at is “Diversification”. How much diversified you are in your overall financial life? Let us understand what strategies we can adopt for diversification of portfolio, but let’s look at 2 examples to understand the problem first.

Example 1

Let’s look at Ajay’s example – whose net-worth has is 4 crores overall, but 3.5 crores are in just one flat in Mumbai. What can go wrong? There can be several events which can affect Ajay, An earthquake in Mumbai can come someday, prices may suddenly take a hit (if not today, maybe in future, Ajay might come to know someday that the quality of material used is not good, Liquidity issues etc etc

Example 2 

Robert has successfully grown his net-worth to Rs 15 lacs in just 3 yrs, but the issue is that most of these 15 lacs in concentrated into a single mutual fund called HDFC Top 200. What can go wrong ? – The equity markets can see one of the biggest fall just 3 years before Robert needs the money, The stocks picked by the funds can do exceptionally bad, the fund manager might take wrong decisions in a row, The expense ratio increases and you don’t know its hurting you badly from many years etc etc.

While these are hypothetical examples, you must have got a good idea of what I want to say here. A portfolio extremely skewed on one side can be extremely dangerous, maybe the chances of risk are low, but still, it can occur.

Diversification in Personal Finance

6 types of Portfolio Diversification

Asset allocation is a word that describes how well are your assets allocated across various asset classes and you do it with diversification! A lot of people feel that just because they have invested in 10 mutual funds, they have diversified their investments, but portfolio diversification is achieved at different levels. In my book Jagoinvestor, In the last chapter I talk about the simplicity of Financial life and show how 3 mutual funds are not too much different than 5 mutual funds in equity diversified category, Their underlying investments (large-cap stocks, mid-cap, the concentration of the largest stock) are pretty much exact same. Now Let’s see some of the types of Portfolio Diversification

1. Across Asset Class

You might want to diversify your investments in different asset classes like equity (mutual funds, stocks), Real estate, Debt products, commodities like gold, silver and finally Cash. It’s important to do this kind of diversification if you are not an expert in one asset class and can not handle it fully.

2. Within Asset Class

When you invest your money in one asset class but in different kinds of instruments or companies, you are diversifying it across various instruments of the same types. A very simple example is opening Fixed Deposits in various banks. If you had to open a 10 lacs FD, the chances are you will choose 4 banks and put 2.5 lacs in each rather than doing it for 10 lacs in just one bank. In the same way someone investing in 5 different equity mutual funds. While the underlying asset class is exactly the same (equities), but still some kind of diversification is there (different fund managers handling it).

3. Geography Wise

Then you can diversify location wise or geography-wise. You can invest in real estate in India, US, UK .. You can also invest in real estate across different cities within India. You can buy stocks in the Indian stock market, US stock markets, and other countries too. The idea is to take advantage of currency fluctuations too, but this is only for experts who understand that.

4. Across Capitalization

When you invest in mutual funds, you can choose to invest in small-cap funds, large-cap funds, extra large-cap funds, small companies, big companies, etc, etc. Note that the risk and return potential will be different and anyways you will invest in different companies.

5. Across Time

Your investments can be across time also, like long term investments, short term investments, medium-term investments, You can have a 5 yrs deposit, 2 yrs deposit and 6 months deposit as well. Imagine if you have done 5 yrs deposits only – which can affect your liquidity

6. Across Style

There can be diversification across styles – You can invest in products giving you fixed income, or which are just for growth purpose. You can invest in something that has value investing principles or more speculative ideas.

Can you think about more kind of diversification or any other benefits for portfolio diversification?

What about Over diversification?

Should you diversify in all ways? Definitely not. The above ideas are just to show you how many kind of diversifications can be there, you should not overdo it and try to incorporate all kind of diversifications in your financial portfolio. Just see how much makes sense in your case and properly access how much you need it.

If you look at your current portfolio, Many many marks out of 10 will you give on the parameter of “Portfolio Diversification” or “Asset Allocation”?

Shocking ! – Job Rejection due to Bad CIBIL Report

Your credit score is going to affect your Employment. You can face job rejection due to it! Yes – that’s happening already. A lot of companies especially Finance and Software Companies have started asking candidates to present their CIBIL report and score (or any other credit report) at the time of the interview and it has started playing a role while selecting a candidate. So if your credit report is bad because you have not paid your loans on time or if you settled your loans in past, you might get rejected in your next job interview provided your prospective employers look at your cibil report/score. Note that it’s standard practice internationally to check credit score before employment and various other purposes.

Employers looking at cibil report at job interviews

3 Real-Life Example of Job Rejection due to Bad Cibil Report

I am sharing with you 2 real-life example’s where credit report was asked before the interview and they were eventually rejected (there can be other parameters for rejection apart from the bad credit report)

Example #1 – How Sapan has rejected a job in HDFC

Sapan a reader of this blog faced job rejection twice by HDFC Bank and an NBFC just because there was a credit card dispute on his credit report and he could not convince them that it was his fault.

I lost the Job twice in HDFC Bank even after got selected for Relationship Manager but rejected by HR team because of my credit card dispute which was stolen and unauthorized transaction took place of 50000/-. In the end of the day I was failed to convince the HR team and I was forcefully to pay 50000/- and got a job in one of the NBFC which also checked my CIBIL before getting job. – from facebook comments below

Example #2 – Rejection by Indian company for a Bad Credit Report from the US

Even those who are coming from US to India and looking for Jobs, employers are asking their US credit score – Here is an incident which happened with Nandish’s friend, this sharing was from Nandish

He was in US for almost 8 yrs. During that time he created a lot of debt for himself. His job transfer got him back in India, he knew his credit score in US is bad and he never bothered about it as he thought now he will be staying in India. His job was going on well and his life was comfortable. On one fine day he decided to quit his job and started his own business. He could not make it in business, his social responsibilities forced him to get once again in job. He started applying in different companies and finally one Bangalore based company offered him 16-20 lac pay package. He was excited and thrilled to get this offer. This company was US based and one of the most important criteria they would check is their US credit score…My friend tried hard to convince them but finally he was not selected. To improve his US credit score he is now really working hard but nothing seems to be working for him.

Example #3 – How an Indian Bank asked for CIBIL report

One of the readers was asked for her CIBIL report when she applied for a job in an Indian Bank, She applied for CIBIL report and handed over to the bank, the bank has not followed up with her after that.

I have applied for a job in bank and they have to check my CIBIL. I have a loan taken just 2 months back and only one installment hit my a/c thru cheque and tht was honored. Bank want to check my CIBIL before hiring. I haven’t had any bad experience but ya this is first time my CIBIL gonna check… and might be there is some problem according to bank ppl as they have not reverted me after my cibil check.

Quotes from some of the latest articles on media

  • If you thought you had only to worry about banks getting hold of your credit histories, there’s more. Of late, employers too have been asking prospective candidates to submit their Credit Information Report from CIBIL. Your employability could be affected by the report, as it happened with an acquaintance of mine, who was refused employment in a bank because of his poor credit history. Would you rather pay for your mistakes at a later stage in life or plan for those loan EMIs and pay them on time? – source
  • Some employers may also ask a potential employee to submit his/her credit report during the hiring process. Those with poor credit scores may be rejected in favor of those who have demonstrated better financial planning. Thus, the credit score and report may become a vital ‘reputation’ collateral even for employment in the future. – Source
  • Companies in western nations are known to make credit checks before taking people on board. In India, companies have started checking the creditworthiness of an individual, especially for senior-level hiring. Employers ask the candidates to produce their credit report at the time of interview because employers cant access it directly.  The trend is picking up in financial and IT sector companies. – said Harshala Chandorkar, senior vice president, consumer relations, Credit Information Bureau (India) Limited (Cibil). – Source 

Why Do Employers want to check your Cibil Report?

If you think for a minute and try to understand it from an employer’s perspective, you will realize that there are some reasons why employers might want to look at your CIBIL report before they hire you. Here are some –

1. It’s part of “background check”

A very valid point can be that checking your credit report or score can be seen as a part of “background check” . While there are genuine reasons why some innocent guy had a bad CIBIL report, a person having a bad CIBIL report can be seen as an irresponsible person and not capable of taking care of things. Just like no company likes to hire someone who has a criminal record, in future even having an extremely bad credit report can be seen in that way.

2. Bad credit record might indicate bad intentions as general

A person having a bad credit report might not be seen as an honest, credible person to work with and he/she might be seen as a potential threat to the work environment. While this is a big debatable topic – look it from employers point of view, they see things in a very defined manner, if the company policy tomorrow says that we will not hire someone with any person whose credit report has a WRITTEN OFF status on a loan, or has a score below 650 , then even those who are innocent and have got a messed up report will feel ask if its unfair, but companies go as per their framework and rules defined, not case to case basis.

3. High debt trap might lead to bad performance

If you have a huge debt on your head, it’s really tough to give your best at work. This is exactly how employers can see it, even though you disagree with it. It has been known that financial issues have a big impact on professional life, you might not concentrate fully if you are in a financial mess and paying off your debt is consistently on your priority list each and every moment.

Bad credit report leads to job rejection in interviews

Is the CIBIL report being checked by all employers and sectors?

As of now, looking at credit reports while the interview is a very new trend seen in India. It’s not widespread, but have started happening. So you can safely assume that it will be a regular process within some months or years. As of now, CIBIL Report is checked at only senior-level interviews especially in Financial and IT sector, but soon this will be happening across sectors and all levels. Employers can not directly access a candidate credit report because RBI guidelines allow credit bureaus to share it only with banks and financial institutions who are clients of CIBIL, hence Employers ask the candidate themselves to present their report when they come for an interview.

Note that credit reports are just one of the parameters being checked by the employers, it’s not the only basis for job rejection. Apart from the credit report, other main and important parameters like job qualification, experience and salary expectations will also matter while hiring, a credit report is just a part of the whole process.

Who else can use Credit Report and Score in coming future?

In an email reply to me, Harshala Chandorkar – Senior Vice President – Consumer Relations of CIBIL shared with me that credit reports can enter our lives in a big way in the future. In future landlords may demand a credit report before renting out an apartment and even telecom providers can see your credit report to assign the limits for your usage, but this can happen in the future, not very soon. Here is what she said in an email reply to me

In more developed economies, an individual’s credit information report and credit score is critical reputational collateral and is being used for multiple purposes by various institutions. Employers review it before recruiting a new employee; landlords require it before renting out an accommodation and of course telecom providers check an applicant’s credit history for assigning limits.

We may see similar evolution in India when a person’s credit report and credit score will be imperative for a lot many things in addition to availing institutionalized credit facilities. Therefore it is very critical for students to maintain a good credit history and pay back the loan dues on time.

Share this information with your friends (you can share it by clicking on the “Share” button on the left side) and let them know about it, they will thank you. Also, let us know – What do you think about this about job rejection due to the CIBIL report? Do you feel it’s going to help us all? Do you think it’s fair to check credit reports by employers in job interviews?

Results of Personal Finance Quiz – with answers

I took a personal finance quiz last week, in which close to 1,000 people participated. It was amazing to see the participation and the way you guys took the survey. I am now publishing all the questions with correct answers and the explanation for the answers , along with some observations (results and how different income group, profession performed in it) . Each answer had a 1 mark , so someone who answered 4 right out of 10 , has a score of 4/10 .

Personal Finance Quiz was tough

I did not want to make a simple quiz, so I had designed the questions in such aq way , that the answer which comes to mind immediately was not correct , the right answer was a little hidden one and not easy one . Hence you might see that the answer which naturally came to mind was actually a wrong one , the right answer was a little tricky one.

Some Observations from Personal Finance Quiz

  • The average score of all the quiz takers was 3.48/10 .
  • 94% quiz takers could not score more than 5/10
  • 50 people who were extremely overconfident and said “All 10 questions are correct” , all of them scored below 5 , and the average score was 2.84 out of 10
  • The high income earners were the worst performers with average score of 2.69/10
  • One of the worst performance was from software professionals with average score of 2.91/10
  • Only 27 people were able to score more than 7/10 and just 4 person scored 8/10 . Most of these people had income less than 5 lacs and they thought they had “more than 5 correct answers” , but not all correct.

Answers for the 10 quiz questions

Here are all the 10 questions from the quiz and their answers with explanations. You know what was your answer and hence you can find out what was your score exactly.

1. If you have a bad remark in your cibil report ? What is the maximum tenure it will be there and after that it will be removed ?

Right Answer was There is no upper limit on this I was sure that a lot of people will choose the answer as “7 yrs”, because they had heard that number “7 yrs” as being the limit after which the bad remark from CIBIL is removed, but its again a myth ! . Yes – you will be shocked to hear this, but 7 yrs is the MINIMUM time-frame for which bad remark will appear, its not maximum. In the question, it was asked for the maximum limit, and right now there is no maximum limit. I was on a phone call with a senior person from CIBIL, and she told me that right now there is no decision on what will be the maximum limit, so on the higher side, the bad remark on CIBIL can be for even 15-20 yrs , you never know , but for sure it will be there for minimum 7 yrs . Now understand that this is when you do not do anything about your Bad remark , if you pay off your outstanding or pending debt , then it will be cleared of, Read this article on how to improve your cibil score and Report

2. CIBIL score is calculated based on past how many years credit history ?

Right Answer was 2 yrs . I was not very surprised when most of the people chose 3 yrs as answer. It must be because they are aware that the CIBIL report contains your last 36 months of history , it has all the data about how much was outstanding and how much you paid. But your credit score is only dependent on past 24 months credit history only, whatever would be the algorithm for calculating the credit score, only past 24 months of data is used.

3. The money you withdraw from your Endowment policy after the 3 yrs lock in period is Tax Free 

Right answer is True.  As per the revised rule, any surrender value from Endowment plans are tax free after 3 yrs, but earliar it was 5 yrs, now its changed  (This answer was updated later)

4. If EMI for 20 yrs – EMI for 25 yrs = EMI for 25 yrs – EMI for X yrs , what is X

Right answer is None of the aboveThe other 3 options was not a right answer because X will depend on the interest rate value, If the interest rate is a number which is like 10% or something , then the X value will be infinite, but X can actually be 100 yrs or 200 yrs , if interest rate is very small like 3-5% (test your self), hence the answer is it purely depends on the interest rate. You can check this using the this EMI Calculator .

5. Ajay bought a house in Nov 2011 and paid stamp duty of Rs 50,000. Now its June 2012, and his friend recently told him that stamp duty can be claimed under sec 80C. How much of Stamp duty out of 50,000 paid can be claim now ?

Right Answer – He can not claim Stamp Duty Under 80C nowThe simple rule is that Stamp duty can be claimed under 80C, only in the financial year its paid.  If you see the question clearly, then you will see that Ajay bought the house in Nov 2011 (that’s 2011-2012) , hence the 80C benefit for stamp duty can be claimed only for 2011-2012 . But the question says that now its June 2012 when Ajay’s friend tells him about the stamp duty thing , now the time has passed, he cant claim it back now .

6. Father creates a Fixed Deposit on his child name for Rs 10,000 @10% interest rate. Next year who will pay the tax on the interest amount of Rs 1,000 , if child has no other income source

Right answer – No one will pay income tax . I was sure people will confuse this with the income tax clubbing rules, which says that income of minor will be clubbed with the parent who actually invested the money, but here if you see the income for the year is Rs 1,000 which is from the Fixed Deposit on child name, and what many people might not be aware is that, as per section 10(32), income upto 1,500 per child is exempted from income tax clubbing . Only income above Rs 1,500 will be clubbed, which means that a person can make FD’s on their child name and interest upto 1500 will be treated as purely child income and no tax will be paid on that. This is one of the tip you can use to save small tax on the income from investments .

7. Ajay’s age is 25 yrs right now , His birthday is coming next month, but he will not be able to take his term plan before 3 months, Why should he worry ! 

Right answer was There is nothing to worry aboutIts because Life Insurance calculations considers the “nearest” birth date, not the next or previous one. So in this case Ajay’s birthday was coming next month, so whether he takes a term plan before 2 months of his birthday or after 2 months, it does not matter, his premium will be same, because his age will be considered as same. Now this has become a standard way of calculating the age, but there might be 1-2 insurers who are still calculating it on the completed age.

8. Ajay sold his land after 9 yrs, but still suffered a capital loss of Rs 8 lacs, In order to save the tax on that, Ajay had also bought some shares 2 months back which have appreciate a lot . He sold them at a profit of Rs 3 lacs, Which option is correct now?

Right Answer was Ajay can carry forward 8 lacs of capital gains loss for next 8 yrsThe first point is that a capital loss can be forwarded for next 8 yrs, not 6 yrs. The other point is that most of the people must have offset the 8 lacs long term capital loss with 3 lacs of short term capital gain, and thought that he can forward only 5 lacs of capital loss, but they forgot that a Long term capital gain loss can not be adjusted against Short term capital gain (a short term capital loss can be adjusted against both short/long term capital gain) . Hence he can fully carry forward total 8 lacs of capital loss for next 8 yrs.

9. You can file an RTI and get information in respect to ?

Right Answer – Both SBI and PPFAll the govt departments comes under RTI act . As PPF comes under Post Office (Govt of India undertaking) and SBI Bank (a govt bank), both come under RTI , and in the same way all the PSU banks like Bank of Baroda , Canara Bank, Bank of Maharashtra etc also come under RTI , in-case you are facing any issues which you wants answered, you can file an RTI application and get your queries answered. Look at this example of how can file RTI for your EPF (Employee provident Fund) queries.

10 Ajay family consists of Brother, Wife and Mother. Ajay holds a Demat account (nominee is brother) and a Joint bank account with wife (nominee is mother) . Now Ajay and his brother both died in an accident , Ajay had not written any WILL . Which of the following is true ?

Right Answer is Demat will be claimed by Mother & Wife, but Bank account will be claimed by Wife OnlyIt was simple, but confusing. When a nominee dies, its as good as no nominee. Hence The demat account will be considered to have no nominee, which means the hindu succession law will apply in this case as there is no written will, and the demat account will be equally claimed by Wife and Mother (both class 1) . However the bank account will just go to wife because its a joint account, hence the second holder reserves full right on the bank account after primary holder death, the nomination or WILL has nothing to do here, because nominee and Will comes into picture only after both the holders death.

Prize for Top winner of Jagoinvestor Wealth Club

Out of the 4 people who scored 8 , We are picking one random winner , who is Mr. Rajasekaran, and we would like to offer him 1 yr free membership of upcoming Jagoinvestor Wealth Club, which is a paid product . Not disclosing much on what it is exactly, wait for it ! .

How do you feel now

Truely speaking, the personal finance quiz turned out to be very good and I really enjoyed it . You must have see how you quickly answered few questions and got them wrong, you must have spent some time to read them carefully :). This quiz was also designed so that you can see yourself that where you stand when it comes to personal finance and understanding the internals of it. Would love to hear how you feel after knowing the answers, do you feel you were overconfident with your knowledge ? Do you have any confusion in the answers of these personal finance quiz questions and would like to understand more ? Please leave your comments .

EPF e-Passbook – Check Employee Provident Fund Balance Online

Good news for EPF account holders. Now you can check your Employee provident fund balance online using the new e-passbook service by EPFO website. EPFO has introduced a new concept called “EPF Account Passbook”, which will allow EPF Account holders to download their EPF Balance passbook at any time they want, which means you can now do EPF balance enquiry each month and see how it’s increasing.

How to register for Employee Provident Fund e-Passbook?

Here are 4 simple steps to register for the Employee Provident Fund e-passbook online and after that you can do the EPF Balance enquiry anytime you want.

Step 1: Register yourself on the website

Register for EPF e-passbook

The first step is to go to the e-passbook members website – and click on the registration link. Once you are taken to the next page.

Step 2: Generate your PIN and login

Generate EPF epassbook PIN online

You will be taken to the next page where you need to provide details like

  • Mobile number
  • Date of Birth (make sure it matches with EPF records)
  • One of the documents mentioned in the drop-down
  • Name and Number on the document (Like PAN card and the PAN Number)
  • Email

Then you need to click on “Get PIN” button to generate a PIN which will arrive on your mobile and email. This PIN is required for authorization every time you want to download the e-passbook and check your Employee Provident Fund Balance. At this point in time, you will need to log in again which will take you to the main page where you can do your EPF balance enquiry and download the e-passbook.

Step 3: Download the EPF Passbook which has your balance

Download EPF e-passbook PDF

Now on this page, you need to go to option which says “Download E-passbook” and under that click on “Download E-passbook”, It will ask for the state where your establishment is covered like Maharashtra, Karnataka, Delhi etc.. Once you click on the state, it will ask you to choose the exact EPF Office.

Step 4: Enter your EPF details

Finally download the EPF Passbook

Now you need to enter your EPF account number and name of the account holder, and click on “GET PIN”, which will generate the PIN on the fly which will come on your phone and email. You need to now enter this PIN below and you can download the PDF which has your current Employee Provident Fund Balance and other details. Make sure you do not close this page unless you get the PIN. One of our Financial Coaching Client, Jassi tried this whole thing and his experience was good

I followed the same steps. Yes the PIN is received in your mobile after some time, so one needs to be patient. And the page should not be closed until one receives the PIN, to access further. After receiving the PIN, log in to the application. If e-passbook is available, it should be shown immediately. Otherwise, one might have to wait. – On Email from Jassi

Checking your Employee Provident Fund Balance from time to time?

Now with this method, you can keep checking your EPF account balance from time to time, you can check it each month after your salary is deducted and some days pass, or you can also check your PF balance on a quarterly or yearly basis, whatever works for you. I hope you are clear about some hidden and must-know facts about your EPF

Sample EPF e-Passbook

Below is a sample EPF passbook which you can view and download. It shows how EPF e-passbook looks like and different entries made by the employer. But you will see only those entries which were uploaded and updated by your employer. It might happen that some people see their old data only.

sample epf passbook

12 Important points to know about EPF passbook

Here are some of the very important things you should know about the Employee Provident Fund e-passbook facility.

1. One Mobile number

One mobile number can be used for one registration only. However, you can change this mobile number later if you want so in case your mobile number changes, no worries.

2. One EPF account per establishment

You will be able to view only one EPF account details per establishment, means if you have two EPF accounts under Maharashtra (suppose you had a job in Mumbai and Pune), then you will not be able to view both of them, In that case you will need to first transfer one EPF to another. However, you can view your EPF account details which are under different establishments like saying one in Karnataka, Maharastra and Delhi (suppose you had 3 jobs)

3. Total of 10 EPF accounts can be viewed

A total of 10 EPF account details can be viewed under different establishments. I think its very fair logic because, in all probabilities, a person will not have more than 10 EPF accounts in several establishments, if he has, no one can help him anyway 😉

4. Inoperative & Settled EPF account details not available

If someone’s EPF account is inoperative (it happens if you leave the job and for 3 yrs there is no activity in your EPF account, even the interest will not be credited to that account), or the account is settled (you withdrew the amount already) , then your details will not be available. Tip – You can file an RTI application for your EPF queries and get them answered.

5. Details on request if you left the job before Mar 2012

If you have left your job before Mar 2012, then your EPF account may not be seeing any credit in past few months, in that case he will not be able to see the Employee provident fund details immediately, but it can be requested on the website (you will see a link) and that will be uploaded in few days.

6. Available only if the employer has uploaded Electronic Challan Cum Return of May 2012 onwards

This facility is available only to those whose employers have uploaded the Electronic Challan cum return for May 2012 onwards, Electronic Challan is a way of submitting the employee’s contribution to EPFO online, which is recently introduced by EPF organisation.

7. No need to remember user id and password

There is no user id and password, all you need is your mobile number, document name and document number, which we all remember anyways. At the time of downloading your EPF Balance passbook, you will need to generate the PIN online which will be sent to your phone, this will reduce the chances of fraud

8. Private EPF trusts not eligible 

Those employees who have their EPF with private PF trusts (or called as establishments exempted under the EPF Scheme) will not enjoy the benefit of this e-passbook facility, hence they will not be able to check their employee provident fund balance online using this.

9. Use multiple id’s to register

You can add several documents like Driving license, passport, ration card etc in the same account, this way you dont need to remember just one document id and its number, you can log in using any of those which you are carrying at that time.

10. Details and Entries in the EPF passbook

Month and date wise transactions made in member’s account will be displayed in the passbook from the year for which the annual accounts were updated for the establishment for the first time since computerisation of the concerned field office. For example, if the first annual accounts of member’s establishment were updated for the year 2008-09 by the concerned field office after its computerisation, the passbook will display the opening balance for the year 2008-09 and all transactions thereafter.

11. Error while Downloading the passbook

While downloading your EPF passbook, you might see an error saying “YOU HAVE ENTERED INVALID MEMBERS ID OR NAME”.

Please check whether you have entered the correct code & account number and/or name. In case yes, the name may not be matching as per the record in EPFO. In such a case, the member has to contact the concerned EPFO office. At times some entries from EPF passbook might be missing, in which case, the member should check first with the employer whether the returns for the month/year related to the missing entry has been submitted by him to the concerned EPFO office. In case yes then he/she can contact the concerned EPFO office regarding the missing details.

12. Not getting the PIN on your mobile?

Ideally, you should get the PIN on your mobile as soon as you click on “Get PIN”, but if you dont get it fast, it means the lines are busy and you should wait for more time and re-try!

Tip : Use Chrome instead of other browsers, Some components are running smoothly on Chrome, but not on other browsers .

Are you going to check your EPF Passbook?

Is this working for you? Did you try to find out your Employee Provident Fund Balance using this method? Once you are able to do your PF balance enquiry using this way and check your EPF passbook online or not? kindly let us know on the comments section.

Personal Finance Quiz to test your Knowledge – 10 questions

How much do you understand personal finance? You must be reading this blog from last many months or years, now let’s see how much you know. We have designed this short 10 question personal finance quiz to see your knowledge. Just answer these 10 questions and pick and answer from the drop-down. I will post the answers and scores very soon. Please write your full name when you enter your answers.

The quiz is over and Results are declared here

Direct link to Quiz here

Charity Week – Break your Attachment with Money

We are all living in a world where we are conditioned and functioned to GET than to GIVE. Since childhood, I have been trained to focus more on getting than on giving. Getting good grades, getting admission in a good college, getting good placements, getting awards and getting good salary packages.

Charity in India

We had some realization that we would like to share with each one of you. We saw that the other side of getting is GIVING. The world of giving is much more magical than the world of getting and with this charity week, we would like each reader of Jagoinvestor to get in touch with the magic of GIVING. Tell me honestly, why do you get on Jagoinvestor – to get or to give? I am not saying getting is bad, it is important to givers so that they will have more to GIVE more. Some of you really take out time to forward good personal finance articles to your friends even if you know they wont read because you care for them.

Let’s not get stuck in the rat-race because even if we win, we will end up as a RAT. We are not saying become a saint, all we want to point out is that, as an investor you are much more than your bank balance, you are much more than your investment portfolio and the returns that you get. We want you to realize how wealthy you are in this moment.

ROI of your Life

With Charity Week, we want you to get in touch with the ROI you are going to get from YOUR LIFE and not just from your money. A Go-giver will always have highest ROI from his life because he is more of a contributor than a consumer. You experience life at its peak when you are a giver and not a taker. Three messages we learn t and we would like you to learn from Charity Week are:

1. Connect with power of Giving

I was really touched and moved when Manish shared this experience with me. Manish and his wife were traveling from Pune to Mumbai. When the bus got on expressway, the conductor found one villager in the bus who was not having money to buy the ticket. It seemed as if he has got into a wrong bus by mistake. As per the rules the conductor asked that person to get down from the bus. Everyone in the bus was watching what was going on and in that moment Manish and his wife decided to talk to the conductor. They told the conductor that whatever is the fair we will pay but allow this person to travel, don’t drop him on such lonely highway. Manish and his wife paid for that person’s ticket and conductor finally allowed that villager to travel. That villager’s eyes got wet and it carried immense acknowledgement for Manish and his wife. In that moment, Manish experienced some magic and that is the magic we want each one of you to get in touch with. When you a giver you operate from service and help someone.

The big lesson here is – “It takes an open heart to help someone and not a lot of money”

2. Wealth isn’t the end, it’s the beginning

One thing that we have realized is that wealth is not an end but it is always a beginning. I have a small garden in my backyard and I invest (notice I don’t spend time I invest my time) some time every day to be with nature. Any garden is initially a patch of land and then you plant a seed or a sapling, we start to give that seed all the Wealth of water, Wealth of fertile land and Wealth of sunlight, that is how the sapling or seed starts to grow and on one fine day, it starts to give flowers and fruits. The fruits and flowers blooming is not the wealth, the wealth happened in the beginning. As an investor you also need to get in touch with the wealth you start as an investor. You always have wealth of actions, wealth of time, wealth of ideas, wealth of dreams, wealth of people and blogs that can help you understand about money. Your job as an investor is to nurture your financial life with the wealth you BEGIN with.

The big lesson hereWealth is not the end. It is always the beginning

3. Break your attachment with money

We wanted to do this charity week long back but at that time I was not making any donations. My attachment with money was massive; I was focusing more on what I can get rather than what I can give. The world of giving is always a world of abundance. One of the things we have realized is that even if you take away abundance from abundance it still remains abundant. I never use to give money to any needy person thinking these people don’t work hard and we should not encourage such things. I never gave money to any charitable organizations thinking my money will get misused.

I had some realization some time back. My father took me to a GAUSHALA (A Cowpen). I liked the place, I also had some interaction with the person who was managing that place, he shared with me how people donate and contribute with an open heart. He was full of love and service and he had no expectations from me or from anyone. In that Cowpen you can adopt a cow with some annual fees. Something happened to me in that space and my attachment with money broke. I made maximum donation I could on that day and it was a very fulfilling experience. From that day I am looking for opportunities where I can help or serve someone.

The big lesson here : Giving is one of the easiest, most difficult things you will ever do.

I and Manish always discuss that no matter what your salary is or which mutual funds you invest or how much gold you acquire, unless you break your attachment with money you will never become wealthy.

What some Charity Week Hero’s did in this Charity Week

See what Sam did

These days, we are so attached to the money that we hardly care about people in need. Couple of years back, one day i went to a small railway station near my house in Bangalore for a morning walk. (It has a long and nice platform ;-) ). After a while i sat on a bench, a train came. I was observing the people and its amazing that these people get up so early in the morning , travel so long to do their jobs & I don’t think they get huge salaries. At that moment i realised how lucky i am, that i have a good job, i can earn money by working on a computer. I also realised that i am in a position to help many people in need. Since then i started very small donations to couple of organizations, and also i came across a micro finance NGO – where we can lend the money to poor people who wanna do small business. I am a regular investor in Rangde.

See what Sainath did

I like Akshya Patra and contribute for the outstanding service they are offering. To come up in life education is necessary. But what good the education is if we dont have lunch during school hours. How will we digest the knowledge without having proper food. Akshaya Patra provides lunch to loads os school students which i think is a very good initiative. I totally support them and will spread their work to all.

See what Suhas has done

I have right away donated Rs 4200/- for child education through net banking to smile foundation India. I wanted to do this since some time but got the timing today with your donation week. I storongly belive that only education can uplift this country from all the mess we are in. Thanks for bringing up the topic. and offcourse it feels gr8……:)) Keep up the good work………

See what Aparna did

Recently, we had been to Shimoga (a place near Bangalore) to a temple. There are around 23 boys who are sponsored by the temple committee. When we saw the boys, we went ahead and donated money so that these boys get good food to eat atleast once in a year. We are also planning to donate some money in the next year for the same cause. Also, recently, we donated around Rs. 17,000 to a boy who wanted to complete his education. We donate atleast Rs. 20,000 yearly. Its our routine :)

See What Sushil did

I have been donating Rs.300 to UNICEF children’s fund every month. I was shocked to hear this would help 120 newborns for polio medication. And Rs.1200 would take care of a child’s expenses. Yes, our petty amounts make HUGE differences somewhere!. It also has other donation campaigns, where u can donate any amount you wish to give every month. I am increasing it sooner :) . In my hometown (Siruguppa) in Bellary district, Karnataka, I know a doctor who goes to villages teaching Dos and Donts, giving them free medication, helping them on monthly visits. I wish to donate some amount to his foundation soon.

See What Rajendra did

When you give without any expectation you get more. We experienced this when Rs 20400 has passed through our hands to reach Maaillu which takes care of 180 children who don’t have parents( It is foolishness to feel that it is a donation- God gave us that great opportunity. We earned that money by doing another good work of helping others with the only intention of passing it to Maa illu. That extra work gave us real satisfaction than the giving, (giving became our duty). I feel that writing about charity is also the duty of you. I always remember the words of Infosys Narayana Murthy ‘ Power of money is power of charity’. As he said, We have to earn to give it away.

Our invitation to you in this Charity Week

We invite you to hear your call. Join the charity week with the most loving heart and do some charity in any organization of your choice. Make this week special make it an integral part of your life. It’s time to think beyond numbers, financial products and calculations. We want you to fix your life’s calculation first and the rest will happen on its own. In this week be of service to people around you, fill yourselves with a lot of love and help everyone around you. Do something special for all those who are serving you and you never ever noticed them! Be it your liftmen, your security guard, your office person, your helper at home, or just help some poor people

Fill the comments section with heartfelt experiences and sharing, let the goodness in you come out. Let’s master the art of giving. This kind of charity may have never happened on blog, lets create a world that works for everyone, let’s contribute and be of service to everyone around us. Make this charity week a piece of your heart and enjoy the wealth called ‘LIFE’.

Here is how you can make a start, following are few organisations where you can make a donation

Rs 1,75,000 already donated by 32 readers

We are close to thousands of readers on this blog , even if 10,000 people donate even Rs 500 , it would be close to Rs 50 lacs worth of help to someone. Think about it – do your bit .

Here is the form where you can submit your donation details so that we can measure as a blog how much money we donated and what difference we created in the world. If you are already doing charity share your experience in the comments section. Only the money that you will be donating in this week will be counted.

Just donate some money and let some money go out of your pocket for someone else. You will experience a very different kind of feeling which will be great.

How to calculate monthly average balance ?

Do you understand what is the meaning of Minimum Monthly Average Balance in your saving account? When you say “Monthly Average Balance of your saving bank account is Rs.10,000”, what does it mean exactly?

A lot of people feel that their balance in saving bank account should not go below Rs.10,000 on any given day, otherwise, there will be penalty charges and they make sure that they have a buffer of Rs.10,000 in their saving bank account all the time.

This means that their accounts should always have that much surplus. However, the way the monthly average balance is calculated is different and very simple.

Meaning of Monthly Average Balance?

It simply means the average of all the closing day balance in a given quarter. So given a quarter, add up all the closing day balance and then divide it by the number of days in the quarter. If you have to put it as formula it would be

MAB = (Total of all the EOD closing balance)/(number of days in the quarter)

Let me show you an example. Let us say the quarter we are talking about is Apr-June. Now your balance at the start of the quarter (Apr 1) is Rs.20,000. You withdraw Rs.15,000 on 15th Apr and then Deposit Rs.8,000 on 12th June. What will be the Monthly average balance for the Apr – June Quarter?

quarterly average balance


Can you take this 2 min survey and help us

Learnings & Tips

  • Keeping Rs.10,000 in a bank account for 15 days is same as keeping 5000 for full 1 month (10k * 15 days = 5k * 30 days)

PSU Banks vs Private Banks

A lot of PSU banks like SBI Bank, Bank of India, Allahabad bank generally have a lower Monthly Average Balance to be maintained in a savings bank account, its average limit is up to Rs.5000 in most of the banks and non-maintenance Charges are very low around Rs.40-50 only.

However Private banks like ICICI Banks, HDFC Bank, Axis Bank etc have Monthly balances as high as Rs.10,000 and high charges as a penalty for not maintaining it, It some times can be as high as Rs.750.

Did you knew how the minimum average balance is calculated ? Now will this information impact your banking in any way ? Will you keep less money in your bank account because you now understand that Monthly average balance is calculated in a different way than you thought?