Month: August 2014

Yes – You can now invest extra Rs 50,000 in your PPF account and it will be accepted

Posted on by Jagoinvestor

Congratulations, Now you can now go and deposit the extra Rs 50,000 in your PPF account as the limit for your PPF investments was raised from Rs 1 lac per year to Rs 1.5 lacs in this budget.

ppf

A lot of investors had invested Rs 1 lac in their PPF account this year start and when the budget raised the limit by extra Rs 50,000 . They had this big question – “Can I invest Rs 50,000 more in my PPF account this year and get the income tax benefit?”

The thing is even if the budget has mentioned that PPF limit was raised, it does not get increased instantly. I mean the banks officials and post office staff does not allow the max limit the same moment. A separate notification is required by the RBI after making the required amendments in the Public Provident Fund scheme and that’s exactly what happened on 22nd Aug .

PUBLIC PROVIDENT FUND (AMENDMENT) SCHEME, 2014 – AMENDMENT IN PARAGRAPH 3 AND FORM-A

NOTIFICATION NO. GSR 588(E) [F.NO.1/2/2014-NS.II], DATED 13-8-2014

In exercise of the powers conferred by sub-section (4) of Section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following further amendments to the Public Provident Fund Scheme, 1968, namely :—

1. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2014.
(2) It shall come into force from the date of its publication in the Official Gazette.

2. In the Public Provident Fund Scheme, 1968,—

(i) in paragraph 3, in sub-paragraph (1), for the letters and figures “Rs.1,00,000”, the letters and figures “Rs.1,50,000” shall be substituted;

(ii) In Form-A, in paragraph (iv), for the letters and figures “Rs.1,00,000”, the letters and figures “Rs.1,50,000” shall be substituted.

Below you can see the copy of the notification which came 1 day back and the same has been sent to all the banks and post office departments and RBI has asked them to now incorporate it and also inform to all the PPF subscribers.

ppf limit raised notification rbi

How much extra income tax you will save by investing Rs 50,000 more in PPF ?

If you are into the highest bracket of 30% , in that case you will save 30% tax on the extra Rs.50,000 invested in PPF. So that comes to Rs.15,000.

Earlier you used to pay income tax on Rs.50,000 (because you had maxed out your investments in income tax saving products) , but now you will save 50,000 and also pay Rs.15,000 less in your income tax (because your taxable income will come down by 50,000)

So now you can visit your SBI Bank or Post office or any other bank where you have your PPF account and invest the extra Rs.50,000 🙂

Allow Wealth coming into your life by breaking your Belief System

Posted on by Jagoinvestor

Most of the TV channels help in selling products like – Lal Kitab, Suraksha Kavach, Shri Yantra . They do this day and night and according to these advertisements, these products helps people in becoming prosperous. Most of the news channels have at least one show on Palmistry too, which solves people financial problems. Some believe in it and some choose to call it superstition.

Stop Wealth Coming in Life

Superstition or Beliefs

Here is an old story to learn something from about superstition or beliefs

When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise, that it distracted them. So the teacher ordered that the cat be tied up during the evening practice. Years later, when the teacher died, the cat continued to be tied up during the meditation session. And when the cat eventually died, another cat was brought to the monastery and tied up.

Centuries later, learned descendants of the spiritual teacher wrote scholarly treatises about the religious significance of tying up a cat for meditation practice. Now how is this related to financial life ? Many such cats are present in your financial life, which you might not even be aware about, you believe in few things as if they are truth without questioning them and thinking about it.

Let’s look at some real life examples

[note color=”f2f2f2″]
“Advisor: Sir, gold prices have gone up because of festive season I think you should wait for some time?

Mr. Shah: No no, We buy gold only during Diwali. No matter what gold prices are – we would like to go ahead.
[/note]

[note color=”f2f2f2″]
Real estate agent: Sirji, one very good property is available at a very competitive price. The property is main road touch and it is difficult to get such property at this rate.

Mr. Singh: Oye No no. it’s House number 13. It is an unlucky number we can’t go ahead with this property. Show us some other property.
[/note]

[note color=”f2f2f2″]
Insurance agent: Sir I have a traditional plan, where you get high returns and your money is absolutely safe

Half of india: Yes, my parents taught me the same. I believe in LIC, I know LIC is safe and best investment. I am ready. tell me where to sign?
[/note]

Whats your Belief System

Now look at your belief system. Look at what did you hear on TV or read something on blog or magazines, that became part of your belief system. From time to time question your thoughts and beliefs, as questioning will help you grow.

Break your belief system,
Nandish Desai

How this Lady paid Rs 25,000 in pay-order charges for claiming her PPF maturity amount

Posted on by Jagoinvestor

Is your PPF account going to mature very soon ? You are excited to finally redeem your years of saved money in PPF account.

But do you know that some banks are playing with some investors ignorance and charging them hefty amount in the name of DD charges or Pay-order charges to give bank the Public Provident Fund account matured amount.

Let me unearth this no so known or talked about thing today.

bank charges

Read this incident below to understand what I am talking about

My neighbor (a very old working woman) had a PPF A/c in SBI, on 31st of March 2010 it completed its 15 year term and hence the same was eligible for withdrawl, she duly filled up the redemption form and asked the bank to redeem the amount.

On 14th of April 2010, the bank issued a pay order but deducted bank charges (as the savings account is with another bank), SBI has nearly deducted bank charges of about 25000/- from her.

My neighbor didnt have a bank account in SBI, her account is in IDBI and SBI has deducted the charges for preparing a pay order. Here no service is being rendered but rather its bank obligation to make the payment.

Please help. It would be good if we can help her.

(Source)

Some Banks not allowing PPF Maturity Redemption directly to saving bank account

When your PPF account matures, and you want to redeem the money, there are several options you can get the money. You can either take it directly in your saving bank account, or get a DD created or a pay-order.

However a lot of banks fool customers and never share with them that the money can be directly credited to the saving bank account and force them to make the Demand Draft or Payorder, because that involves charges and it adds to the bank revenues.

And most of the times, the helpless customers fall for it because the charges at times are in range of few hundred and they do not want to pursue the matter and complicate it.

In the example above, you can clearly see that the person was forced to get the money through pay-order and such a heavy charges for that was applied.

This whole mis-guiding worsens, when the person does not have the saving bank account in the same bank, the officials in-charge tell that its mandatory to have a saving bank account in the bank if you want to get the redemption amount in your saving bank account, else you will have to get it through DD or payorder, which is completely wrong.

There is no rule like that. One should be able to get the money through NEFT or RTGS or direct bank transfer if they wish to and the PPF redemption form gives that option clearly. Have a look

sbi ppf widthdrawal form after maturity form C

You can clearly see that there is an option of crediting your PPF maturity amount to any saving bank account.

Some real life Incidents of Banks Asking for heavy charges at the time of PPF maturity payment

Mr. Naresh was asked by Bank of Maharashtra for DD Charges for PPF maturity Payments

Bank of Maharashtra charged me DD charges of Rs 5050/ while making maturity payment of my Public Provident Fund account money. I had asked them to transfer money by cheque or NEFT, but they refused and issued me DD. Is there anything I can do?

Mr. Premji was charged payorder charges of Rs 900 by State bank of Hydrabad

State bank of Hyderabad recovered about Rs.900/- for issuing their banker’s cheque (pay order) for PPF part withdrawal. I am told that as per the PPF rules, the bank cannot recover any charges for issue of Banker’s cheque or pay order for PPF withdrawals. However I am unable to find out such rule in print.

What is the correct status regarding the above issue? Which authority will give a authenticated clarification?

Where to complain for these kind of issues?

A lot of people are not even aware that banks are taking them for granted and trying to levy charges which are unethical. Customers do not resist at times, because they dont want to get into the mess and waste their time for small charges (like Rs 500-Rs 1000).

At times they are excited to receive the big amount from their Public Provident Fund account and cant wait for it. At times there are emergency situations which dont allow them to fight back. But incase you want to fight back. Make sure you follow these following steps

  • Make sure you meet the Bank Manager and tell him clearly that you know the rules and there is no such rule that you have to pay DD or Payorder charges to get back your own money
  • Ask them in writing for charges and also insist that they show you the rule book.
  • If nothing works, file an RTI to RBI asking about the bank action and if there is any such rule. You can also file a RTI to Post Office (which handles PPF finally) about this rule.

Have you ever come across this situation in life ? If not , great ! .. you are now informed what to do when you face this situation