5 Inspiring Success stories of people who actually increased their Income? [Bonus FREE EBOOK Download]

With this bonus article, our increasing income series comes to an end. Over the last few weeks, we have been writing articles which focused on increasing income and also shared lots of ideas around it. We decided to end this series by sharing some interesting real life stories.

We also take this opportunity to thank each one of you, for your participation during increasing income series. We received some amazing comments and numerous emails in which, people shared their unique attempts on how they actually increased their income. Each email sharing has flavor of success in it and you will love reading them.

Below, We have shared 5 real life success stories (name changed at some places as per request). Few of these success stories are sharing from our readers who attempted and succeeded in creating an alternate income. They took right amount of risk, they figured out a unique way by which they can share their talent with more and more people, they converted “increasing their income” into a project and the results have been amazing. Here they are!

Success Story #1 – How a Dentist worked on increasing his income

One of our readers who is a dentist by profession runs his clinic in Mumbai. He read the article on increasing income and decided to take some committed steps by which he can also increase his annual income. He has been practicing from last 4 years now and has good number of patients who visit his clinic on regular basis.

dental kit

He took some professional help and designed a good dental kit, which can be of help to his patients and their family members. The dental kit includes some books, video CD, some products and some other educational material in it. He priced the kit for Rs. 1999/- and showcased the kit in his clinic’s reception area. In the last 15 days, they have sold close to 10-12 dental kits and he is happy to see how some extra money is coming in with his creative effort. If you look at the yearly numbers, you can see that a good alternate income would be generated.

With this new offering he is able to serve his patients better and he could also increase his daily and monthly income. Some of his patients have also started sharing the kit content and material with other family members and friends. We congratulate Dr. Ajay (Name changed) and also thank him for sharing his success story with us.

Success Story #2 – Come back of Yoga Teacher

This story is of a marketing professional who turned into yoga teacher. His sharing brought tears to our eyes (Manish was really touched by his sharing and money story). He is in the field of marketing and works as medical representative for a well known pharmaceutical company. His expenses are higher than his income and so every month he finds it difficult to manage his payments. He wanted to increase his income from a long time so that he can start his investments. It has been 9 years in job but because of EMI and other compulsory expenses he could never invested on monthly basis.

yoga teacher

He read the second article on increasing income series and he decided to increase his income by 50%. He is a certified yoga teacher and after a gap of 5 years he decided to once again teach yoga to people. He decided to take some private yoga sessions in morning hours. He started sharing this idea with people and he got 3 students/clients in Nov first week. Though he has not yet exceeded 50% of his income as per plan, but he is now very close it. With this action he will be able to serve others and at the same time he will also be able to earn additional income from his students.

We congratulate this yoga teacher for his come back and for the success. We are going to assist him in starting his monthly investments from Jan 2015

Success Story #3 – Real estate agent who started leading real estate workshop

Real estate is an area where very few quality programs are conducted for investors.  For those who want to invest in real estate it is important to understand the dynamics of real estate world. There are some very simple ad effective strategies which you can learn to make money in real estate world.

real estate workshop example

This guy from Bangalore took on a project to increase his income and out of his commitment he announced his first workshop for his close friends circle and clients. He got 12-15 participants for his pilot workshop and the feedback has been very encouraging. This workshop is not sales driven or just to showcase new properties, it actually educates investors on the legal front and other aspects of real estate buying. He has priced the tickets at Rs. 5,000/- for a one day session, which would bring in a good amount of secondary income. He is even planning to conduct it in various cities if it works out well in future.

We congratulate this real estate agent for starting such wonderful and informative program for real estate investors. As and when we receive full details about this program we will share the details with our readers.

Success Story #4 – Lady who started preparing dog food

This lady’s story is truly inspiring and so we thought of sharing the same with all of you. She is considered to be an expert when it comes to dog food preparation. She has been in this business from last 3 years now.

She is fond of dogs and on one fine day she found that her dog was not happy with the dog food products which were available in market. She tested some recipes on her own and prepared some dog food packets which she also shared with other dog owners in her city. This is where others could see her talent and her first order came in, slowly she started becoming more and more popular amongst other dog owners in her vicinity.

dog food at home

Today she supplies dog food to almost 50 plus Dog owners and she also owns and runs hostel for pets. We congratulate Latha for sharing her talent with more and more people. We also take this opportunity to thank her for being our reader and for sharing her story with us.

Success Story #5 – From homemaker to cooking expert to bestselling author

This story is of lady called Jenish Parmer (Real Name). She happens to be good friend of my wife. I recently attended an event where she launched her book called “Heaven on Tongue”. My wife insisted on sharing her story with jagoinvestor community.

heaven on tongue book

I (Nandish) and my wife (Himali) have witnessed her professional journey and success so far. She loves cooking and has always been passionate about cooking. She started her journey by participating in one national level cooking competition, she won the competition and a big turning point came in her life. She continued to teach and share her passion with more and more people and slowly she started her catering business.

She recently authored her first book called “Heaven on tongue” and right now she designs menu for some of the most popular restaurants in India. Her story is real, inspiring and easy to relate with. She is not a reader of jagoinvestor but still we have included her story in this article (we called her and took her permission)

FREE Ebook download

Our “Increasing your Income” series has ended with this article. We have compiled all the articles and created a nice eBook which you can download and read it offline on your computer or on your mobile (it’s a pdf file) . Download it by clicking here (right click -> save as) , or by clicking on the image below.

Increasing your income ebook download

Please share your views about these 5 real life stories. Do you get inspiration from these stories ? Do you want to share your thoughts?

13 awesome ideas to make extra income other than your regular job [part 5/5]

Do you want to make extra income on a consistent basis apart from your regular job ? In this 5th article under “increasing income” series, we are going to look at some of the ways you can make some extra money other than your salary. I will be discussing 13 ideas, out which which most of the things can be instantly tried out by most of you.

Note that, here were are not talking about creating passive income which requires huge investment. We are mostly going to talk about ideas which can be implemented without requirement of huge capital, but only some time and dedication.

Lets look at these ideas one by one..

1. Consulting in your domain

If you are expert in some area, you can always give your consultancy service to smaller businesses who cant hire big companies. When we were brainstorming with a client of ours to generate second line of income, he identified that he has some great knowledge in the area of terrace gardening. He could see that he can help families with large enough terrace to setup their own balcony garden and earn some fees over weekends or extra time.


Look back at what all you know and have learned over these years, and you will realise that you have some really deep knowledge in some field, and surely there are many who are looking for someone like you, who will guide them well for a lesser fees (compared to professional fulltime companies)

2. Referral Business

Connecting two entities is another great way to make extra money by spending less energy. So can always have an agreement with some business entity to give clients on referral basis and earn a commission. I recently hired a designer for some work and I asked him if he knows someone who can PRINT the designs for me. He referred me to his friend who done the printing work. I am sure he must have got some cut for the referral and there is nothing wrong in it. Its a smart way of earning money.

Here is what Ajay shares in our last article.

I used to refer students to a local computer institute where i myself learnt ms office. they used to pay me 10% of the course fees paid by the student. i used to earn average between 1000 to 3000 monthly those days.

You might not know that even builders pay you 20-30k for each client referred (who bought the house). So now, have you got a friend who is into business or some kind of service ? Just talk to him if you can pass on clients to him and earn some money on it.

3. Create products and sell on Ebay

With websites like Ebay and OLX, you can now sell virtually anything on internet to those who are looking for products. So you can do some handicraft or anything else, which can be created at home in extra time and then it can be sold on ebay. Or you can find some local product which others would find awesome, but its not available in other parts of country and then start selling it online for a profit. Even you can look at some products which are selling at huge discount at stores (wholesale market or under clearance sale) and then sell it on amazon at regular price.

Earning from Ebay

Earlier, when you wanted to sell something along side your job, you needed to have a shop and someone was required to be at shop all the day, not anymore !.

Ramit has a great article dedicated on this topic.

4. Create a Course and Sell on Udemy.com or Skillshare.com

If you are an expert in some area, which you think can be taught to others by creating a course out of it, you can always sell it on udemy.com or skillshare.com and make money on the fees recieved by the students. So if you are an expert on cooking, Yoga, SEO , Designing, MS Excel, Java, Python … whatever.. Create a nice rich course , record your videos and done ! .. You can tie up with these websites and then earn a lot money. Just understand those models and work on it.


5. Freelancing online

If you have extra time with you over weekends or after your job, you can freelance and take small projects. There are many websites like elance.com , odesk.com or freelancer.com where you can earn money by working on projects. There are thousands of people in India who are working full time on these kind of freelancing websites and believe me, they are earning in lakhs. Look at it as a serious way of making money and not just a time pass activity.

earning from freelancing

6. Become a Tutor online if you love teaching

If you have a knack for teaching and if you are an expert in some subject, you can become a tutor online for students. There are tons of websites like TutorVista or Tutor.com where you can try out this. You would need a great internet connectivity for this. It can work best for someone who is ready to work late in nights as many students from US and Canada would be right fit for you then.

7. Tutions at Home

This is the old favorite way of earning some side income. You must have listened to great stories of how many people have supported their families and their own studies just by taking tuitions. Then why not to extend your income even if you have a job ?

Do you know Music ? Are you an expert in Maths ? Vedic Maths ? Yoga or may be cooking ? Do you live in a residential society which has 100’s of other families? Then tutions is a perfect thing you can start give you are good at what you claim to. You can always dedicate 2 hours (if you really have them) and do some basic advertising in your apartment or nearby places and take students to teach them at home. The best part of this kind of tutors is that you refresh your dying knowledge, earn some money at the comfort of your home and you kill time which goes into unproductive things most of the times. myprivatetutor.com is a good place to register and start with.

7. Rent your empty house/room on Airbnb.co.in

Do you know that next time you head over to Goa for a family holiday, you can just rent out the whole house for 6-8 people at just Rs 5,000 a day . Thats correct!

airbnb in india

Airbnb gives you great way to rent your house or even an empty room, if you want to earn some extra money out of it. You can always give your extra room to travellers and people who are looking for 1 day-week stay on Airbnb.co.in. Just put pictures of your house/room, explain your conditions and rules, put the facilities and thats all. Clients will find your listing, make the payment online, and if you accept, you host them!.

The best part is that you keep 97% of the fees paid and you don’t have to search for clients yourself . Serve them as they come. If you have a full house at some great tourist place like Goa/Shimla/Manali or those kind of places, you can put your whole house on rental basis. Many people who have a second home or extra room, hire a maid and offer the full range of services of a regular basis. Imagine if your extra room is rented even 5 times a month and you earn Rs 1,000 from it ? Its Rs 5,000 extra income !

8. Teach someone live on Google Helpouts

If you have a skill, you can teach someone live on google helpouts. There are tons of categories like Arts and Music, Cooking, Home and Garden, Fitness and Nutrition and many more .. which you can choose from.

Google Helpouts

In this era of globalisation, I am sure there are enough number of people in the world who would like to pay to someone to learn some thing unique.

9. Do Odd jobs at Fiverr.com

Imagine you want your logo/brochure to be designed or want your website andriod app to be created ? It can be done at only $5 (Rs 300). There are tons of odds things you can do at fiverr.com . Most of the times its a small manual task, which is super easy for you, but tough for others.

A small assignment can be done at fiverr.com for $5 and you can raise the fees depending on the complexity involved. There are tons of people in world who are looking at delegating some task at a small fee.


I have used it 2 times myself to get some work done and paid $5 two times.

10. Cooked meals Pickup

I recently ordered some amazing Egg Biryani in Pune (the most delicious) I had till date and the lady sold it from her home through registering at tastykhana.in. I had to go to the place to pickup the biryani.

That got me thinking how many people in our country cook some amazing things, but never capitalize on it. So if you have people at home who cook some speciality and you feel that it will loved by people in your city, you can start pickup service at home. Get the order, prepare the food , opt to deliver at home (at extra cost) or ask them to pick up from your place. And if you are thinking about preparing “Andhra meals” in Pune, I am your customer already.

11. Starting a Creche at Home

I am not talking about professional/big size creche here. If your home is big enough and there is a scope of it, a simple creche can be started. There will surely be some market for it. If most of the couples living around you are into full day jobs, you can surely cash on this opportunity and think about it.

Even if it means renting another 1 BHK flat and starting your creche there, its worthwhile. See how you can actually implement this – I just gave a direction

12. Freelance writing for someone websites/newspapers

If you are strong in writing and can put your ideas on paper in creative manner, then you can write for newspapers and magazines. I get tons of emails myself for freelance writing (i don’t do it but). Here is what Abhijit kulkarni has done..

earning by freelancing

Checkout how you can put your writing skill to earn more..

13. Sell nutritious health drinks around the Park nearby

One of our readers shared this idea with us. If there is nearby park or place, where people come for walk, jogging early morning, then you can always sell health/vegetable drinks and various healthy breakfast too. I am sure it will help you also personally to take care of your health and earn some extra income.

If you don’t have some one at home to do it or you lack time, you can employ a part time person to do this for 2-3 hours and pay them salary or a profit cut.

14. BONUS IDEA – Be a passive partner in someone else business

I know most of the people can’t do fulltime business, because they are into a regular job. But you can always invest your money, your ideas and some basic level of administration to run a side business along with a 3rd party whom your trust.

There are many awesome people, who have the ability and passion to do some business, but they dont have money or experience or some ideas to implement. You can partner with them and offer to invest money in the business and also contribute your time over weekends or after work if its possible for you.

Example 1 – Image a person who has a shop, you can help him/her start a internet cafe – because you are an expert in computers, networking and know the technical side of how to do it. You can build the systems and overall business. You do the backside work and the other person does the front office job. Divide the profits !

Example 2 – Do you know someone who is looking for a job and can drive well, but has limited time? How about you buy a Maruti Van and ask him to use it to start a pick and drop business for children in school . Divide the profits ! ..

Sonme months back, I heard the founder of Tastykhana.in in a TIE talk, where he shared that when they desperately needed some money in the starting years of their business, that time – one of the employee of an IT company put in Rs 1 lac in their business and within a year or two, he got back 20 lacs return through an exit option when they got funding later (it was something like this, if not exact)

Can you see a point I am making? I know its not an as easy as it sounds, but at the same time, its not as tough as you imagine. You need to take some level of risk and try out these things if you want to earn extra income.

How to handle .. “But .. “

I know these ideas must have pumped a lot of excitement in you and a lot of you might have a feeling of “But … and followed by some reason”.

Note that earning an extra income apart from your regular job, takes huge commitment. Its simple, but not an easy task. Its not for weak hearted. You will have to keep aside some of your reasons,come out of your comfort zone and take some pain in order to implement it.

It might means waking up early, it might mean sacrificing something in life (Read the story of Anupam on creating second income) , you might have to redesign your schedule, ask for support from others and taking some tough decisions. There is no shortcut when you want to make money in life.

This is exactly why most of the people never create any additional income, because they never take efforts for it. They are just focus on reducing their expenses, where the possibility is limited. Today I invite you to look at the other side, thats INCREASING YOUR INCOME, which has unlimited potential.

Also do not focus on the quantum of money you earn in the starting. What about Rs 1,000 extra in the first month ? It pays your PHONE BILL ! . Thats big thing .. Its EXTRA money afterall. I hope you loved these ideas and you would surely try out atleast one of these over the next 1 month. Plan for it and take action.

I would like to hear some more ideas from you, no matter how silly or crazy they sound. Even if its something which can earn you Rs 100 extra, please share it. Any contribution is appreciated.

What happens if policyholder dies within grace period ? The answer may surprise you !

Do you know what happens when the policyholder dies within the grace period provided after the due date of paying the premium. The answer might surprise you because there is a big myth around this topic.

Every life insurance company provide a grace period of 30 days for paying the premium after the due date is over. Companies send reminders on SMS and emails to make sure the customer pays their premiums on or before the due date. But if they forget to pay the premiums on time, still they get 30 days of grace period.

If premium are not yet paid after the grace period, then the policy is considered to be LAPSED and no death benefits will be given if the death happens after the grace period.

Do you get sum assured if death happens during grace period ?

And the answer is YES. As per the rules, if the death of the policy holder occurs on the due date of the premium payment or during the grace period, still the policy is valid and the beneficiaries will get the sum assured. But after deducting the the unpaid premium for the current year.

As a proof I am putting up a proof of what the website of Max New York Life Insurance says below. You can see the exact wordings below.

Grace Period in Life Insurance

So if a person has taken a 1 crore term plan for a 30 yrs period with premium Rs 10,000 per year on 20th dec 2010 and imagine the policy has run for 3 yrs , and now its the 4th premium is to be paid on 20th dec 2014 . The grace period will be upto 20th Jan 2015 .

Now if the premium was not paid and the death happens on 25th Dec 2014 , then its during the grace period. How much will be the sum assured paid to the customer family ?

It would be Sum Assured – all unpaid premiums for the current year

= 1 crore – 10,090
= 99.9 Lacs

Payment of Sum Assured if death happens during grace period

There have been a lot of cases, where a person just discontinued his policy for some reason and they faced an accident and died. Internet is full of these kind of cases.

A lot of times death happens during the grace period and because the family is not well educated on this aspect, they don’t know that they are still liable for a claim (we provide our clients family claim assistance service).


So make sure you do not forget to pay your premiums and make sure you do not wait for the reminders from the insurance company. You can set up your own reminders and be more alert and proactive on this.

Let us know if you knew about this information or not ?

10 ideas to create Passive Income or alternative Source of Income – (Part 4/5)

In the last article of “Increasing income” series you read Anupam’s real life sharing about how he created his second income (we thank him for sharing his experience with our readers). Today let’s go a little deeper and learn ways by which YOU can also create passive income stream, which means ways of income where you do not work actively and still the income is generated.

ideas to create passive income
We can see that a lot of you are interested in creating passive income but you don’t know from where to start, so after reading today’s article take at least one committed step to create second source of income in your life. After you complete reading today’ article, in comments section share at least one new idea for creating passive income.

We are a community of 50k+ people at jagoinvestor, if we all share one good idea for creating passive income, imagine what kind of passive income idea bank we will be able to create.

The rich get richer. Not only because they have surpluses with which to invest, but because of the overriding emotional release they experience from having wealth

– Stuart Wilde

I really want you to take a day off from your routine life and name the day as “PI day” of your life. On this day, you won’t touch upon any other area of your life,you will only think about creating passive income and nothing else. As next step create a special kind of account in your life called “P I income account”, in this account you will accumulate passive income, it should not come from real work or from active job. Passive income is the kind of income where either your money works for you or your people work for you.

10 ways to create passive income

(Do not discard ideas instead start thinking how the ideas can get into your life)

1. Rental Income from Real Estate

You can create rental income with the help of real estate. If you have more than two properties, the rent you get from one can help you to pay the EMI of other property you own. You can give your office space on rent or your second house on rent. You can also create either boys or girls hostel, if you have more than 1 flat on the same floor. Some even create small office units in one big commercial space and they give it on rent to people who do not have frequent visitors.

Make sure that you are selecting right people and legal aspect is taken care of. If someone (only if you are the owner) has good office space in Pune, we would like to touch base with you. (In 2015 we would like to establish jagoinvestor office in the city of Pune).

2. Buying Space for ATM Centre

This is one of the best ways to create passive income. Generally in a building, the space which is below the stairs gets sold at lower rate as compared to other offices and it is ideal place for ATM Centre. Banks can even pay upto 25k-50k per month to ATM centre owners in big cities, but again it depends on the location and the area where you own your space. There is a detailed discussion on this topic here

3. Buy extra Parking lots and renting it later

Parking is one of the biggest problem that everyone is facing today. One of our clients created passive income from the parking space that he owns in his building. Also I know someone who owns open plot next to a multiplex; he gave his space on rent to multiplex for parking purpose. This may not be possible for all but as I said do not discard ideas from your life.

4. Create Websites & Blogs

The machine age is over and we now leave and breathe inside information age, where no one cares where your office is or how many people staff you have, with the help of internet from a remote place you can create a lot of money. Creating a blog or a website is almost free (or I can say it is not very expensive) and is one of the best ways to create passive income.

You can do this as a part time activity and start creating second income in your life. This may be a slow process and it calls for good content for you to attract people to your blog or website. Jagoinvestor as a blog started very small and with the love and trust of our readers it has now created a special space in investor’s community.

5. Advertisement hoarding on your building and terrace

If your building is on main road with proper visibility you can put some banners or hoarding on the terrace of your building or even in garden or open space of your building. If you own terrace rights the money will come to you otherwise, it goes to society kitty as passive income. Some permission & authorization is required to take this step.

6. Interest income from your investments

This is one of the simplest ways to create passive income, which is in everyone’s reach. You can either create interest income through Bank Deposit products or by offering loans to people at attractive interest rate. For this your need cash on hand or pool of money from which you intend to create interest income.

7. Dividends from Stocks and Mutual Funds

You can either receive dividends through Stocks or from different mutual fund schemes. This income depends on the performance of stock and mutual fund which is linked with market conditions. There are many people, I know who create good dividend income from stocks and mutual funds.

8. Royalty Income

Your talent can help you to create passive. You can put something in a book on Amazon Kindle and it can be shared with the world, your book can help you get royalty income. Most people are disconnected with their true talent which is not good for creating second income. You really do not need a publisher you can either self-publish it or get in touch with websites who promote new writers.

We started with one book and now we have four books which are written for investors and advisors, our publisher has already assigned us two more writing assignments.

9. Referral business model

If you are into business you can create a strong referral business model by which your overall business strength increases. Here with the help of referral model not only does your business expands but you also get an opportunity to create passive income as an entrepreneur.

10. Buy cars and give on rent to companies

Many BPO’s and companies hire vehicles on contract. Some people buy vehicles and they offer their vehicles to the company they work with. This helps them to create passive income out of it. Here you need to be careful about the terms and conditions and choosing right driver who will be handling your vehicle on daily basis.

Project called “Passive Income”

If you do not have passive income it means you have yet not created “passive income” as a project.  In our book “11 principles to achieve financial freedom” you can learn more about creating passive income and how you can convert your dream of creating passive income into a project.

Just place your hand on your heart and ask yourself, “How many attempts in the past I made and I failed at creating passive income? (may be zero attempts). You are unable to create passive income because you are glued to the idea of only creating active income in your life. You haven’t failed much because you haven’t yet started fully playing for creating passive income.

Come on, make list of possibilities, make list of people who can help you, see what leverage you can get in creating passive income, see what best you can do with the resources you already have, what talents you have in you that can help you create passive income or take professional help, if required. In the last article of increasing income series we will have a strong completion and for what we invite you to share your key insights in the comments section.

This week action

Take a day off from your routine and name is as “PI day” (Passive income day)

Do some brainstorming and come up with ideas for creating passive or residual income. Do share one idea in comments section for creating passive income

Everything you wanted to know about Income Tax Notice and scrutiny cases ?

If you are a taxpayer then you must have heard the recent news about Income tax department’s drive by keeping a close eye on all your transactions. Even the salaried employees are on the radar.

Department has already identified 12 lakh taxpayers who have not filed their returns, more than 20 Crores high value transactions are being scrutinized and Notices/letters to more than 1.5 lakh people have already been issued.

Income Tax Notice - How to Avoid

8 reasons why you can expect income tax scrutiny notice?

Let’s take the first parameter today and see how & under what circumstances a notice can be issued to you as follows:-

Reason #1 – You have not filed your return

Every individual earning more than Basic Exemption Limit i.e. Rs. 2,50,000/- p.a. (Basic Exemption Limit has been enhanced from Rs. 2 lakhs to 2.5 lakhs in the last union budget for current financial year) needs to file tax returns compulsorily, even if the tax is already deducted (TDS) and paid .

So if you have not filed your returns for past few years, then you can expect a notice from IT department very soon. You might have not filed it due to your laziness or simply because you didn’t get the time, but understand that this mistake can cost you a lot especially when you have some any kind of tax evasion !

Reason #2 – Interest from FDs or Savings A/C

This is one big reason which can apply in most of the investors case . Generally banks deduct 10% TDS on the deposits interest by default, but you are suppose to pay any additional tax if applicable depending on your income tax bracket. There is a big myth that one does not need to pay any tax if TDS is cut by the bank.

For example – If you are 30% tax bracket and you have Rs 5 lacs FD in bank and imagine 8% is the interest rate, which means you get a Rs 40,000 interest from the FD , now the bank will deduct the 10% TDS (which is Rs 4,000) and pay to the govt , and give Rs 36,000 directly to you .

Now actually tax you had to pay was 30% to govt, which means that at the end of the year you need to pay additional Rs 8,000 in tax. If you have not done this , then you might be inviting trouble for future.

Reason #3 -Sudden drop in Income

Do you know that if there is a significant reduction in your income from last year, then it may cause suspicion and you might invite a IT scrutiny. This is more applicable in case of businesses and traders, because their income is highly volatile .

However in case of salaried people, this is not a big issue because in general there is no huge drop from the last year income. Let me give you an example – Imagine Ajay, who runs a business and earned Rs 15 lacs in a year and paid his taxes properly in year 2014 .

Now in 2015, he files his income tax returns with Rs 12 lacs income or Rs 17-18 lacs income, this looks natural overall , but imagine he files his return declaring his income to be Rs 3.5 lacs, then suddenly it raises some eyebrows and the IT department might want to talk to you . It might happen that you are not doing any tax-Chori, but IT department might want to enquire .

Reason #4 – Claiming Higher refund amount

If you have filed your returns claiming a high refund in a particular year, there are chances that you might get a scrutiny .

This is because firstly, its a higher amount to be refunded back to you , so naturally tax department might want to have a look at data and might question things (otherwise everyone will start asking for refunds without solid reasons) , and secondly – the refunds are generally a lower amounts because of the mismatch in your planning or some calculation and any big tickets will attract eye balls .

So if you have paid Rs 2 lacs tax, and you are asking for Rs 15,000 Refund or Rs 35,000 refund . It looks fine .. but if you ask back 90,000 refund, that might attract scrutiny.

Reason #5 – Mismatch in TDS credit

You need to check & reconcile your form 26AS with all the taxes as paid on your account . It should ideally not happen that the TDS amount you are claiming in your income tax return and the TDS actually updated in your form 26AS are different .

That’s why before filing your returns, its an important thing to check your 26AS , make sure its updated properly (check with your employer who has paid TDS, check with banks who paid TDS on your interests) . Only once everything looks fine, then claim the TDS amount . Don’t assume things like (my employer must have paid TDS and updated it properly) .

Reason #6 – Non Declaration of Exempted Income

There are various income’s on which you don’t have to pay income tax , but they must be still mentioned in the income tax return . Things like your long term capital gains tax from equity/dividends received on equity shares of Indian companies/Saving bank account interest up to Rs. 10000/PPF interest , or lets say gifts you receive from your parents/relatives ..

These are some of the things which are exempted from tax, but that does not mean you don’t have to tell the income tax department about it and you should anyways not hide it because there is no reason for it. I know a lot of people might be feeling – “Since it is already exempt, then what is the need of declaring it, I have never done it for last so many years!”  .

So now as you know make sure you take your income tax filing very seriously, because till the time you don’t get IT scrutiny its not an issue , but the day you will get it, you will know it’s a pain

Reason #7 – Taking double benefits due to change in Job

Many times salaried employee who changed job during previous year gets multiple form 16 & fails to declare income from all the employers & calculate and pay the due taxes, if any. It may arise on account of certain deductions & benefits given twice .

Many times, it has been observed that when people changes their job during  a year they forgot to inform about their previous income to their new employer or if at all they have declared it, they forget to make sure that it has been duly incorporated while calculating their tax liability and arriving at a TDS figure and because of this failure, new employer will deduct taxes on the income which will go from their side by giving and allowing all the deductions like 80C/section 10 etc.

All over again (as the previous employer had already factored the same while paying TDS) and also basic exemption limit and initial tax slabs benefits are also given again resulting in lower deduction of taxes.

But due to lack of this technical knowledge along with a pressure and joy of a new job this goes unnoticed and there is a shortfall in taxes which was supposed to be deducted and paid to the government; so beware when you change your job and inform previous employer income duly to your new employer to avoid getting an IT notice.

Reason #8 – High Value Transactions

If you have executed high value transactions either for investments or spending then chances of you getting the notice from IT Department are very high.

For example – Your credit card usage of more than Rs. 2 lakhs p.a./ investing in FDs for more than Rs. 5 lakhs/ depositing more than Rs. 10 lakhs in your bank account/ investing more than Rs. 2 lakh in MFs or Rs. 1 lakh in Shares or buying or selling property over Rs. 30 lakhs.

All these transactions are reported to the IT department under Annual information Returns filed by respective companies and may attract an enquiry ranging from simple to exhaustive by IT department.

How to Avoid getting Notice from IT department

With the IT department becoming net savvy and going online, it has become very easy for them to identify discrepancies in your papers and to keep a close eye on almost every financial transaction you do.

Even the honest taxpayers have received notices and have come under the scrutiny causing them running around to prove their honesty. Hence it becomes very critical for everyone to maintain their papers & documentary evidences properly to safeguard their own interest.

Here is sample of how a tax notice looks like in reality. I have scanned and uploaded a real life tax notice for you to look at below

Income Tax Notice Sample

You need to take the following actions to minimize your chances of receiving a notice –

  • Always file your returns on time and correctly – This is the basic precaution you need to take to ensure 100% compliance with the law. Make sure you are filing the return correctly and all the details given by you while filling Returns matches with the details available with department.
  • Submit ITR V to Centralized Processing Centre (CPC) Bangalore: Your filing of taxes would get complete only when your ITR V reaches CPC. Just uploading returns online is not enough; make sure you get confirmation of its receipt from CPC. Please follow the Dos & Don’ts of sending ITR-V to CPC.
  • Check your form 26AS (Tax Credit Statement): “26AS” gives the details of the “TDS” deposited on your behalf. You should check all the TDS payments duly credited to you or get it rectified otherwise. It can be viewed though NSDL or IT department’s site and even through Bank’s online portal.
  • Mismatch in Income & Expenses/investments:  If your income was Rs. 10 lakhs and you invested Rs. 25 lakhs, you need to justify the source of used funds and the same applies to expenses also.
  • Gifts/Money credited to your account: If you have funds credited to your account out of Gifts or loan from relatives/ friends, you need to keep the documentary evidence for the same. You may also need to report these transactions in few instances.
  • Declaring “Exempt” Income: Even though few Incomes are exempt from the tax, you still need to declare this while filing your return.
  • Updating PAN details: Keep updating any changes in your pan data like address/surname change post marriage etc.
  • Pay Advanced Tax: if you are liable to pay advance tax, then you have to pay it as per its schedule & deadline.
  • Form 15H or 15G: Use 15H/15G instead of claiming refund, submit this at all the financial institutions like banks to prevent them from deducting TDS on your investments with them; in case your Income is below the taxable limit.
  • Avoid High Value transactions: Department gets information for all your high value transactions from the concerned institution and chances of you coming under scrutiny increases. Avoid these transactions wherever possible & plan it carefully and legally.

How to deal with Income Tax Notice if you are already in receipt of one?

Any communication from IT department & especially receiving a Notice can send shivers down your spine, even though it might be a routine enquiry or a simple clarification sought. Notice can be issued for varied reasons and there is no standard single solution to deal with different notices in the same way, but you can surely follow these 6 steps steps as mentioned below in response to any kind of notice you may receive:-


Step 1

Neither Panic nor Ignore –  Your first reaction could be to press the panic button or ignoring it completely due to ignorance, both ways are wrong and key is to handle this carefully and sincerely else you may end up paying hefty penalty along with tax payment.

Step 2

Check if its issued in your PAN – Department issue notices based on your PAN and not by name, so make sure notice is issued in your PAN and do not pertains to someone else who shares similar names or DOB as yours!

Step 3

Identify the reason behind issuing a notice – Reasons could be a simple mismatch in TDS or inconsistency in your returns or some serious concerns like income concealment or survey or scrutiny of accounts.

Step 4

Check Validity and Issuer Details – Check the validity of a notice & timely issuance and under which IT section it has been issued and also look at the mention of officer in-charge, his or her designation, signature, address with details of ward & circle no. etc. Verify these details in view to avoid being cheated.

Step 5

Check DIN – If the notice is delivered online then check document identification number.

Step 6

Preparation two sets of documents and covering letter – Start collecting documents which you are asked to furnish before the assessing officer or based on the gravity of the notice. and make sure you prepare a covering letter along with the set of documents. Prepare two set of all the documents required to be submitted to the department along with a covering letter, get a stamp on your copy for your record purpose and as a proof of submission of documents and complying with the notice. You can also consult a CA for his help in drafting the proper income tax notice reply letter

3 Important Points you should always remember

  • Reply in time – Always reply in time even if you are not able to collect the required documents. You can even ask for some time to prepare the same. It would establish that you are honest and cooperating with the laws.
  • Preserve the Envelope: If you receive the notice in an envelope please keep the same safely as it contains Speed Post number which work as an evidence of its delivery to you.
  • Professional Help: If the gravity of notice is high then it would be prudent to have a CA represent you (you can hire us for your issues or any other income tax related problem). Otherwise you can follow the above steps and represent yourself in most of the cases.

One of the major steps that you need to take even otherwise is to keep track & records of all your Tax papers & financial transactions for the last 6 years as it will help you substantiate your claims in case of any scrutiny.

I hope this guide has given you enough knowledge about the income tax notice and why scrutiny cases happen . If you just take care of few things, you can surely lower the chances of getting income tax notices. Let us know what all did you like and if you have any questions in the area of income tax ?

This article is guest post by Rishabh Parakh, a Chartered Accountant by Profession & Founder Director of Money Plant Consulting, which provides services related to income tax filing, scrutiny cases and various other CA related services with operations in Pune, Mumbai and expanding to other regions.

Interview with Anupam on creating 2nd income source along with his regular job – part 3/5

Do you want to know how someone created his 2nd income other than the regular 9-5 job ? In this 3rd article for “increasing income” series (part 1 and 2 here), we present an interview with Anupam Mehra from Bangalore, who is one of our blog readers and has agreed to share his story of creating second income in his life. I was very impressed with him because he has done something which most of the people only imagine and never make it a reality by taking extra efforts for whatever reason.

Having Second Income in India

So I mailed Anupam 7-8 questions to answer, so that it can be shared with you all. I am sure you will get some great ideas from him, a lot of motivation to something similar in your own life and at the end, lets start a new kind of culture on this blog where we share our knowledge with others so that it can enrich others life in some way.

Here is the interview ..

1. Can you share very quickly about yourself and what you do right now in job ?

I have post-graduate degree and have about 8 years of experience. My education and profession are in the same field, Electronics. I have broad range of experience in all aspects of product design. I was lucky in a way that in both the two companies that I worked for, there were no set job definitions. For example, some companies have set roles like development, testing, documentation, verification etc. But, for me I had to do all of this at some point of time. This helped me gain good experience overall. I think for all new graduates, embrace this sort of opportunities since it will give you a good idea on what interests you. You can choose to specialize in something that really interests you as you gain more experience.

For me alternate source of income did not mean alternate field of profession. I am really passionate about my area of work. Initially for earning 2nd income, I completed a few projects on freelancer websites like Elance and others. Some of the projects were not related to Electronics, for Ex: Visual Basic Automation, but for most part I did projects in my field of interest only. Some of the projects I quoted a very low price to ensure I got the project. For the past one year, I have been consulting with a US-based company. I am guiding a group of engineers in verifying a very complex design. I have provided a lot of automation tools that I developed, which is helping the engineers improve their productivity.

2. How does it feel to have another source of Income apart from your professional active job income?

To begin with, I wanted more control in my career. I did not want to worry about layoffs, appraisals, not getting onsite etc. I also wanted to see if I can get better at what I do. Of course making more money feels really great. I feel content professionally which makes be feel relaxed at home and I spend more “quality” time with my family. It just means I can save more (and of course my wife thinks she can spend more…).

3. Was it tough to start earning alternate income ? Because most of the time everyone has this complain of “not having enough time” ?

Not having enough time is the first thought that will come to our mind. To being with, I evaluated how much time that I spend on unnecessary activity. One of the first things that I did when I started freelancing was make a commitment not login to facebook, gmail, whatsapp etc while at my work. I am required to spend X amount of hours at work. I was determined to use all this time efficiently such that I would not have to spend extra time in the office. Of course, sometimes I would have to work 14-16 hours a day to meet some deadlines. But mostly I wanted to be disciplined and not spend extra time in the office unnecessarily.

And the good thing about freelancing is you can do it in your own time. After I come home “early” from work, I would spend time with my family, do all the regular stuff, put my 2yr old son to bed and login to work. This sometimes would work well, since my clients would be in the US or UK and the time works out perfectly. I would also wake up at 5.30 a.m. instead of the usual 7.00 a.m. on weekends just to get some work done before my family wakes up. At any point I have not worked for more than 15 billable hours a week. I had made this clear to all my clients as well.

4. How did you identify that you can earn alternate income – Because most of the people complain – “I have no idea what can I do other than my job ?”

The starting point for me was, identifying my strengths. What it is that I can offer better than most? How much time can I spare comfortably on a weekly basis? I explored teaching options that are available, both offline and online. I started off with this initially. As I mentioned before, Visual Basic programming was a hobby for some time which I used to generate some income. Basically once I had an open mind, I was not hung up with the type of work. I was more interested on the service that I can provide and its quality. I offered real value for money initially as I built my reputation on the freelancing websites and then slowly picked and chose which projects to bid/work on. So the question is “what skills do you possess that you can leverage to generate an income?

5. What is one single thing you consider as most important thing one should have in them if they want to create second income source of income ?

Attitude – “Go-Do”

What I mean is I lot of people including me used to have these great ideas when having lunch/tea with colleagues and friends. Some of us have this frustration that “I am wasting my time”,” I should be doing a lot more”, “common guys, let’s start a company on our own”.

But somewhere in the daily grind, we remain in inertia… mostly because we want that comfort zone. You are the CEO, CFO and CTO of your one-person enterprise, be it being employed in a company or working for an alternate source of income. Having the great attitude of believing that you can do it and offer outstanding service to your clients will surely help you succeed.

6. Do you think now when you have a 2nd income source, you have higher confidence to start a 3rd alternate income source too ?

Absolutely! The possibilities and opportunities are limitless. I have just started. I intend to continue this. Some of my ideas require me to invest some capital. I have earmarked a percentage of my Additional Income to fund these. Multiple sources of income -> that’s the long term goal.

7. How has your financial life changed after you have started getting an alternate source of income ? Have your savings gone up ? Has your quality of life improved ?

I have to mention this here. My following of Jago Investor started when trying to correct my mistake of investing in endowment plans. So in the past two years I have corrected my initial mistakes (with the help of Jago Investor blog, Pattu Sir’s Blog etc) as well as started generating my additional income. So, both of these two factors have definitely improved my financial life. My wife and I made a combined decision on what percentage of regular income and additional income we will save. Rest is for spending. By doing this, we are living and saving comfortably.

We save most of our additional income by the way. We do not want to get used spending away this income as it might cause lifestyle inflation which might be difficult to recover from.

Since I am spending my personal time with generating additional income, I am more conscious on spending time with my family. I try to make it “quality” time. I regularly take casual days off where I am completely cutoff from both regular and additional work. I must say I have a supportive wife as well.

This additional income helps me in not worrying about the small stuff. Instead of worrying about the expense most of which is not in my control, I “worry” about increasing my income. This has led to a smoother family life.

8. Do you think having an alternate source of income is some kind of luxury or something which everyone should mandatorily have ?

Different folks, different strokes Manish!

It would be nice to have. I also recognize that some people will not be able to do it. Some folks might genuinely not have the time or would love to spend every free minute with their family or would be really happy with what they earn. My suggestion is people should evaluate if they really want to and can work additionally to generate an income.

Second source of income builds in some security in case of loss of regular job for whatever reason. It could also be a way for a person to transition from a regular job to full-time entrepreneurship.

Sometimes I also wonder if hours of research while choosing a mutual fund which can generate additional 0.5%-1% returns is worthwhile. Can this time be better utilized in updating skills and working for additional source of income?


I would like to thank Anupam to accept my invitation to share his answers for my questions and share it with everyone else. I am sure you must have learned few things from this interview. You might have also got some validation from this interview about your own imagination and thinking. You can also see that someone has really done it and it works and now you will do it in your own financial life

Next week in the 4th part of this series, we will be talking about passive and active income and some ideas around it.

Now the question for you is – Are you working on creating alternative income source somehow ? Have you tried it ever ? and failed ? or succeeded ? Please share whatever you want in comments section below and lets have more conversation around this topic !

How Top up loans are good alternatives of Personal Loan ?

Imagine you already have a home loan and now after few years of payment, you again need some extra loan for some purpose? What would you do? One would ideally think of applying for a fresh loan from scratch and might get it too. But there is a faster option to get a loan if you already have a running home loan and its called top-up loan.

Top up loans

How does top-up loan works?

When you take a home loan for the first time, you have some home loan eligibility up to which you can take the loan. If you have consumed that full limit, then you are not eligible to get any further loan immediately, but over the years when you have paid back some part of your loan and if your income has also increased, then it may happen that your loan eligibility has gone up. At that point, you are eligible to take up a top-up loan which is over and above your existing home loan. What exactly happens if you get a loan up to an amount of your loan eligibility minus your existing outstanding loan.

Almost all the bank rules say that you are eligible for a top-up loan only after 6-12 months of paying off the earlier loan because only after some time is over, your loan eligibility changes.

Let’s take an example

Assume that Ajay, a software engineer working in Bangalore has an income of Rs 10 lacs a year. Assume that his loan eligibility was Rs 50 lacs and he takes a home loan of Rs 45 Lacs. Now assume that he has serviced the loan EMI for the next 3 yrs and now his overall income has gone up to 12 lacs per annum and his outstanding loan balance now is only Rs 38 Lacs. Now based on his current income, his new loan eligibility is 55 lacs.

Now if he applies for a top-up loan, the bank will deduct the 38 lacs of an outstanding loan from his new loan eligibility of 55 lacs and only provide him 17 lacs (55-38) of the top-up loan. The documentation and the overall process will be faster in this case, as there is an existing relationship and also the history is known by the bank. Below is the graphical representation of the same example I took above.

Top up loan example in India

You need to have a good repayment track record to avail a top-up loan. Just because you have some loan eligibility does not mean that there is a guarantee of getting a top-up loan. The final decision is always with the loan provider. The bank will also investigate with you the purpose of taking the top up loan. Below you can see for what purpose the top up loan can be taken.

  • Renovation at home
  • To be used as a personal loan
  • To buy another property
  • To buy a plot or Land
  • Purchase of consumer durable products
  • Children’s marriage/education
  • Business requirements
  • Medical expenses

5 Benefits of Top-Up Loan

Benefit #1- Tax Benefits on a top-up loan 

You will get tax benefit on a top-up loan only if the loan amount is used for buying a house (on principle and interest) or if you are using it for renovation purpose (interest part). For any other purpose, if you use the money, you will not get any tax benefits.

Benefit #2- The interest rate for a top-up loan 

A The interest rate for the top up loan is around 1.5% to 2% higher than the home loan interest rate of the bank, which means it can go up to 11.5% to 14% finally.

Benefit #3- No Security Required

A top-up loan does not need you to mortgage some asset, because its given on top of your home loan and anyways your home documents are with the bank. So one important point to note here is that even if you close your original home loan, you need to also close your top up loan before you can ask back your original house papers from the bank.

Benefit #4- Top-up loan amount 

 Generally, the amount of top-up loan cant exceed the original home loan amount you have taken and also there is always an upper limit defined by the bank for the top up loan, which can range anywhere from 15-40 lacs. So if you have taken a Rs 30 lacs home loan, you can take the maximum top-up loan of another Rs 30 lacs if your eligibility supports you after some years.

Benefit #5- Processing Fees

Almost all the banks will charge a processing fee for approving the top up loan . The charges are same as their home loan processing charges . For example – if you take a case of HDFC LTD , the charge 0.75% of the loan amount or Rs 2,000 which ever is maximum as the loan processing charges for the top up loan.

Top up Loan is a good alternative of Personal Loan

By now you must have understood that a top up loan is a much better alternative to a personal loan. there are a much higher chances of getting a top up loan if you already have a home loan and have a clean and good track record of payment in past. Also if you have already passed 3-4 years of your home loan repayment , you can get a decent amount of top up loan. Given the interest rates of personal loan can be as high as 18-24% , its always a good idea to try for top up loans.

Let me know if you knew about this concept or not ?