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Why you should collect NOC (No Objection Certificate) once your loan is complete ?

Posted on by Jagoinvestor

Once you pay off your loan, a big responsibility is off your mind and you feel relaxed. Its a moment where you do not want any further run around and want to now move on to other things in life.

And this is exactly why most of the loan customer do not collect a document called “NOC” or “No Objection Certificate” from their lender and it can get them into trouble later in life. At some places you will hear the word “No Dues Certificate” , but generally most of the executives in real life use the word “NOC” only

Read the incident below to understand its importance

importance of NOC No objection certificate

What is NO Objection Certificate (NOC) ?

With reference to loans, An NOC or No Objection Certificate is a legal document provided by the lender which states that the loan has been complete and their is no outstanding to be paid by the customer as on a specific date. Whenever a person pays off a loan, its important to take this NOC document from your lender.

How to get the NOC ?

Generally, all the lenders dispatch the NOC document to your registered address once your loan is complete. However at times, people do not pay attention to it and loose out on it for some or the other reason. Also if the registered address with lender is your old address (suppose you changed the address in between the loan), then also you will miss the NOC document.

So if you do not get the NOC, better contact your lender and ask for it specifically.

What kind of problems can happen if you dont have NOC ?

A lot of people think that just because the EMI’s are paid off fully, the job is done. However its extremelly important to have a legal document with you which clearly states that you do not owe anything more to then lender.

This way you are protected legally and if someone claims later in life that you owe more to the lender, you can produce the NOC if required. I would like you to have a look at the incident below which create some issue for one of the loan customer, who had paid off the loan, but didnt have the NOC with him

Hi Manish,

I have taken a personal loan from Bajaj Finance in the year 2004. All along, I have been thinking that I have paid the loan. To this effect, Cibil report also says, there is no balance outstanding and the account is closed on 31.12.2008. I don’t have NOC.

Today, I have received a call from a Lawyer saying that he has a summons to arrest me and I need to pay the balance amount of Rs.3750/- and that too I need to pay before 3 pm.

Could you please responds me as to what should I do. My question is will he really have Summons or just he is threatening. I can pay, but he is asking me to pay beofre 3 pm. That’s what I am not able
understand.

Here is another incident where Rahul settled his outstanding credit card dues with Standard Chartered bank and didnt collect the NOC . Then after many years he got a notice from the bank to pay 7.7 lacs. Here are his comments

Its been 12 years now, and I dont have the copy of NOC (or No Dues Certificate) with me. How do I prove my case as SCB isin’t ready to check me credit card history to see where the problem was. They just keep saying “they can’t retreive the information as they have sold those accounts to saha finlease.

And what about the notice they sent me asking me to attend conciliation camp to be held on 11th November?

Read the full incident on our forum

How NOC can help you in future if some problem arise

NOC is a legal document which has weightage . It proves that you really have paid off the loan fully and if there is any confusion, then NOC solves it.

Read these two incidents which were shared on our forum and you will understand its importance

Dear Manish,

Same problem as Sandesh I had with Indus Ind Bank Kolkata recently. They told me that my score is very low so they are not considering me. However, I submitted them my CIBIL Report which clearly says 763. There was an issue with a credit card which I cleared 1 year back.

I submitted them the NOC too. The HR here told me that she has forwarded the details to her central office. Now I am waiting to hear from them.

(Source)

Dear Ravish,

If you have the NOC issued by the bank, saying all dues have been cleared and there is nothing pending, you can get a loan. But as Dear Ashal has suggested file dispute with CIBIL and wait for 2-3 months to get it rectified.

I had the same experience about 3 years back and credit card in question was issued by HSBC. I got the NOC issued by HSBC and applied for loan with HDFC, while submitting the application I informed HDFC about the HSBC story. Later on, HDFC asked for the NOC and cleared my loan.

(Source)

Go get your NOC right now

So now, if you had any loan in past which you have completed and paid off, make sure you have applied for the NOC and keep it safely in your records

Does your Income tax website account have your CA phone number ? You can now claim it back

Posted on by Jagoinvestor

Let me start by sharing with you what was the situation of millions of tax payers in India till now.

If they wanted to do e-filing and went to income tax website and tried to login to their account, they failed at it, because they did not have the password, because it was created by their CA’s or someone else who assisted them once in filing their tax.

And the person could not even use the “forget password” option, because it asked for some information like Phone/Email to send the OTP pin or authentication link and obviously their phone and email was not used while creating the account.

And this meant depending on the CA for this. However recently Income Tax Department has taken strict action on this. Income Tax department has sent an email to all the income tax payers to update their emails and phone numbers if they want to do that.

Now as per new rule, A person can use his phone/email on maximum 10 accounts (now CA’s wont be able to update their personal phone/emails on all their clients, which is also a bit big issue for most of the CA’s , because a lot of their clients are not net savvy and its very convenient for CA’s to manage their accounts)

Anyways, Here is a an email snapshot of the email which was sent by income tax department.

email from income tax website

More details on this page below

https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/Update_Contact_Details.pdf

How to update your Phone Number and Email on income tax website

If you are a new user, then its very simple and you can just go to their website and create a fresh login/password. Now its mandatory to give phone and email id. There will be one time password (OTP) sent and authenticated.

Now if you are a registered user (your PAN is your User id) and if you want to make sure that the full control of your login is with you, then make sure you update your email and phone on the website.

Here is what you need to do to update your phone and email on their website

1. Go to https://incometaxindiaefiling.gov.in/ and try to login
2. Click on “Forgot Password” link and put your User id (your PAN) and move ahead
3. One the next pages you will get an option to update your email and phone.
4. Choose that and follow the steps.

Below is an image snapshot of how it looks like

Change your Email and Phone on Income Tax website

Note that there is also an issue with this new move, because now any person who has information about your details can create a new email and phone and can use that to claim an account (assuming he also has information about the bank details which was used by the person) .

A lot of CA’s are also not liking this change by the income tax department, because now their clients will go away as they are not under control of their CA’s .

Would like to know what you do you think about this move by IT department.

10 smart actions every Indian Parents should take, once their baby is Born ?

Posted on by Jagoinvestor

When a new kid is born, your entire life changes. You are excited to enjoy the new phase of your life. Today we are going to touch upon some basic things you should watch out for and focus on after your new kid is born.

These are few things which you will eventually complete, but if you are too late, you might end up waste your time and energy. So its better to learn from others mistake and take some actions before hand.

Things to complete in your financial life once a new kid is born

Note that we are going to look at only those things which are related to personal finance at some level. Also most of the things are generic in nature, so if you do not agree to some, just move on and do not implement them for yourself. Lets look at them one by one.

1. Review your Life Cover

Once your kid is born, a new life comes into existence. Its now an additional responsibility you and your spouse have on your shoulder. All the future and current expenses needs to be taken care.

Think about it, all the school expenses, future education expenses, providing for all the best things in life – This all is going to cost a lot of money and the breadwinner is going to provide for that. So, If something happens to breadwinner, your life insurance should provide all these expenses.

So make sure you increase your life cover after reviewing all the numbers. In case you have not yet taken any life insurance, I strongly recommend now get a life insurance plan. As a thumb rule, I think increasing your life cover by Rs 50 lacs is the minimum you can do.

2. Get the baby added into Health Cover

If you already have a health insurance plan (either bought yourself or through employer), make sure you add the kid to the policy the moment they are born. If you do not have the health insurance yet, you can now get the health insurance and make sure the kid is part of the policy.

Some policies already cover your new born kid without any extra premium from the birth itself provided they have also paid for the maternity claim in the same policy.

As an example – Family First Health Insurance from Max Bupa has provision for new born babies from the day they are born and even cover vaccination costs for the first year. Look at the snapshot below

add newborn baby in health insurance

Below is the vaccination chart along with the age, vaccination name. It will help the new parents.

vaccination chart india

3. Start a Recurring deposit for upcoming school expenses

We conducted our workshops in 3 cities in India and one of the common point most of the participants agreed on is that school expenses on a yearly basis are in the range of Rs 50,000 to Rs 1 lac per year. Even the pre-schools are costing a bomb now, which can range anywhere from Rs 25,000 to 2 lacs per year.

Below is a report on pre-school charges in Bangalore from Times of India

Some pre-schools also double as creches providing day care, and charge astonishing rates. One such school in HSR Layout charges Rs 1.38lakh per year for day care of kids up to two years old. Timings are 8.30am to 6.30pm — one hour less costs Rs 1.25lakh, and till 3pm, it’s Rs 96,000.

There are some pre-schools that charge up to Rs 1.5lakh. A prominent national chain, with a branch in Indiranagar, charges around Rs 80,000. On an average, Rs 30,000-35,000 is what you will need to give your child a headstart in life. Most schools have also started their own pre-schools, from where the children automatically move on to nursery.

As these expenses will arrive in next 2-3 yrs, its important to make sure you are ready to arrange the money for this. The most simple way to plan for this short term goal is to either open a Recurring deposit in your bank or start an SIP in a debt fund.

If you want to plan investments for your children education or overall financial planning, you can leave your details on our services page and we will get back to you.

Coming back to the point, As an example, suppose the expenses are going to be Rs 45,000 and if you have 30 months in hand. You can just open a Rs 1,500 RD and when it matures after 30 months, you will have that money with you.

When I asked for some suggestions on this topic one one of the facebook groups run by Ashal Jauhari. Pattu gave an interesting point regarding School Expenses in the start. Have a look at the conversations below which was part of the long discussion in the thread there

school expenses for kids

4. Update your Nomination’s in various financial products

You might want to have your baby nominated in some of the financial products you own. It can be your bank accounts, fixed deposits, mutual funds or even some property. You might want to add your newborn as one of the nominee in the assets you own. Read more about nominations in this article if you do not understand what exactly nomination is.

Also, if you have written your WILL, then you might want to update it soon after the baby is born. If you miss this, and if you old WILL didnt have the right kind of wordings, then your baby might loose his/her share in your wealth in worst case.

5. Register the birth Certificate

Make sure you apply for the birth certificate for the new born asap. It is a simple process if you complete it in the starting itself, else it will get complicated later. Most of the hospitals anyways has this as one of the mandatory things you need to do.

You can get the form from the hospital itself and then submit it to the local authorities within 21 days of birth. This page mentions the procedure in detail in-case you want to have a look.

6. Start a Saving Bank account for kid

One of the best things you can do for the kid from the start itself is open a saving bank account for the new born the moment they are born. Almost all the banks have facility for kids to open their bank account. For example – ICICI Bank clearly mentions that any kid starting age 1 day to 18 yr are eligible to open a bank account called “Young Stars” with them.

I would like to draw your attention on 3 reasons why you should open a bank account for your newborn kid.

Reason 1 – Put all the Cash Gift in the Kids Bank account

The moment your kid is born, for next many months and years – you will start getting lots of gifts in form of Cash. Often this money is not handled properly in families because of its small ticket size and it gets consumed here and there and finally evaporates.

You can always make a rule that all the small/big money coming in the baby name (on their birthday’s or baby shower functions etc) will be deposited in the saving bank account opened for the kid.

Reason 2 – You can open dedicated long term investments for your kid’s future

Another reason why you might want to open a saving bank account for the kid is that if you want to invest for your kid long term education or any other thing. You can make sure you start the investments from the kid account itself.

This way the account will be dedicated for that purpose and your volatile decision making will not impact the savings for kid. You can either invest in Kids PPF account through this account or do a SIP in equity mutual funds for long term investments needs.

Mr. Jinesh Shah from in one of the facebook group shared what he does for her kid.

bank account for newborn kid

Reason 3 – Your kid will learn about banking and personal finance from very start of his life

Another good reason for opening the bank account for your new born kid is that once he/she turns upto 8-10 yrs, you can allow them to partially handle their own bank account and teach them banking aspects.

Learning that they have their own personal bank account will make them feel good and also they will take keen interest to learn these things, which most of the people learn very late in life.

Bonus Tip : You can also apply for your baby’s PAN card within few weeks/months of his/her birth. Anyways you have to make it later, so why not in the start itself. Its always a good practice to have a proof of identity in the start.

It will be handy if you want to apply for other kind of documents like Passport, bank account, etc . You can read this experience from Amit Gupta when he applied for PAN Card for her daughter.

7. Buy clothes and toys smartly – they’re often gifts

I know new parents are excited and want to give their best. They will buy lots of clothes and toys and no one has any authority to advice parents on what to do and what to not do. The emotional side of joy cant be suppressed. However Often new parents realized later that they have overspent too much on things which baby never needed.

In reality, for the first few months – the babies only sleep almost all the times and they grow so fast that things you had bought for them is now not needed by them. And when relatives and friends come for visits, they anyways bring lots of things you had already bought for kid.

So there are few tips which can optimize the expenses side and also help reduce the wastage done by many parents.

Rotate things among your group – There can be many things which can be rotated among parents for their new born kids. If you have some item which can be shared with some other new parents, then better share it with them and help them reuse things. There is nothing wrong in it.

Shop Slowly – Buy things one by one and not in a lot – If you want to buy something for your kid, start small – let the moment come and buy it. This way you will not buy things which are unwanted for kid.

Below is a survey done by Moneylife on the topic “The real cost of parenting” sometime back. It explains what kind of expenses families are doing on various stages for their kids. I am sharing the results for the age group 0-4 here. If you are interested to look at the full survey results, please read their full article here

8. Dont invest in CHILDREN PLAN

Yes, thats correct.

The moment you become parents, Apart from the joy and happiness, some part inside you will also be “very worried” about the kids future and how you will provide him/her best in life. This is the perfect mis-selling moment on the name of kid by various agents.

All the insurance agents (uncles and aunties) will come to you and try to sell you a CHILD PLAN. You will be sailing on the emotional boat at that moment and you will hear sentences like – “Gift you kid his bright future” and “This is the perfect thing you can buy for your kid in the start” .

While I am not against any policies and plans, but these Child Plans are often designed to exploit these kind of emotions and things are bundled in such a way that they look over attractive proposition to a new parents for their kid.

Inside the product its often the mix of insurance and investments with some kind of payout on regular basis. These are high on costs and a bit complex products. Its nothing but a slightly changed versions of ULIP’s or traditional insurance plans.

In case you are really impressed with those products, my suggestions is to wait for some months, and later study them properly and then buy them if you are fully convinced about them.

In general I would recommend any new parent to insure them with a simple Term plan and either open a Recurring Deposit or just invest in a simple mutual fund with SIP route to start with or you can follow this ready made calculator, I create sometime back for planning your kids investments

9. Have a 24/7 reachable Doctor nearby home

Medical expenses and Doctor visits are one of the top most expenses you will have to incur after the baby is born and for at-least first 1-2 yrs and you cant even avoid this issue.

You will have to travel many times to doctor. These visits are sometimes planned and often emergencies. You even might be in your office when you get a call from home that baby needs urgent attention and then you take a day off or leave early from office.

It helps a lot if the doctor is near you home or within few KM’s distance. At times people have their doctors as far as 15-20 km’s (for reasons like – “He/she is the best doctor I think”) and then in-case of emergencies it can take 2-3 hours to just travel.

So its always the best thing to have a good doctor nearby and try that they are reachable almost all the times. Ask their permission if you can call them anytime (day or night) and take consultation. Compensate them for their effort and they should agree.

10. Make a Baby Emergency Kit and save on Time+Money

This is a great tip shared by Nandish (He became father 1 yr back), while I was working on this article.

He shared that they have created an emergency kit for baby, which has medicines for the recurring issues and most common things which new parents will encounter all the times like stomach ache, teething issues, loose motions, fever etc. You can sit with your doctor and take consultations on what all to do in various situations without visiting them.

To show you importance of this emergency kit, I would like to share an incident which happened with Nandish. Her neighbor’s kid was having some issue around afternoon time, when her husband was in office and no one was there at home (I forgot the medicine name) .

She was trying to find out how she can get the medicine asap from somewhere. Because there was an emergency kit available at Nandish home, that common medicine was there and she could get it instantly. This is a small action, but it saved a visit to doctor and even a trip to market to just fetch the medicine.

This kit can also have wet wipes, extra nappies and every other thing you can imagine. Its even very handy if you suddenly have a travel plan (locally within city) and its going to take yours . Medimanage has put up a very nice starters guide for new parents, have a look at it.

Conclusion

The points if implemented will help you make your parenting journey more smoother and your financial life more better over long term. I know most of the people do not think about all the points mentioned above thinking they will handle things once they arrive, but then its your choice. Its a always a good idea to prepare for things well in advance and not wait for the last moment surprises.

Can you share some more tips which are not mentioned above. It will help people who are about to become parents or new-weds who will plan for their kids in next few years.

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

Meet this 15 yr old youngest participant from our Mumbai Investor Workshop + Some Pictures

Posted on by Jagoinvestor

We completed our Mumbai workshop just 2 days back on Sunday and it was a great experience overall to connect with our readers . However there were 2 most amazing experience which I want everybody else to know about.

Youngest participant was just 15 yrs old

Yes, you read it right .. One of the participants had booked a couple ticket and he choose to bring his young son who was just in school to make sure that he put the right seeds in his son’s mind about money and personal finance. We were really amazed seeing this and congratulated him on his attitude towards money and his commitment for this son future. The best part was that his son participated well and also shared what all he has learned from the session at the end.

investor-workshop-jagoinvestor-1

One of the best things about the workshop was that a lot of couples attended the session together, one person came along with his mother, another guy came along with his best friend and many participants also came along with their siblings . It was an environment filled with learning and dedicated to do something for their financial life. We also had fun doing some group exercises, which everybody loved and had a great message.

There were conversations about Financial Freedom , Passive Income and many other amazing topics – which all the participants liked a lot. Here are some more pictures

DSC01771

DSC01786

DSC01806

DSC01763

DSC01814

Bangalore and Pune Workshop

We still have few seats left for the workshop in Bangalore and Pune. For those who always wanted to attend this workshop should come over, because mostly this will happen only once in year. The workshop will have some very deep conversations about various topics like Financial Freedom, Passive Income, your mindset about your financial life and how you can focus on next 5-10 yrs in designing your financial life.

How you will save more Income Tax compared to last year due to Budget 2014 (Download Calculator)

Posted on by Jagoinvestor

Budget 2014 was a big event this year as the expectations from BJP govt was very high. Here are some of the income tax rules which were changed int his budget and impact a common man directly.

1. Income Tax Exemption Increased from 2 lacs to 2.5 lacs

The basic exemption limit was raised by Rs 50,000 in this budget and now the new limit is Rs 2.5 lacs . So there is no tax to be paid upto income of Rs 2.5 lacs. For senior citizens, the new limit will be Rs 3 lacs. So the new tax slabs looks something like this

new income tax slab 2014 2015

3% education cess is extra on income tax
2. 80C limit raised from 1 lacs to 1.5 lacs

This was a big relief for most of the people, as the old limit of Rs 1 lac in 80C was not enough for most of the people. There are too many things like EPF, PPF, Home Loan Principle amount, tuition fees, Life Insurance Premium, Tax Saving Mutual Funds and Tax saving FD and many more things, which gets 80C exemption.

Now with this exemption increase to 1.5 lacs, more motivation will be there for people to utilize this 80C limit. So if a person earns Rs 4 lacs, he/she can invest upto Rs 1.5 lacs in 80C, which lowers the taxable income to 2.5 lacs , which does not attract any income tax. So in best case, a person do not have to pay income tax upto Rs 4 lacs income with help of 80C investments done.

3. PPF limit raised from 1 lacs to 1.5 lacs

The limit for PPF investments was increase from 1 lacs to 1.5 lacs. This is going to be a great news for PPF fans and especially those who are investing in PPF in their children names, as the overall limit would increase for their family.

4. Home Loan Interest exemption raised from 1.5 lacs to 2 lacs

This was again a big relief for salaried class, as a lot of people who have taken home loan pay much more than 1.5 lacs of interest per year. With the increase of limit from 1.5 lacs to 2 lacs, the extra saving is of tax on Rs 50,000 , which turns out to be around Rs 15,000 for those who are in 30% tax slab. Note that this is only applicable for self occupied house taken on home loan.

5. Capital Gains Tax on Debt funds raised from 10% to 20%

The capital gains tax on debt funds has been raised from 10% to 20% and the minimum holding period to get benefit has been raised from 12 months to 36 months. So what happened was that earlier, people in 20%-30% tax slab rate used to invest in debt fund for 12 months and got it taxed at 10%, which was a great alternative to fixed deposits (where you pay 30% tax , if you are in higher tax slab) . But now this cant be done . Those who are interest to understand this part, please read this analysis on Deepak Shenoy Blog.

Then vs Now – An example calculation of a person earning Rs 10 lacs

Below I have given an example of a person who earns Rs 10 lacs, and takes full benefit under 80C , Home loan Interest and other basic exemptions like HRA, Medical Bills, Medical Insurance premium etc and compared his situation from past year rules vs the new rules which came in new budget. It has been seen that he can save approximmately Rs 30,000 additional tax. Have a look below

income tax calculation example

Download the Income Tax Calculator

I have created an excel calculator which you can use for calculating your new income tax and also compare with past year and see how much saving you will make with new rules.

Click Here to Download the Income Tax Calculator

Some Other Changes and Points from Budget

  • There is a proposal for introducing a single demat account for all the financial products
  • The EPFO will launch a unified EPF account, which will be a single account and there wont be headache to transfer or merge them every-time you change the job.
  • There will be uniform KYC across all financial institutions so that you don’t have to update your KYC at all the places

Please share how do you see this budget and the benefits ? Do you think its really going to help bring the “acche din” or not ? Please share your thoughts in comments section below.

What happens when Bank locker keys are lost?

Posted on by Jagoinvestor

Have you ever pondered the consequences of losing the bank locker keys? In this article, I will share what to do when you lose your locker keys? What are the rules and charges involved in setting things right again?

what happens if you lose your bank locker key? How much fine you will have to pay to get your new locker keys?

What happens when you go to open the Bank Locker?

When you open a Bank locker, you are billed in advance for breaking charges and 3 years of rent (the former is to cover emergencies when the locker might have to be broken). RBI guidelines state that banks can charge this extra fee if they wish, but some banks might charge it later, only if the situation arises.

You get 1 single locker key only

When you open a bank locker, there are a total 2 keys to the locker; out of these, one key is given to you and the other is with the bank. The absence of duplicate keys means that it is very important to keep your keys carefully and not lose them. However, it is very natural that some people lose their keys or misplace them.

What happens when your locker keys are Lost?

When you lose your locker keys, the first thing you need to do is write to the branch manager informing them about the loss. They can then ensure that the locker cannot be accessed by anyone (for example, by someone who stole your keys).

Once you intimate the bank about the lost keys, your locker has to be replaced by a new one (and keys) OR the duplicate keys have to be created and given to you. In either case, they will be contacting the company that supplied the locker to them (mostly Godrej).

A trained technician will travel to the bank office and cut open the locker in the presence of a bank official and the person who rented the locker. This is to avoid any dispute over the loss of items from the locker. If the person renting the locker is not available, the bank will go ahead and break the locker and move the locker contents to a sealed box, which can be passed to the customer later.

Do I need to pay high penalty If I lose my locker key? Here is a reason below

Bankers do provide a replacement of duplicate key of lockers in case the same is misplaced or lost. There is no duplicate key of a bank locker as such. The bank has to call the supplier of the locker (i.e. the company that has supplied the lockers to the banker) and the supplier provides the duplicate key.

This may entail a cost of about Rs.3000 per key. This heavy cost is due to travelling cost and other administrative costs that are involved.

Any expenses incurred will have to be borne by the person owning the locker – a sum that can run into the thousands. Just because it is  “loss of keys”, one should not treat it as a trivial matter and assume that duplicate keys will be provided for free.

Penalty charges may vary from the size of the locker?

Note that expenses can vary as per the size of the locker. For small lockers, the replacement charges will be less and will increase to large amounts for bigger lockers. I think the high expenses act as a deterrent to ensure that locker owners do not treat the safeguarding of their keys as a trivial matter.

For complete clarity, I have set out below excerpts from bank T&C’s regarding this issue.

From ICICI bank website

The Hirer(s) is/ are permitted to operate the locker with the key provided by the Bank and no operation of the locker shall be permitted with a key other than the key provided by the Bank at the time of executing the Agreement.

If the key of the locker, supplied by the Bank be lost by the hirer(s), the Branch should be noticed without delay. All charges for opening the locker, replacing the lost key and of changing the lock, shall be payable by the Hirer.

From SBI Bank website

In case of loss of key of the lockers, a service charge of Rs.509/- has to be recovered from hirer in addition to the actual expenditure incurred in breaking open the locker and changing of key by manufacturer of lockers.**

From City Union Bank website

In the case of locker keys reported lost by the hirer, a written declaration shall be obtained from him/her. The bank shall obtain from the manufacturing company a fresh set of lock and key. It shall be delivered by the company in a sealed box through its technical representative.

The technical representative shall open the box in the presence of the Branch Manager and the Hirer and then in their presence the locker shall be broken open.

The contents shall be removed safely and a new lock shall be fitted thereon. Then the NEW key shall be handed over to the hirer after collecting the charges for fitting the new lock and key.

Why do we need to keep the Bank locker keys Safe?

We may face 2 major consequences if we lose bank locker keys. They are as follows –

  1. If the keys get into the wrong hands, then you fear to lose your locker contents. After all, you must be well aware how lousy bank officials are in checking the authenticity of the person opening the locker – all they do, is fill an entry in their register and that’s the end of it.
  2. Another issue is you will have to pay hefty fines if the locker keys are lost. The amount of hassle and financial loss you need to absorb to rectify matters is huge compared to the size of mistake. It is therefore suggested to be careful from the onset.

Let me know your views on this article. Were you aware of these rules or not?

Design your financial life 2.0 Registration Opens  – Mumbai , Bangalore, Pune

Posted on by Jagoinvestor

Day before yesterday we released video of our Design your financial life 2.0 and we had influx of mails from all over asking for more details about the program. We are so touched by the excitement level that some of you hold in your heart. Below is the video which explains what this program is all about

Why we conduct Design your financial life Program?

We did our first Design your financial life 1.0 workshop in Pune. It took a lot of effort for us to design the overall design of the program as we were doing it for the first time. I wanted my wife to participate and so I asked her to participate in the program and Manish did the same at his end. I still remember the first reaction I got from my wife, she said, “What will I do in your boring personal finance program?”.

I told my wife I promise the program will be fun and I extended my heartfelt invitation to her. Finally my wife said yes to me. I told her be a good participant and asked her to really work on her financial life. On the other end, Manish was struggling to enroll his wife into the program and somehow he also managed to convince his wife. This was MOMENT of joy for us, we still feel it is the best thing we ever did.

Finally we got both of them into the program and they enjoyed each and every part of the event. They were happy to see how much our readers love us and how fun personal finance can be. I can never forget my wife taking notes during her participation and after we returned back she got a lot more committed with her money. Same was with Manish, his wife made a commitment to start her own venture and her vision is still alive and she is working on it.

We really want investor to dedicate some committed time for their financial life so that they can work on their financial life. We want individuals and couples to get on same page when it comes to money management, we really want to make personal finance interesting and fun and there are very few who give dedicated time to their financial life.

Why this transition from Design your financial life 1.0 to 2.0

We started with one day workshop but now after working with a few hundred investors we realized that the one day event needs something more to it. Our intention is not to get fee from investors, we want their full commitment and we want them to produce some amazing results in their financial life. To produce tangible results we are moving from 1.0 to 2.0. It is no more a workshop, it is now a 12 weeks program that will help all kind of investors in designing their financial life.

Some Special Criteria to join this program

(Put your hand on your heart and get honest with yourself)

  • If you find personal finance boring (like my wife)
  • If you convince others and yourself that personal finance is not your cup of tea
  • You hate numbers and are a big time avoider when it comes to money management
  • You are PhD when it comes to procrastination
  • You want to get into action but you don’t know from where to start
  • You are confused with what to do and what not to do because of the overall bombardment of information on you on the name of investor education
  • You really want to move beyond planning and want to learn how to design your financial life.
  • You want to make 2014 your BEST FINANCIAL YEAR

If you fit into above criteria we would love to have you in our new avatar of design your financial life program. The program is happening in 3 cities, which are

  • Mumbai
  • Bangalore
  • Pune

Invitation to Join Design your financial life 2.0

From the bottom of our heart we would love to invite you to be a part of this program. Your financial life is right now going in some direction; it will take some shape after 5, 10 or 15 years from now. Now, you can allow your reasons/circumstances to lead your financial life or you can design your financial future. This program is a wonderful structure for action takers. Looking at our schedule we will only be able to do such event once in a year and so make sure you don’t miss it. Also, it is always fun to get away from the computer screen and meeting offline at deeper level.

If you have any questions or queries feel free to either ask in comments section or mail us.