7 Tips to Save Money on Mobile Recharge

Mobile Recharge

When i bought my 1st mobile, Incoming calls were chargeable. Mobile Recharge was sponsored by my father :). Share of telecom spend in monthly household expenditure was controlled/limited. Internet access was mainly through cyber cafes. The best friend of any household was good old landline phone. Gradually, after getting habitual to use of mobile phone the spend on mobile recharge slowly became price inelastic in relative terms. In short, there is no impact on demand (read: usage of mobile phone) with change in cost / higher mobile recharge value. Today i was reading a news article that mobile tariff is all set to increase. In fact, pulse rate has already increased from 1p per sec to 1.5p per sec in last year or so. Due to the granularity, it looks insignificant increase in mobile tariff. On other hand, If you look from personal finance perspective, it's a significant increase. Assuming, middle class family of 4 with two college going kids. With an Average monthly mobile recharge of Rs … [Read more...]

How to find out Right Home Loan Amount?

Home Loan Amount

What is Right Home Loan Amount?. There is no right or wrong answer to this question. Both under borrowing and over borrowing are dangerous for financial health of an individual. We cannot ignore this question because it directly impacts your interest outflow. Three important pillars of Home Loan are Monthly EMI, Home Loan Tenure and Home Loan Amount. All 3 are interlinked to each other. I have not included Interest Rate as Interest Rate is not in control of a Borrower and is fixed. EMI, Tenure and Home Loan Amount are variable and optimum mix can be calculated. To influence any of these, borrower can increase / decrease own contribution. It is critical to maintain a right balance between all 3 for near perfect financial planning. Classic dilemma is to increase tenure and it will increase Home Loan amount. At the same time, it will also increase your interest outflow, in the long run. Increase in Interest Outflow will increase the overall cost of property which will eat into your … [Read more...]

7 Risks Associated with Subvention Scheme

Subvention Scheme

Last week, 3 Big Hoardings caught my attention "NO EMI For 24 Months", "Book Your Dream Home at Just 8% Interest Rate" and "Book Now Pay Later". It seems to be some divine intervention which is helping / supporting me to fulfill my dream of owning a flat. "HOLD ON" signals my mind to my heart. Remember the Golden Rule of Finance "There are No Free Lunches in this World". This divine intervention is named as "Subvention Scheme". Word Subvention is derived from Latin word "Subventus". It means Monetary Help or Support. Subvention Schemes were banned by RBI on 3rd September, 2013. These schemes were re-launched with slight tweaking of payment being linked to Construction Linked Plan but basic nature was retained. You must have observed that Housing Finance Companies are taking lead to promote such schemes as they are not governed by RBI. In few cases, bulk payment is released upfront to the builder by HFC's so that builder promote Home Loan of that particular HFC. Normally a buyer gets … [Read more...]

TDS Filing – 7 Common Mistakes

TDS Filing

TDS Filing in India is considered to be very tedious task. Trust me it is not. With the introduction of section 194IA w.e.f 1st June, 2013, now it is mandatory to deduct and deposit TDS for any property transaction over Rs 50 lakh. I shared the process of TDS filing in my post How to deduct TDS on Property Sale u/s 194IA.  It is also mandatory to deduct TDS u/s 195, in case of NRI Seller. You may check my post, How to deduct TDS on NRI u/s 195? for more details. With reference to my these posts on TDS filing, i receive lot of queries on error / mistake in TDS filing. Main reason is people are not getting proper information from banks, builders, agents, lawyers, CA's etc. As a result almost 70% people end up wrong TDS filing. In this post, we will discuss 7 common mistakes which can be avoided while TDS filing. Error Free TDS Filing 1. TDS Filing in Advance: This is most common misconception and confusion among the property buyers. Banks and Sub-Registrar offices are responsible for … [Read more...]

Rent Agreement – 11 Must Have Clauses

Rent Agreement

Rent Agreement is also known as Rental Agreement or Leave and Licence Agreement. Due to high property prices & floating population there is always a huge demand for property on rent. In my previous post on Real Estate, i highlighted 10 Benefits of Staying on Rent. To enjoy these benefits, you have to take a house on rent :). Rent Agreement is signed between Owner and the Tenant. Rent Agreement can signed on a regular stamp paper of Rs 100 / Rs 200. In some places like Mumbai, most of the Rent Agreements are registered in sub-registrar office. Cost of registration is equally borne by the owner and the tenant. Format of Rent Agreement is normally standard and brokers are Single Point of Contact for same. I observed that tenants don't give too much importance to Rent Agreement clauses. As a thumb rule, you must check clauses of agreement you are signing even if it is short term agreement or not of much relevance. To avoid any future dispute it is important to include following 11 … [Read more...]

How to read CIBIL Score and Risk Index?

Risk Index

How to read CIBIL Score and Risk Index is one of the most common query from my readers. In layman terms CIBIL Score is nothing but risk assessment / credit worthiness of a potential borrower based on past credit history. Though CIBIL Score and Risk Index is the 1st level shortlisting criterion by the Mortgage Lender. Executives of financial institutions who have access to this data are not competent enough to explain the CIBIL Score / risk index to borrowers. It create panic situation among borrowers. Recently one of my client called me and told that his consumer loan is rejected because his CIBIL Score is very low. I checked with him, what is his CIBIL Score. He told me that his CIBIL Score is 2. Unfortunately 2 is not a CIBIL Score but Risk Index. Worst part is that executive of financial institution referred him to some shady online agency, Which charged Rs 10,000 to Improve CIBIL Score. I explained him that currently his credit history is less than 6 months therefore Risk Index is … [Read more...]

10 Perquisites That Can Help In Tax Savings

tax saving

In my previous post on Tax Savings, we discussed How Allowances can help in Tax Savings. In this post, we will discuss Perquisites and Tax Savings. Perquisite is non-cash benefit given to employee by the employer in addition to salary. This benefit is normally attached to employee's designation. Some perquisites are across the board, example food coupons. An intelligent mix of allowances and perquisites in the CTC (Cost to Company) can help in effective tax savings of upto 25%. In my opinion, these 2 components are low lying fruits which leave more money in the hands of a salaried employee for financial planning. As perquisite is non-cash benefit therefore tax savings should not be the only consideration while opting for any perquisite. There should be practical utility of that component for employee else employee will not benefit. Please remember that under CTC concept, perquisite value is part of CTC and is reduced from the total CTC. It should be not be misunderstood as additional … [Read more...]

11 Least Known Allowances to Save Tax


As per Wikipedia, An Allowance is an amount of money allotted or given usually at regular intervals for a specific purpose. Allowance is given in addition to salary to meet specific requirements of salaried employee. In India, Income Tax Planning is very myopic. It is only restricted to investment, investment and investment. As i highlighted in my post, 7 Financial Mistakes You should Avoid that "FREE ADVICE" is responsible for this myopic approach towards tax planning. A tax planner should look beyond "Investments". He should provide 360 degree guide to tax payer on how to SAVE TAX. Allowances and Perquisites are 2 such tax saving buckets / instruments. An Allowance and Reimbursement can be used interchangeable. An allowance paid against actual bills is referred as Reimbursement which is fully exempted from income tax. In this post, we will cover 11 least known allowances which can help you to save tax. In next post, i will discuss perquisites. To emphasis on the importance of … [Read more...]