Basics of EPF

Basics of Employee Provident Fund: EPF, EPS, EDLIS More »

Savings Bank Account is the most common account for individuals

Saving Bank Account:Do you know how interest is calculated and more More »

Income Tax : Basics and How to

In this world, nothing can be said to be certain, except death and taxes –Benjamin Franklin More »

Ways to invest in Gold

Different ways to invest in gold and pros and cons of each of the way More »

Investing : Approaches, Plan, Psychology

Early investing is very much like growing a tree…if you can take good care of it at the start, it will take care of itself later More »

 

How to Calculate Capital gain on Sale of House?

What will be the tax implications for me or my  father/mother on selling of house? What is the tax liability on selling house? What is tax liability on selling house if my parents sell the house and  gift the sale proceeds to me? This article tries to answer such questions.

On Selling the House or Property

When you sell your house, you are liable to pay tax . Gains or Loss which arise from the sale of capital assets,such as Gold,  Debt Mutual Fund and Property etc are subject to tax under the Income-tax Act, under the head Capital gains.  The tax paid on this amount of capital gains is called Capital Gains Tax. Conversely, if you make a loss on sale of assets, you incur a Capital LossThis is explained in our article  Basics of Capital Gain 

Capital Gains for Real Estate or Property

For Real Estate the computation of capital gains are as follows:

  • If a property is sold within three years of buying it, it is treated as a short-term capital gain. This is added to the total income and taxed according to the slab rate.
  • If a property is sold after three years from the date of purchase, the profit is treated as a long-term capital gain and is taxed at 20% after indexation .
  • If you took property on home loan, claimed the tax deduction for the principal under Section 80C and  property is sold within five years, the tax benefits will be reversed.

While you can avail of various tax exemptions in case of long-term capital gains, no such benefit is provided for short-term ones.

Any money spent on improvement by the seller and the previous owner prior to 1 April 1981 will be ignored. For improvement expenses after 1 Apr 1981, the indexed cost as per the relevant financial year will be added to the cost of acquisition

Short Term Capital Gain = Sale Price - (Cost of Acquisition + Cost of Improvement + Cost of Transfer)
Long Term Capital Gain  = Sale Price - (Indexed Cost of Acquisition + Indexed Cost of Improvement + Cost of Transfer)
Indexed Cost            = Cost incurred * (CII of the year of transfer)/ (CII of the year of Acquisition or Improvement)

Capital gain on Sale of House and Income Tax Return (ITR)

Best and Worst Mutual Funds : Difference in returns

Does choice of mutual fund matters? What do you think would be the difference between funds with best returns and funds with worst returns? 5% 10% 20%? Is it same across categories  in returns i,e difference between large cap, large & mid cap,mid-cap same?  Well In the last one year difference between the best and worst Mutual Fund Matters is given below

Difference between best and worst returns of Mutual Fund

Difference between best and worst returns of Mutual Fund

The story is repeated across 5 year returns. From ET Wealth of Dec 8 2014, Leaders and Laggards based on 5 year returns are as follows. (Click on image to enlarge). our article Not All Mutual Funds Do Well -the Laggards talks how to find Mutual Funds that are not doing well.

Leaders and Laggards in  5 year returns

Leaders and Laggards in 5 year returns

Where can we get information about the best and worst funds?

Valueresearchonline provides  the information of average,best,worst returns across various time categories such as 1 week, 1 fortnight, 1 month, 3 months, 6 months,1 year, 2 years, 3 years, 5 years as shown in image below. The selected time frame is marked in red and other time frames in green. 

Credit card frauds and How you can avoid them

Credit cards issued by Reserve Bank of India Yes, that’s the latest trick fraudsters are using to dupe people. This article covers how people were duped in the name of RBI credit card. What are the various kinds credit card frauds? How India has stringent measures to avoid  frauds, What precautions you can take to avoid the fraud?

How were people duped :Modus operandi of RBI Credit Card Fraud

Person is sent a credit card which allows withdrawal of money up to a certain limit from a bank account (usually a small sum). Thus people are convinced that the credit card works. The fraudster then gets the victim to deposit a huge sum of money in the same bank account. Once victim deposits the money the card stops working. After that the holder of the card or victim does not hear from the fraudster.

Please note that the Reserve Bank as India’s central bank, does not carry out any business with an individual, not for bank accounts(saving, current) cards(credit card, debit card) , online banking services or giving funds in foreign exchange or any other form of banking services.  

In recent years, the Reserve Bank has been target of many such scams. Fake Reserve Bank website for online transactions (RBI warns about Fake Website in its Name) , Luring members of public to secure their bank accounts against such frauds by asking them to share the bank account details, including user id/password, through an email or by clicking on a link given in email. ( RBI cautions Public Not to respond to Phishing Mail sent in its Name ). Such fictitious offers are also made in the name of other public institutions, such as, International Monetary Fund (IMF), Income Tax authorities, Customs authorities or public figures like Governor, Dr. Raghuram Rajan or other senior RBI officials. Others common scams are winning a lottery without participating in, transferring inheritance money for some transfer charges (Nigerian scam), job offer etc. Our article Phishing emails Online Scams talks about such scams in detail.

Falling prey to such offers can result in compromising one’s own crucial personal information that may be misused to cause direct financial and other loss. People  in their own interest, should refrain from responding to such offers in any manner. Rather, they should immediately lodge a complaint with Cyber Crime branch of the Police

What the incidence level of card frauds in India is and whether it is alarming?

Are Brown Bread, Diet Soda Healthy, Worth the money?

Is brown bread or brown rice is a healthier choice?  In a bid to stay healthy we turn to supermarket shelves lined with the latest health foods. Hence there is an increasing and ever-growing demand for healthier (and more expensive) options like whole-wheat, multi grain,ragi oatmeal versions of bread,be it as sandwiches,or maggi or idli. For our generation the healthy breads are an acquired taste but better late than never.  However, how many of us really understand these health products? Do we read the labels and ingredients on them and if you do, how much of it do you really understand? Regular white bread,is high in gluten and starch,whole-wheat and multi-grain versions are higher in fibre and other nutrients like vitamins and minerals. Given all of this, it would make sense to switch to brown bread or multigrain right ? What about diet soda or zero calorie drink. Let’s find out.

Brown Bread vs White Bread

Bread is a naturally low-fat food, rich in complex carbohydrates.  Milling wheat into white flour removes the outer bran coat and wheatgerm, losing most of the goodness(minerals and vitamins) in the process. Thus eating the unrefined wheat or rice or sugar is healthier as it retains the minerals and vitamins that are present in the outer bran or husk. While whole-wheat is made out of atta,multi-grain bread is a mix of five or seven types of grains,including jowar,barley,nachni,oat etc. Similarly,oat bread is made out of oatmeal.Of course,there has to be a percentage of maida in these breads as well to hold the structure togetherThe food expert uses a GI scale called the Glycemic index (GI value) to measure the quickness in which a particular food, once eaten, turns into glucose in the blood. The higher the GI value, the more harm to your body’s metabolism; leading to obesity and all manner of ageing-related diseases. The GI value of brown bread is less than the GI value of white bread.

 So Is Brown Bread Good. Unfortunately not.

LPG Subsidy and Direct Benefit Transfer Scheme

LPG cylinders will not be available from dealers at subsidised rates in 2015. Holding an Aadhaar card is no more the necessary criterion for receiving subsidy on cooking gas in bank accounts. This article talks about latest Direct Benefit transfer of LPG that was relaunched in 54 districts on 15 Nov 2014 and will be relaunched nationally on 1 Jan 2015. It explains how subsidy will work,how to get enrolled for LPG subsidy if you have Aadhar Card or if you don’t have Aadhar Card.

About the Direct Benefit Transfer of LPG or DBTL Scheme

The DBTL scheme was earlier launched on 1st June 2013 and finally covered 291 districts. It required the consumer to mandatory have an Aadhaar number for availing LPG Subsidy. The new government reviewed the scheme and after examining the difficulties faced by the consumer substantively modified the scheme . The modified scheme was  re-launched in 54 districts on 15.11.2014 in the 1st Phase and in the rest of the country on 1.1.2015.

Under the modified scheme, the LPG consumer can now receive subsidy in his bank account by two methods. Such a consumer will be called CTC (Cash Transfer Compliant) once he joins the scheme and is ready to receive subsidy in the bank account.  These 54  districts are in states of Andhra Pradesh, Daman & Diu,Goa,Himachal Pradesh,Karnataka,Kerala,Madhya Pradesh,Maharashtra,Puducherry,Punjab,Telangana.Districts covered in 1st can be found here .Overview of the Direct Benefit Transfer of LPG scheme is given below. More details can be found at petroleum.nic.in/dbt/index.php

  • Consumers will need a bank account to join the scheme and receive LPG subsidy
  • Consumers will also get one time permanent advance in their bank account prior to buying the first market priced LPG cylinder
  • Consumers will receive subsidy in their bank account as per their entitlement of subsidized cylinders
  • For the 54 districts where the scheme was launched on 15 Nov 2014
    • Till consumers join the scheme they will get cylinders at Subsidized price for 3 months w.e.f 15.11.2014 till 14.02.2015.
    • Market price for next 3 months, but the subsidy due will be given to them if they join the scheme within these 3 months i,e till 14.05.2015
  • From  15.05.2015 all LPG consumers will get cylinders at market price and only those who join the scheme will receive one time permanent advance & subsidy from the date of joining
  • To join the scheme and receive subsidy Aadhaar is not required. Consumers can avail LPG subsidy even if they don’t have Aadhar.

Form can be downloaded from  www.myLPG.in and are also available with the distributor

If you had joined the previous DBTL scheme and had got the advance/subsidy in your Bank Account then  You don’t have to do anything again

To check you status you can go to MyLPG.in and choose your company Bharat Gas,Indane or HP and click on Check DPTL (CTC) status as shown in image below

MyLPG.in options

MyLPG.in options

LPG Subsidy for those with Aadhar

If you have Aadhar but have not joined DBTL scheme you need to enroll. For enrolling under this scheme, consumers who have Aadhaar numbers will have to

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