KNOW-HOW

Now your Savings account will earn daily

2010-04-20T19:19:00.000+05:30

From April 1st 2010, the interest on Savings account will be calculated on daily basis. For Savings account, there is 3.5% interest paid by the bank to the account holder. Previously the interest is calculated on minimum balance available in the account from 10th to end of every month.

But now the interest is calculated on daily basis. i.e. the interest will be calculated on balance available in the savings account daily.

This is explained by a simple example below.

In the above example, if the interest is calculated in old method, you will get Rs. 13.35 as interest.

If the interest is calculated in new method(daily basis) you will get Rs. 17.31 as interest.

This is how your savings account will earn daily.

Lech Aleksander Kaczyński 18 June 1949 – 10 April 2010

2010-04-11T11:13:00.000+05:30

Lech Kaczyński was the President of Poland from 2005 -2010. He, His wife and many others were also died in a flight accident in Russia on 10^th April 2010. The people of Poland are in great mourning, due to the death of their President.

President Obama said "Today's loss is devastating to Poland, to the United States, and to the world."

To read more Please visit - http://en.wikipedia.org/wiki/Lech_Kaczy%C5%84ski

Know about TB-Tuberculosis

2010-04-07T15:32:00.000+05:30

After a very long time I am writing this blog. This article is about the deadly disease TB-Tuberculosis.

Yes, TB is one of the deadly diseases in the World. TB- Tuberculosis is caused by bacteria Mycobacterium tuberculosis. This bacterium usually attacks the Lungs, and also other parts of the body.

When people have TB in their lungs it is called pulmonary tuberculosis. It is transmitted when an infectious person coughs, laughs, sneezes, sings or even talks, as the germs that cause TB may be spread from their lungs into the air. If another person nearby breathes in the germs, there is a chance that they shall be infected.

Below are the symptoms for TB. All symptoms might not occur at the same time.

1) Cough – more than 3 weeks

2) Blood sputum while coughing

3) Loss of appetite

4) Sudden weight loss

5) Sweating during night

6) Fever in evening

7) Vomiting

8) Tiredness

If you have any of the below symptoms please contact your doctor and get it tested for TB.

Below are the tests conducted to figure out the presence of TB bacteria.

1) Skin Test

2) X-Ray

3) Blood Test

4) CT Scan

5) Sputum Test

6) Broncoscopy

The Sputum test confirms the presence of TB bacteria. If it is not conclusive in Sputum Test, Broncoscopy test is carried out, which will confirm the result.

Since the TB bacteria are strong, the infected person has to take medicines for long period (6-9 Months). During this period the infected person should not stop the medicine until unless you have been asked by your doctor. For the first two months the medicines will be more, after this period the doctor will reduce the tablets after analysing patient’s health.

The death rate in India due to TB is alarming. The death happens for those who are not having knowledge about the disease and not taking proper medicine. Many people take different medicines as they are not aware of the TB. In India one person dies for every 3 Minute due to TB. If TB is diagnosed it can be cured by taking proper medicines. As the medicines are strong, it will have its own side effects. But when considering the cruelty of TB, the side effects are less.

March 24^th is World TB day.

After reading this article please spread awareness about this disease. If any of you dear ones have these symptoms, kindly advice them to see the doctor and get tested.

PAN Card

2007-02-17T23:45:00.000+05:30

I have seen many people who are in need of PAN card, but they do not know how to contact and how to get the card. This article is exclusively for those friends to understand what is PAN card and how to get it.
What is PAN card?
The permanent account number or PAN has grown in importance and is today a vital part of any financial transaction. The tax department allots the PAN to an individual for the purpose of identification and to relate to various transactions and information pertaining to him.
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by an Assessing Officer of the Income Tax Department.
A typical PAN is AIZPS1205E.
Did you have PAN card?
You shoud get a PAN card if you fall in any of the points below.
1) All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others.
2 ) Any person, who intends to enter into financial transaction where quoting PAN is mandatory.
3) The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

Necessity of PAN:
1) It is mandatory to quote PAN on return of income, all correspondence with any income tax authority.
2) It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection.
3) PAN has to be mentioned for making a time deposit exceeding Rs. 50,000 with a bank or post office or depositing cash of Rs 50,000 in a bank.
4) All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.
Getting a new PAN card:
Application for PAN should be made in prescribed form (Form 49A) and submitted in any of the I-T PAN Service Centres set up and managed by UTIISL across the country.
It is better to approach any of the IT PAN Service centers to obtain a PAN card. You can get the list of service centers in your city from the url - http://www.utitsl.co.in/pan/search.php and http://incometaxindia.gov.in/pan/itcentres.asp
You should have following docs to apply for PAN.
- Passport size photo (3.5cm x 2.5cm)
- Address Proof
- ID Proof

UTIISL and NSDL are authorised to provide tamper proof PAN card at a cost of Rs. 60 + service tax.You can apply for PAN card through online.
You can apply for PAN card through online also.The URLs for applying for the PAN card are
https://tin.tin.nsdl.com/pan/index.html
http://www.utitsl.co.in/pan/

Thanks
http://www.rediff.com/money/2003/jul/11pan.htm
http://incometaxindia.gov.in/PAN/Overview.asp

Rupee Cost Averaging

2007-01-09T12:15:00.000+05:30

There are lots of investors, who invest a large amount of money and they forget about it. Actually they do not want to worry daily about the returns, since their investments are for long term. This is not a bad idea at all. If you are not taking higher risks, you will not take higher returns, back home.

Actually the above case can be dealt in different way. A sum of amount can be invested in a particular instrument (Mutual Funds, Shares etc...) at regular intervals. This technique is called Rupee Cost Averaging (RCA).

Easy Entry and Easy Exit:
Many investors, including me, make a mistake in judging the Exit and Entry into the markets. According to my knowledge, you should Enter the market (Buy) at lower levels and Exit the market (Sell) at higher levels. We often make mistake in this. By using Rupee Cost Averaging we can overcome this error. Since we are buying at regular intervals, one need not to worry about the entry and exit.

For example:- If you buy units of Mutual Fund by Rupee Cost Averaging method, you will get more units when the price is low, and vise versa.

One must remember that the unit price does not count here. The Average price at the end of the investment only accounts and the return is also based on the average price. If there is volatility in the market, this method will be more helpful.

Compound interest – Magical word

2006-12-20T15:57:00.000+05:30

Compounding is a magical word in world of investment. It will offer you a great return for a small amount of money invested. If you invest your money, you will get some returns. Then re-invest that money, that money will fetch you some returns. Gradually your invested money grows exponentially, giving you higher returns. In Simple interest, your will get only return for the principle amount, but in Compound interest the return is calculated including the reinvested return amount.

Example:

Consider what the power of compounding does to an investment of Rs 12,000 a year (that is, an affordable Rs 1,000 a month) in a scheme that offers 9 % return, over 30 years. The total investment of Rs 3.6 lakh (principal) grows to Rs 17.83 lakh over that period.

Start investing earlier:

If you begin investing earlier, you can get greater returns. For instance, if you begin an investment plan at age 30 and invest Rs 10,000 a year for just 10 years at 9 per cent a year, and roll over the proceeds until you’re 60, you’ll get Rs 9.28 lakh on a total investment of Rs 1 lakh. On the other hand, if you begin saving at age 40 and invests Rs 10,000 a year for 20 years at 9 per cent a year will only get Rs 5.58 lakh–on a total investment of Rs 2 lakh. That is, by allowing your money to compound longer, you can be richer than your colleague by Rs 3.70 lakh, although you saved only half as much as he did.

Rule of 72:
A simple way to figure out the impact of compounding is illustrated by the Rule of 72, which lets you calculate how long your money will take to double. Divide 72 by the rate of return you expect on your investment; the result you get is the number of years until your investment doubles. For instance, if you expect to get an average 9 per cent returns, your money will double in 72/9 = 8 years.

Belore figure represents the exponential nature of Compounding...

Thanks:
http://www.outlookmoney.com/scripts/IIH021C1.asp?sectionid=10&categoryid=3&articleid=3743

Infrastructure Bonds

2006-12-20T15:48:00.000+05:30

The Infrastructure bonds is one of the Tax-saving element under Section 80c of the Income Tax Act, 1961, up to an investment of Rs.1, 00,000, subject to the bonds being held for a minimum period of three years from the date of allotment.

The return from the Infrastructure Bond is taxable. The rate of interest is about 5.50% and it is constant throughout the lock in period.

This is a good investment options for people who can compromise on returns and looking for less lock in period.

Public Provident Fund (PPF)

2006-12-05T18:06:00.000+05:30

Public Provident Fund, popularly known as PPF is one of the Savings cum Tax Savings instrument. It also serves as the retirement planning tool for many those who do not have ant structured Pension Plan covering them.

Account Opening? PPF account can be opened in most of the Post Offices throughout the country and in Public Sector Branches. The account can be opened by an individual in his own name, on behalf of a minor of whom he is guardian, or by a Hindu Undivided Family.
The account opening form can be downloaded from this page
www.indiapost.gov.in/pdfForms/PPFActOpening.pdf

Amount? Minimum of Rs. 500 and maximum of Rs. 70, 000 can be deposited for PPF. You can deposit your amount not more than 12 installments in a financial year.

Maturity? The maturity period for PPF is about 15 years. Premature withdrawal is permissible every year after completion of 5 years from the end of the year of opening the account.

Returns? Sure there are returns for PPF and the interest amount is not taxable. The rate of interest is about 8% per annum compounded annually.

Merits:
· Risk free investment with assured return.
· Flexibility in investments (Rs.500 to Rs.70, 000).
· Income from PPF is fully exempt from income tax.

De-Merits:
· Less attractive for older people, since the tenure of PPF is about 15 years.
· Although partial withdrawal is allowed, it is limited to 50% of the amount in the account.

You can go through the following link for further reading
http://www.iloveindia.com/finance/post-office/public-provident-fund.html
http://www.outlookmoney.com/scripts/TAX003C1.asp?type=Rebates&lst_rebates=Public%20Provident%20Fund

National Savings Certificate (NSC)

2006-12-04T16:45:00.000+05:30

National Savings Certificate (NSC) is the certificates issued by Department of Post, Government of India and are available in all Post offices across India. It is one of long term savings scheme for the investor in which he can get Tax exemption under Section 80C of Income Tax Act. Interest accrued on the certificates every year is liable to income tax.

National Savings Certificate can be purchased by the following:
• An adult in his own name or on behalf of a minor,
• A minor,
• A trust
• Two adults jointly,
• Hindu Undivided Family

National Savings Certificates are available in the denominations of Rs. 100, Rs 500, Rs. 1000, Rs. 5000, & Rs. 10,000. There is no maximum limit on the purchase of the certificates.

Period of maturity of this scheme is 6 years. If a person invests Rs. 100, after 6 years he will get an amount of Rs. 160.1. This scheme has a high interest rate of 8% compounded half yearly.

Premature encashment of certificate (any time before 6 years) is allowed under specific circumstances only, such as death of the holder(s), forfeiture by the pledgee or under court's order. No interest is payable on encashment within one year.

How to apply?
An investor can purchase NSC by applying to the Post office through representatives or agents (like icicidirect). Payments can be made through Cash, DD or Cheque. If the certificate is lost or stolen or destroyed, a duplicate is issued by the post office on payment of prescribed fees.

The form for buying NSC is available in the following link
http://www.indiapost.gov.in/pdfForms/NC-71ApplnforPurchaseofNSC.pdf

Thanks
http://www.webindia123.com/finance/post/nsc.htm
http://www.iloveindia.com/finance/post-office/national-savings-certificate.html

Investing in Mutual Fund!!! Step by Step...

2006-12-01T12:18:00.000+05:30

Once you are comfortable with the Mutual Funds, next step is to understand the Investment Choices and draft an Investment Plan. Below steps will guide you in drafting a plan in Mutual Funds investment.

Step 1: - Identify Your Investment Needs:
For everybody their financial goal will vary. It is based on their age, lifestyle, financial independence, family commitments, level of income, expenses and many others. So, first step is to assess your financial need. You can define your Financial Objective and needs which could be buying a home, regular income, wedding, buying a land, children education or a combination of all these needs. You must consider your amount of risk you take in objective.

Step 2: - Selecting a Right Scheme category and Fund:
The next step is to select the right scheme which matched your investment objective. Before selecting the scheme you have to select the category in which you are going to invest. Like long term, short term, etc. There are broadly four categories in choosing the Mutual Funds.

Once you are clear in which category you are going to invest, then its time for selecting the right Mutual Fund. The offer document of the scheme tells you its objectives and provides supplementary details like the track record of other schemes managed by the same Fund Manager. Some important factors that should be considered while selecting the MFs are,
· Track record of the Fund in past few years in relation with other similar Funds in same category.
· How well the MF is providing efficient, prompt and personalized service?.
· Degree of transparency and quality of their communications.

Investing in one Mutual Fund scheme will not satisfy your Investment Objectives. You have to choose ideal mix of schemes to achieve your needs.

Step 3: - Invest Regularly:
The best approach to invest a fixed amount in regular intervals, say every month. By investing regularly you have the flexibility in choosing the number of units, since the price of each unit is not same each month. If it goes down, you can buy more units that month, thus bringing the average cost per unit. This is called rupee cost averaging and this is an investment strategy followed by all investor in the world. You can avail SIP (Systematic Investment Plan) offered by many Fund houses.

Step 4: - Start to Invest Early:
It is advisable to start investing as early as possible, as you are provided with regular income such as salary. If you start now, you can make more instead if you invest later. The power of compounding lets you earn income on income and your money multiplies at a compounded rate of return.

Step 5: - Final Step:
Then what are you waiting for. Invest in Mutual Funds and reap the rewards in coming years. Mutual Funds are suitable for every kind of investor - whether starting a career or retiring, conservative or risk taking, growth oriented or income seeking.

Courtesy:
http://www.bajajcapital.com/investments/mutual-funds/mutual-funds.php#cho
http://www.indiacapital.com/mfunds_m.htm

Mutual Funds... In a Nutshell

2006-11-29T16:55:00.000+05:30

Mutual Funds!!! We are seeing Ads on TV about Mutual Funds! Are you really eager to know what they are? The concept behind MF is very simple and it is also a better investment option too.

Consider you have 1 Lakh rupees. You want to invest that amount in Shares and want to earn some profit out of it. But you are working in an Organization, 6 Days a week. You do not have time to watch the market, rising and falling of shares, collecting details of the companies, etc., to invest in Shares. So you decide to hire a person, who is an expertise in investment and give him your money. You have to pay him some percentage of the invested amount as the charge. That person will divide your money into units. Suppose you invest 1 lakh, he may divide the amount into 1,000 Units of Rs. 100 each. He will invest that amount in securities (Shares). He will sell the shares if it prices goes up and the money is given to you after he takes his charge. If he holds the securities when the price goes up, your Unit value is increased. You can also sell your Funds, if the Unit price goes up.

- The person/company you approach and give your money to invest is called Asset Management Company (AMC). The company gets money from many people.

- The current price of the Unit is called Net Asset Value (NAV). Its like a share price. - The amount you pay to the Person/Company who takes care of your money is called Load. This is about 2% of the invested amount. It is collected while buying the funds (Entry Load) or while selling the Funds (Exit Load).

- You can invest money in MFs monthly, like recurring deposit. But the Funds will have different price, since the time of buying is different. This is called Systematic Investment Plan (SIP) .

There are lots of advantages investing MFs. Low risk, Liquidity, Professional Expertise, Diversification, etc. For further reading you can go through following links http://www.mouthshut.com/review/General_Advice_on_Mutual_Funds-102769-1.html http://www.investopedia.com/university/mutualfunds/

Reduce your Income Tax

2006-11-24T15:35:00.000+05:30

Most of us are highly paid professionals drawing an annual salary above 1 lakh. If your annual salary is more than 1 lakh, you are liable to pay Income Tax. The income tax pattern varies according to you pay.

There is no Income Tax:-
· Income up to Rs. 1, 00,000.
· Income up to Rs. 1, 35,000 for women
· Income up to Rs. 1, 85,000 for Senior citizen

We can divide one’s earnings into three categories for calculating the tax to be paid.

Category 1:- If your income is Rs. 1, 00,001 to Rs. 1, 50,000, you have to pay 10% of the amount exceeding 1 lakh.

Category 2:- If your income is Rs. 1, 50,001 to Rs. 2, 50,000, you have to pay Rs. 5000 + 20% of the amount exceeding 1.5 lakh.

Category 3:- If your income is Rs. 2, 50, 000 and above, you have to pay Rs. 10000 + 30% of amount exceeding 2.5 lakh.

The above percentage is some what proportional to the income. It is may be revised every year.

What Law says?
According to the Income Tax Laws you can save up to Rs. 10,000 of Income Tax, i.e. You can invest about Rs 1, 00,000 lakh of your earnings.

For example:
The annual income of a person is Rs 2, 10,000. He falls in Category 2. He need to pay Rs 5000 + (20% of 60, 000) = Rs 17, 000. If that person invests about 1 lakh in Tax saving schemes, he has to pay only tax for Rs 10,000, i.e. Only Rs. 1,000.

What are Tax Saving Schemes?
In order to save your money for your future and to reduce your Income Tax, there are many schemes available. They are so called Tax Saving Schemes. Below are the few of the Tax Saving Schemes.

1) Mutual Funds
2) Small Saving Schemes
3) Infrastructure Bonds
4) Life Insurance Schemes
5) Medical Insurance Schemes
6) Pension Plans

Each scheme has different % of return. If you take higher risk, you can get higher returns.

It is very important to invest some portion of your income for your better future. In future you will get back your money (will be huge amount) and also interest.

Stay invested. Reduce your Income Tax.
Stay tuned to this link, more to come.

Opening a Demat Account isn't hard...

2006-11-22T18:42:00.000+05:30

Are you planning to buy shares? If yes, you should open a Demat account. Before knowing how to open a Demat account, you have to know some fundas. Here are some...

Depository: - Depository is an organization where the shares are held in an electronic form. It also provides services related to transactions in securities. There are only two Depositories in India registered with SEBI. They are
1) National Securities Depository Ltd (NSDL)
2) Central Depository Services Ltd (CDSL)

It’s like a bank head office, where details of all accounts are held.

Depository Participants (DP): - DP is an agent of the Depository through which it interfaces with the investor. A DP can offer services to its investors, only after getting proper registration from SEBI. DP is like bank branch offices, when we can avail banking services. There are above 500 DPs, registered with SEBI.

Securities and Exchange Board of India: - SEBI protects the interests of investors in securities and promotes the development of the securities market through appropriate regulation.

What is Demat Account?
The investors can hold securities in physical form or in electronic form. A Demat account helps an investor to hold the securities in electronic form. Nowadays the shares are not traded in physical form. As per statistics about 99.9% of trading in NSE and BSE are done through electronic form. So it is really necessary to open a Demat account to start buy/sell your shares. There are lot of advantages in having a Demat account and trading in electronic form.

How to open a Demat Account?
Opening a Demat account is easy. You should have following things to open the account.
· Proof of identity
· Proof of address
· PAN card (Mandatory)
· Bank account in a Nationalized Bank (With internet banking is an added advantage)

If you have all of the above, you can approach a DP. List of DPs are available in NSDL < http://www.nsdl.co.in/ > and CDSL < http://www.cdslindia.com/ > websites.

Are there any charges for account opening?
Of course, Yes. There are Account Opening charges, Annual Maintenance charges, Transaction charges. These charges vary between different DPs. You can select an appropriate DP, according to your requirement.
A comparative chart of fees charged by the DPs is available at https://nsdl.co.in/about/dps.php

After selecting a DP, approach an agent or a broker from a DP. He will let you all the things. Please read the application forms carefully before signing the documents. Then he will assist or he will fill the application form for you (since you are going to be his customer).

Once the Demat account is opened you can start trading using that. There is no need to maintain minimum balance of shares as like in banks. You can start trading with 0 shares.

For more details you can browse though…
http://www.sebi.gov.in/faq/faqdemat.html
http://in.rediff.com/getahead/2005/jan/31demat.htm

I got the reward!!!

2006-11-21T16:00:00.000+05:30

If you have luck (knowledge too) you can also book profit in shares.

I book by first profit in shares today. This was my first trade, in which I got profit. This doesn’t happen to all. I was too optimistic in buying TCS shares. While buying, I thought, I will keep this share for long time. But now the market is very volatile. In this week the TCS share prices was going up and up. Even when the Sensex is in red, the TCS was in green.

I bought 5 TCS shares @ 1079. I was expecting about 1500 in 5 months. But due to market fluctuations, I feared and sold that share today @ 1149. Today high was about 1151. Any how I was able to book a profit around 300. This is small money, but it’s very big for me.

Unforgettable Quote:
Only hard earned money will last for time… (Is this hard earned? No).

What Stocks are really....

2006-11-17T18:48:00.000+05:30

Shares represent ownership of a company. When an individual buys shares in your company they become one of the owners of the company. Shareholders choose who runs a company and are involved in making key decisions such as whether a business should be sold.

Types of stocks

· Common Stocks – Ordinary Stocks, with high risk, have rights in Corporate decision matters.

· Preferred stock – Owners have priority over Dividends and Assets. Secured when compared to Common Stocks.Will be coming up with more info regarding shares…

When we think about the investment, we really think about return. Investing in shares will give you lot of return, even 100, 200, 300 % returns. Its looks almost crazy, but there are lot of risks involve in that. There is also negative size in investing in shares. you may end up with nothing , even with debts if investments goes wrong. With little bit of risk and knowledge you can make lot money in short term and long term.