Muktha Balaga

Financial Guru

Contributors :

Financial GURUMohan is one of our active participants in our discussions, no matter what is the subject. I find it difficult to assign him an area to call ‘Subject Matter expert’..

We are glad to have a FINANCIAL GURU to enlighten us with his ideas…


151 Responses to "Financial Guru"

Thanks veena.
Hope to live up to the “reputation”. 🙂

There is a saying that “DEATH and TAXES are the only certain things in life”.

Income tax as we all know is the sweet devil which eats approximately 0% to 33.33% off from our hard earned money.

The zero percent is the poor netas of this country all others have to pay through our nose to upkeep the netas!!

All of us are under the illusion that income tax is exempted upto 60,000 INR for male and 75,000 INR for woman. Think again is it true?

Before we can say Palaniappan Chidambaram, i could recollect how this intelligent ( offcourse he is from south india) man has made a mockery of income tax – personal tax.

Allright lets consider a honest person who earns income of only 60,000 INR and is entitled to freely spend/invest accordingly.

Enter the “service tax” and this fellow is taxed too.

Initially your income is taxed at source at what ever slab you may be ( after 1 lakh standard investments). With a sigh we take home that salary as HR would love to say.

After this why is there a service tax by the honurable finance minister? When we use a BSNL telephone there is a service charge of 10.2%. This is taxing already taxed money!

P.C was under lots of pressure last year to increase the tax limits. He did not do that. He did the opposite of increasing the tax without anybodys knowledge!!!

What recourse do we have? PC is planning to introduce more and more industries into this double,triple taxation demaon called service tax.

Just watch and wait for his sermon this budget. Heard that doctors, builders are in his preview too.

On hind sight, what ever “service” we actually get from these service providers is actually a misnomer – to add salt+khara to this wound is PC’s service tax.

Long live PC

Wonderful Food for thought,

I know when I see my Airtel bill, BSNL bill I see these service taxes!
We pay the income tax(prof tax?) for the money which we use to pay our utility bills.. so what are we left with ?
Educational cess andrenu Mohan ?


I hear that PC’s goal is to slowly bring up service tax 10 16%… that true? What is the funda behind this slow poisoning?


Education cess is the money contributed by all honest tax payers to fullfill “the thrust of providing education for needy” as prescribed by the common minimum program by sonia gandhi aka congress.

Dont ask for any balance sheets, usage, mis-use etc. We have to fund the politicans election promises too. This makes a good meaning of “for the man, from the man “…. democracy in full swing.

In fact this amount is levied on the amount you pay as tax to government in your income tax.

There are other hidden cesses when you even by petrol….thats another story.

There is a tax called GST ( goods and service tax) abroad which is at 15%. Our great PC stole the idea from there but there was a great noise when everybody said you can not tax like that.

SO the intelligent PC said instead of one go 15% we will do in blocks ( slow poison is correct).

What our great PC misses by a mile is that advanced countries actualy use the tax payers money for their advancement and not for politicans private purse.

The Funda of Service Tax is that the people who are in that business should pay the tax and shud never be passed on to the consumers since consumers pay the tax in the form of Income-Tax/VAT/Wealth tax,……..

But what is happening in our Country is that the Service tax is being passed on to the consumer and the Service Provider doesnt bear it. Why shud i pay service tax of Rs.150 to Govt for the services provided by Airtel.

sastry sir,
Either way its the consumer who has to grin and bear all the “production costs” right.

PC says that since you are enjoying a “esteemed service” you are bound to be taxed as a consumer. The peddler use to pay CST,KST which is replaced by single window VAT.

Personally VAT has stopped all the traders to fall in line since they have to CLAIM the rebate with documentary proof of sales from their higherup channel.

But GST aka service tax is bound to stay, spread and increase to 15% by 2008.

Some clarifications though:

a) Income tax – that happens on all forms of incomes earned.
b) Wealth tax – You decide to keep bundles of currency in chests at home (how i wish!), Gold ornaments – this is the tax paid just to have the wealth.
c) VAT – Value added tax is something paid by customer through the manufacturer.

Woudnt it be just nice to invest somewhere but NOT PAY THE STUPID GOVERNMENT A SINGLE PAISE TAX ??

Yes, you can do such an investment and their is an instrument.


coming soon…

Just joking Mohan.. To keep you in the thrust of enthu…
Wiating for it.Thanks for the advices.


I took some time to go throughall of them in detail,

Wonderful initiative by veena and informative tips by financial gurugaru.

Thanks, Look forward to contineous flow of Gnana.

No – its not the CHEAT FUNDS as majority are. A chit fund is a Non Banking Financial Company (NBFC). These are for people who dont have a credit history or collatoral for instant credits. The risks are high bothways due to which they are named as BLADE companies. It cuts both ways 🙂

Unless a chit fund registers as NBFC its illegal. Find out how many aunties/uncles running such show have a registration number in first place!!

Its not chit fund…keep guessing.

Just a random guess Mohan,

Is that the savings account at the friendly neighbourhood post office?

Ha ha ha… vani no.
If the small savings agent foxed many people into believing “all small savings are exempt from tax” is another commission interested agent taking the invester for a raid.

You will have to pay tax if you exceed the standard deduction as mentioned above based on gender bias 🙂

And offcourse, if its still within the 60K barrier – chidu has found a way to eat at it slowly.

Keep guessing. The problem with agents is their greed due to which mismarketing take place and the actual ones are hidden.

I am sure Mohan would be looking at something whose returns are also non-taxable.
Are you speaking about Stocks ? I am not too sure about the legality of the process.. but we can make it work our convinient way(something which I have heard about) !!
Are some investments on agriculture, these people are totally excempted from tax paying I know…
They just pay their electricity bills but not too many taxes mentioned above…!

Hey, I am going to blogroll this… how come no one told me about this ?????

This is fun…

Veena is coming very near to answer – Stocks directly yes but they have so many known and proven bad side effects. Not many have that kind of money to purchase stocks nor can we take that risk.

Just quoting veenas own company – Western indian vegetable oil company quotes at 1960-2100 price brand for a equity share of 2 Re value. 🙂

Agriculture income is exempted 100% and that is why every neta is a agriculturist…

We have so many people guessing lets just test our current affairs


We hav already begun investing in that area 😉

Usha is a netashree in making right? 🙂

One of my spiritual guru has a farmland somewhere near kanakapura belt and grows his own tomato,ragi,brinjal for house hold expences. He does not take any money even for his own stomach! He says where is the need for money now?

OR did usha mean she was into this share investing?

Each answer makes us discuss and understand different point views of so many instruments. Thats why our purvajas said “asking is the basis for learning”

Mohan, it should be one of these then, short-term / long-term captial gains from stocks, mutual funds, futures/options, etc etc… whats left? 😉

Clap. Clap. Clap 🙂

Chaitnya takes the cup of glory with the right answer. Infact as he winks, there is nothing left over?

Gold, Currency are still pending 🙂

Yes the legal game is to play with long term capital gains which is 100% tax free. All instruments which generate capital gains on long term are free from tax.

Sorry folks, its good to hear what you already know from others.

Any guesses how a small time investor with maybe 500 re per month spare can beat inflation, taxes legally?

Small correction – Not all long term capital gains are tax free as i just remember – sale of your anscestral land do not get this exemption.

Just one SIP…! of it is enought Mohan :-0),

Vijay, emails were sent to balaga group, you can subsribe there too!
Welcome to the discussion, Mohan is too good at taking out answers from anybody .. Correction.. ‘Anything ‘ from ‘Anybody’….
What buddy ??

Thanks Mohan!
and you don’t need to be sorry, even if we know, it may get re-inforced into us when you state it here, pls keep such things coming…!



I was referring to the agricultual income 🙂

Whoa!! sakkat gyan on investments… thanks Mohan 🙂

Way back in 1990’s when me and friends had gotten our first jobs and earning about 1500 INR salary, Harshad metha was just picking up his business; we used to sit in somaree katte and dream…

How can we make more money in the shortest possible time legally. All savings bank etc were ruled out as they took LONG time to give the BANG for the BUCK as on wall street.

Somebody told us – equities it is. We heard stories of how the chap in the last house brought silver line scrip for 75 INR on 2nd january and sold it for a cool 283 INR on 14th january. We also heard some Income tax folks are planning to raid their houses.

So share market it was. With out many elders knowing at home some of us with the extra moolah decided to buy the “shares”.

The first chap went and brought silverline script at 283 on January 28, held on till March 21st and had to sell it at 42 INR. His brother bailed him out from the badla traders and annouced at home that his younger brother had just returned form a picnic ( he was absconding fearing money lenders would haunt him).

We had learnt our lessons as a group that you should NOT but penny stocks. You should invest in real good “stocks”. We also found that broker who gave “tips” was only interested in his commission and stopped going to his office in jayanagar.

So what are “good stocks”. Some punters told us that they are BIG companies which have been estabilished for many moons. They should have a solid track record of giving dividens ( profits for investment) regularly. Those are the scrips you need to watch out.

OK. We rummaged all the economic times data including deccan herald obituaries and met. We found out COLGATE POLMOLIVE was THE scrip.

But each share of colgate was quoting at princly band of 620 INR. Even after pooling money – we could only garner 1750 INR for the month. When we went to a different broker with that money for 2 shares of colgate polmolive – he really died laughing.

So the problems we faced was
a) Not enough time to research
b) Not enough money on hand to buy “good shares”
c) Ability to wait out the period till the cycles of shares complete. We all were thinking – invest 10 day and get 15 back tomorrow.

Yes folks, mutual funds are special companies setup by TRUSTEES ( whom you can trust) which has an active FUND MANAGER who does the research regularly and invests the collective money of the folks in buying “good scrips” in the share market.

Your job as an investor is to identify such a Asset Management Company (AMC) and buy units by paying money. This money collected from few small investors scattered around is invested in well researched companies.

The Net Asset Value (NAV) is a number published everyday evening ( share market working days) is the total money that fund manager would get at evening if he theoratically sold off all the shares held DIVIDED by total number of units.

So mutual funds which did not exist in INDIA in 1990 ( franklin tempelton , Unit trust of India were existing but due to lack of marketing we were unaware).

If these basic tenets are through we can next see how money from this is tax free.

Quite a loooooooooong chapter. I would say, 9/10 is my score in understanding this bit.
Waiting for the advanced topic. 🙂
Thanks for more frequent updates Mohan!

A mutual fund invests the pooled money in basically fixed income instruments (debt), Equity instruments (equities) and many more based on the objective of the fund.

Open Ended/ Close Ended funds

A Close ended fund has a normal 3 year lock in period. This is like a 3 year bank FD. In case you withdraw your money (units) some percentage of money is withheld.

Open ended allows you to withdraw your money on a daily basis

Any mutual fund investment appriciates / depriciates over a period of time. This is either captial gain or capital loss.

Capital gains is the EXCESS money you get when you return the units to the AMC and get money back for the same.

Capital gains that occur with in one year of investment is termed as SHORT TERM capital gains. This income is charged at 10% as part of income tax. ( indexation is a beneift by which this can be paid in 3 years based on inflation)

Capital gains that occur beyond 1 year of holding is termed as LONG TERM capital gains. This income is currently NIL.

Viola, that means just invest in a open ended equity fund. In the worst scenario you can withdraw money ( some percentage is reduced for that from AMC). If the withdrawn money is greater than your investment you need to pay 10% as tax.

You just need to hold on 366 days to achieve a tax free investment.

What about risks associated? Dont all mutual funds advertise this like the cancer warning of a cigeratte.

Yes, thats what we plan to understand soon. Hope some basic terminology / confusion is cleared.

Are Infrastructure bonds part of these ?
Even there people say this Dividends etc., I know that it has 3 years lock period too.
I remember paying some TDS when I got my amount back in 2006. It was my first investment & I had opted for the 3 years one. I remember they gave me an option to either get the yearly returns or the total one after the end of 3 years!
Later somebody explained me how beneficial to get it everyyear since the total will not cross some limit which is not taxable etc.,
I felt getting a bulk amount at once was better since the tendancy of mine to save money is more when I have it in bulk :-)!!

No Infrastructure bonds you refere here are related to ICICI or IDBI. They are debt instruments (Like your Bank FD) which has an option to get money on yearly basis or on maturity.

The other day we were talking about ETT policy. You paid tax on the incomes earned by the instrument.

Incase you get money on yearly basis, you have option to re-invest the same in some other higher yeilding instrument ( since you would have invested to primarly save tax).

The overall income from ALL sources put for a woman with in 70000 INR is exampted as standard deduction is what they have tried to tell you.

Your last statment is a truth with many people ( including me).

Even MF is like a Share market which has known players and unknown player less risk medium risk and high risk.

Since its the time of consolidation every of the finance gurus are advising people to invest only in known players such as UTI,SBI,ICICI,Franklin,…. and choose the Medium risk option so that u get back atleast your principle + 7% interest back than taking high risk at this speculative market position.

Hohan Sir thava swalpa belkannu challi.

Welcome to this Sastry sir.

You have posed the right questions at the right time.

Mutual Funds have a defined objective.

Some of them are conservative and try to ensure that captial does not get lost in the worst case. Since they do NOT take on much RISK, the reward is little or nominal too. These are called DEBT MF.

Some of them are extremly adventourus like a teen aged , drunken boy in stupor. Making educated guesses, collated data try to predict in various ways and invest to get the MAXIMUM GAINS. These are called EQUITY funds. Since they take up RISK they are REWARDED with mind boggling returns of -90% to +210%

Some of them are very balanced in their views. They nether want to be conservative nor very adventorus but want to beat a middle path of balance. They invest a percentage of money in DEBT instruments and the remaining in EQUITIES. The idea is if equites returns bad amounts, atleast the DEBT portion will ensure the world does not since. These are called BALANCED FUNDS.

You should be able to choose yourself or with the help of your portfolio manager these MF instruments as part of your risk taking ability very carefully.

Nobody has been able to succesully TIME the market. The consolidation is a phase that markets round the world keep going through in cycles. Its a myth that anybody can predict it directly. There are some indicators though but not sufficient enough. Its like 4 blind men describing an elephant.

Instead of TIMING to enter and EXIT the market, an alternative is to take it in SIPS as veena says.

Systematic Investment Plan (SIP) is one such tool where in you invest a fixed amount of money in the mutual fund every month. The advantage is cost averaging of units you buy. The Net Asset Value keeps changing based on the underlying market conditions which is unpredictable and hence this method.

Locating a good AMC as said in earlier posts is the only step the investor has to do. There is lot of history in saying why a specific type of AMC is usefull.

Before everybody goes to sleep, lets discuss the basic tenets of a “good” AMC and also how that RISK of capital erosion can be managed.

Wishing a happy week end to one and all of balaga.

Is it 70000INR ? I thoughts its 1Lakh + 25K…
25K is what for being a woman(?)
Also some comes from LTA, HRA(lucky people), Medical is separate anyway.
I now see that they have removed that 70+30 slab in 80CC & also have merged pension scheme with 80CC which earlier was fetching me almost 3K IT exemption(since 10K was getting reduced from the taxable amount itself)
My Math is anyway is becomes dull, you can explain us this one too.
Same Q’s as of Prasanna.. Branding or History Performance? Which is more important.

Also Usha’s idea about Agriculture – This topic to be discussed too 🙂

Basically woman get more than men as they are from venus!! 🙂

You are getting confused beyond point.

Standard deduction is allowed based on gender bias.This does not change untill you start filing income beyond 5 lakhs. After 5 lakhs no standard deduction is allowed for both genders ( finally we hit earth)

After standard deduction is removed all your other extra fittings allowed under various sections are clubbed into 1 lakh parameter now. No sub breaks or bars like olden times.

You can pay insurance premium upto 1 lakh or invest in MF’s upto 1 Lakh or have a 5 year FD with bank upto 1 lakh or invest in NSC upto 1 lakh.

Agriculturists entire income is non taxable provided they dont have other sources of income. In fact they dont even file IT returns so it is not practicle for me and you to skip it in that fashion unless we are politicians.

If you want to know more why your tax is getting increased visit

Mohan sir presently there is nothing called SD i think only 1 lac is the limit whatever one has to do is within this 1 lac.

Thanks sastry sir,

Has information that SD is still allowed as per IT department website.


This is a pet subject to talk about for any person who is “managing” things.

The idea is to PERCIEVE the possible MISHAPS ONLY. People normally will not like to accept, since this causes primarily emotional loss followed by notional financial loss at times.

The idea is NOT TO be an optimist but think like a pessimist for a moment. This is forward planning of an untoward incident in real life in real time.

When we invest in amy Government backed instruments, we can sleep happily as any loss is offset by the Indian Government ( Simply print more currency and issue!).

But, a private instrument is not backed by anybody and your investment along with returns is linked to market forces. So how does one plan for it?

The idea is to list down our immideate needs without which we can NOT live. There may be some spare money we can speculate with ( yes gambling is the right word for a street level investor).

So put aside all those investments which you can ILL AFFORD to lose in Govenment backed instruments. Nothing is left…you are too pessimist or risk averse. Nothing wrong with that.

Take a portion of what is spendable or you would like to take a chance and invest in instruments related to market risks.

Time series study of data related to equities carried out by professionels has shown that their are business cycles in the world market and nothing is constant – neither the booming share markets nor the bubble bursts/scan exposures.

If you are having a long term horizon regarding well researched equities, it has been proved that equity not only has protected your capital, but also has beaten inflation with good appriciation.Its time to point out that EQUITIES are the only class which can do this. Not even fixed assets in terms of real estate can do that if not for market demand in excess of available resource.

So what is long term – its in the range of 3 to 5 years. Too much to fathom there? Dont all our debt instruments force you to do that? Just think about it.

Risk is part of world business cycles. It depends on when you are looking at your investment to cry wolf. For example if you invested in May 2006, you would have screamed “I LOST MONEY”. If you waited till December 2006, you would have smiled and said ” Oh i got 12% returns”.

Consistent statements of “OK i got xxx% returns” can be seen only beyond 3 to 5 years frame. Yes, there are some mid caps which race and give 108% returns in a single calander year. Thats for the next session i suppose 🙂

Very good one. More than anything I could understand what you are talking about.
I thought all M/Fs are 3 years lock period, I don’t know why…
what is this term cap by the way ? On a lighter note, topi ?? andre ellargu topi haakodu anthaana ? 🙂

Thanks veena, that is the difference am trying to make between “repeated data” here and books,googled materials.

Obviously except for tax saving mutual funds…there are no restrictions for all other mutual funds. The only restrictions are EXIT LOAD ( if any) and capital gains/loss tax therin.

Close ended mutual funds all have a lock in period. We are mostly talking here about Open ended funds. Both are very similarly structured products.

No cap is not TOPI. 🙂

There are so many people in our country who earn money by Topifying that you have raised that good question.

As a small child, parents often use the “eat food and watch Cartoon Network”, extend it to “Carrots and stick ” policy of schools. The same story is true with investments in terms of “Risk and rewards”.

The more risk you are able to take, the more MAY be your rewards too.

All Mutual funds have a pre-determined mandate. They give you an “offer document” where in its printed with reference to WHERE the money and what proportions will be invested.

Typically for ease of use and understanding, mutual funds tell their proportion of investment in Large capital , Medium capital, Small capital and Tiny capital companies.

That is our large cap, mid cap and small cap TOPIES…..

What is this further? Large capital companies or those listed on a stock exchange ( also called blue chip stocks) which are established leaders in their business, have a solid track record of managing all ups/downs of the industry and importantly have given good returns to investors year on year. Since they have already become elephants, they are stable but growth is slow.

Middle capital companies are budding large capital companies. They have potential to become future large caps. They are baby elephants. They are some what stable but have huge growth prospects

Small capital companies are those which are listed and traded on stock exchanges. They may suddenly go bankcrupt like enron one day. They are many small cap companies. They normally dont have the bandwidth to withstand even a small round of bad media exposure. But the limelight is , they gallop extremly fast since they are the possible future elephants. There is room for growth.

Thats why we said 108% returns of a midcap in a single year may follow by -60% returns next year.

In summary if you are planning to play it safe, use large caps. If you are planning to play little safe but make money too, use middle caps. If you are the adventours types baced with solid and sound research – small stocks are the best bet.

All said and done there are different strokes for different folks. So choosing a mutual fund is done but what about Asset Management Companies? Is AMC1 better than AMC2, Is track record more important? Read on further …..your Q&A is what inspires others too.

(wow I was really looking for info like you’re sharing… thanks a TON Mohan 8) !)

Thanks sanjay. Glad to hear that is usefull.

An interesting question is being debated at related to investment again.

We were talking about an Aseet Management Company (AMC). Normally it is suggested that you pick the Mutual Fund which you need based on risk appitite. It could be a Equity Diversified fund with Large cap,Mid cap or small cap definitions as per prospectus.

The Fund manager is the employee hired by the AMC to invest your monies according to the mandate preset. Here are a few things to lookout in such a fund manager.

a) Does the fund manager take decisions based on “own perception” or are there set rules to be followed by the AMC? This is akin to a Quality Management System.

b) Does the fund manager work alone are assisted by a team. There are many instances where one single person was responsible for the extrodinary growth of a fund. Needless to say that it flopped the minute he quit the AMC. Its good to relay on a team of managers or assistants atleast.

c) Examining the history of the fund manager in terms of does he normally pick stocks agressively or passively. Does that suite the fund mandate?

d) Does your fund manager keep chaning the AMC where he is employed frequently. Yes, this is very important as the investment styles, quality are different with each person.

Having said all the above good words of a mutual fund, we have added a new word out there today – “diversified”. What is the meaning of this. Does it mean he buys all the funds listed in the stock exchange 🙂 Catch you later.

Are these Fund manager details avaialble to the customers ? Truely, I have no idea about this one.
Can I get these details on the huge document they give it ? Otherwise where ?!

Good question!!
a) You need to visit the AMC website where they “proudly” proclaim the greatness of the AMC. The “offer” document does not tell you such risks.
b) When you see the fund manager column of offer document you can get to know wether its an indivudal or team.
c) & d)After you start investing for a few calander years, you need to watch out websites like or the specific AMC website where they keep announcing change in fund managers, aquisitions/mergers etc

You may say “huushaappa” where do i have time for all those? But just imagine you going out on daily basis and doing per company above sort of research – Guess that justifies investing in a Mutual Fund.

To answer that last question again – follow blindly the leader initially and you will get the “knack” of who is who of the Mutual fund industry. So what is the blind leader factor – google websites which give you a composite figure based on voltality and risk adjusted returns chart and give “stars” to them.

Honestly speaking too many things these days Mohan, I have still not filed my M/F receipts & checked the units allotted to me!
I need to streamline my priorities, this was one resolution of my new year!
I am attending Pranayam Shibir, so my day starts at 5:30am now & ends late. But still 4 items out of 10 remains pending!
I need to first check who is taking all my time!
Thanks for this answer. I will outsource this work to prashanth atleast, he claims he is poor at maths(thats why he is a doc) 🙂

Hope you are able to “breath out” all the fresh air you “breath in”… hushappa…

Dont outsource ree… He will give sodium penthol injection and make the fund manager go to sleep 🙂

Before getting those info, plan out your risk profile in terms of how much you can save per month etc … then that would matter right.

so much point to point calculation will not work out with me Mohan.. I generally keep huge in buffer, sometime I do some unexpected expenses & that time we can’t afford to come on roads.
Thanks for the suggestion! I have no plans of investing anymore for now.Its already there.
Talk about Open ended & Close ended.
Is it that I can stop paying the monthly installments for the former ones ?
Also i remember seeing a Life insurance documents also, Is that both of them are connected ? for eg., Metlife MF ??????????

Open Ended mutual funds are available for purchase and sale on a daily basis

Close Ended mutual funds are available for purchase only in the initial offer period. Redumption is also allowed only on certain predetermined days of the month. Think about this like a bank FD which matures and all your money is paid out at the end.

Am not sure of your other question please.
BTW: Dont mix insurance with investments. Want to know one more way of paying less tax?

Mohan Said,
Now a days one doesnt need to change jobs, mergers and aquisitions are the order of the day.
Every small fish is predated by the bigger fish.

Veena Said
How do you classify the fish is big or small.. hope we remain big for ever.. atleast I don’t prefer to work for any MNC..(nothing like opposition, just a choice)

Mohan Said
The “fish” is identified by its size. The size refers to “market capitalization” or read it as percentage of money captured by this company from general public for investments against profits for running the show”.

The bigger the investment, bigger the money it generates. It HAS to succed and use it or it dies like a fat fish drinking water to its grave.

Huh..Veena yours is an Indian Multi National Company (MNC) with full fledged offices in Asia pecific, Americas, Middle east, Europe …. What do you plan to do ? 😉

Veena Said
When I referred MNC, I didn’t refer it this way so I am okay.. !

Mohan Said
No veena,Capitalizaton and MNC are different concepts. When it comes to size of fish we use capitalization to define. When it comes to MNC it just should have independent offices (cost centres / profit centres) across geographies.

Dont know why MNC is bad.. Maybe TNS has propogated that idea too efficiently. I cant understand why otherwise. At the end 86% of indian
IT companies have MNC clients. MNC in production etc may be causing havoc on environment , employment et all

May be I don’t want to work for a company which has the profits counted as part of economy to some other country… Pls dont’ bring TNS here, I don’t think he can influence so blindly..

Ok. Then you ARE working for a MNC 🙂
Only your definition is little strange. BTW, people will need to be explicitly told about your definition otherwise the default will be used.

Mohan, if Veena dosen’t want the money to go outside the country for whatever reason – from an economics point of view, does working in a national instead of international MNC make a difference? I think anyway even if its an Indian MNC having foreign clients, the clients wouldn’t be using the services of the Indian MNC if it wasn’t making even more money at the end of it, right?

There is a good old saying “Dont put all your apples in one basket”. The great wisdom is to ensure that you just dont depend on one simple basket to provide you the fruits of labour over time.

Same is the principle to fight the “RISK” in equities too. We do not invest all our investments in one company, one capital oriented or one sector.

The keyword there in is DIVERSIFY.

As equities are subjected to market risks, a collaps in one company, one sector should not make us see our capital getting eroded.

The discussion further specifically talks about Mutual Funds but hold good for stocks too.

Mutual funds are initially categoriesd for investment purposes as pure equity, pure debt , Balanced , equity diversified.

Pure equity are called the “plane janes” of the investment industry. They just try to invest across companies, sectors and market capitals.

Pure Debt baseed investment try to invest in different fixed term instruments which different rate of returns.

Balanced mutual funds have an aversion either towards debt, equity in proportions again.

If at all a single company is doing bad, it represents only a portion of your investments and this loss could be made up off the earnings from other companies. That is the primary reason why many companies of many sectors are included.

The sectors too cause problems at times. For example if there is a unflavourable taxation policy announced from Government of India towards shipping industry, all related company share of profits drop and hence it is not a good idea to load up single sector funds.

🙂 There are some adventours people who research, predict and invest only in one single sector against the odds and reap extrodinary benefits – they are called sector funds 🙂

At the end of the day the idea is to really make profit. But here
is some more insight into the same.

Yes you are bang on target. Its a global village. Lets remember that we are running on a global economy and if America catches cold, we sneeze.

A good example for this is the 2001-2003 down turn in the industry.

Lets take a typical top rung of the IT busines today. They take on a project at X $$ and execute the same for an American Client.

Had the American client themselves executed the project the would have incured X+n $ and hence their is a direct value addition to American economy.

Then only purist form of patriotisum would be to produce a service that is consumed in India itself.
That is why Mohandas Karmchand Gandhi is so very relevant today 🙂
Thanks sanjay for pointing that out.

Atleast it counts when we speak about S/W exports of India ..
I beleive more in making a difference more than bringing a complete change! Atleast its better than ….. FITB

boy oh boy..
Am confused.
a)Whats S/w exports related to the defintion of MNC?
b)FITB expansion please.
c)Sanjay now am beliving what suresh had said yesterday .. Am a fast learner aint i? 😉

Have a nice long week end folks.

S/W exports counts what a company gets money to the country.. The MNC talk is over, we are talking about contributing the money to the country…

FITB is Fill in the Blanks… FULL STOP!!!!

Hey guys, check out this week’s THE WEEK.. There is a small supplement about Tax planning..! I liked it a lot

MOHAN’s Step by Step Hiring process
Here is my complete step by step story of hiring

Practically, the HR desk is flooded with resumes of all size,colour
and fonts.

1)Normally the HR tries to IGNORE resumes which dont fit. So OUR resume should make through this lot is the primary goal. To ensure
this happens the light weight factor along with what can be offered by person is pepped up here.

2)Next is the technical person called Project Manager, Delivery Manager who would have atmost a glance at the resume. This person has
an average concentration of 7.5 seconds 🙂 He has truck loads of people to be selected so unless you are in that rare blood group type
(SAP/JD-EDWARDS/COBOL-AS400 types) you dont get a second glance and IN you go for the database.

The idea of technical / vertical fitment is for this manager to actually get a personal interview.

3) First round is the ice breaking stuff. First impressions are best impressions. Studies have shown that on an average people like or
disklike others within 1 minute of meething them for life time!!!

Better present yourself visiblly with good vibes and also present your thoughts very carefully. This guy is only screening your technical
strengths. Dont give him an opportunity to put you into database. Give open ended answers. If J2EE is your strength but .NET is his interest
but if we are depsperate for a job change – just dont tell him. Many a times asking the right questions will make him come out with a
plethora of information including that this is a maintainence project in the garb of onsite position

4) There are companies which hire on 2nd round with HR. Some companies make many people do the same routine. Nobody is interested actually
unless it hits their bottomline. So the comments of the first inverviewr is normally “dittoed”

So happy hunting.


By Usha
Fantastic inputs Mohan,

Usualy,Too many cancellations and reschedule of interview slots too would put off the interview panel. They would weigh punctuality, communication, commitment, presentation also equally alongwith the technical skills, since the hiring is for middle management.

For campus recruitments or frehsers certain level of allowances (Informal) will be there in absence of professional exposure among students.

Interviews for beginners or entry level positions upto 3 yrs are done in an informal envronment in most companies as the attrition in that slab is higher.

Whereas interviews for 4-10 years resource slabs are very important in any company. They are done with atmost care and formally. Every minute detail on both professional and technical sides count here. Since Sr technical panel spends time on these interviews, they are more focused about the requirement v/s resource match. Understanding of the requirement-Suitabilty of the skills becomes very important here, hence a proper understanding of the job is necessary here, make sure the consultant or the HR gives u a detailed insight of the requirement before u meet the tech panel. That helps in preparedness to face the discussion better and come out with flying colours.

Initial round of HR discussions , (pls observe if you are interviewd initially by a Hr executive or a HR head )would have to be faced calmly and confidently as the feedback of that meeting would go to the tech panel for considerations 😉

If the hiring is going on for critical posts, and if you are selcted you have more negotiating powers. Its your lucky day 😀

All the very best


In one of my previous companies, the company chairman used to make his comments on appraisal.

He said something like this “Find a job – you slog it out for your life time; Find some thing that interests you – You not only enjoy doing it but also get paid for doing so”

The above sentence keeps striking me when ever parents get into a tiff regarding what should be the chosen one for the sibling.

The person in question is as confused as ever and look up towards the custodian ( parents). After dabbling in that field for some time – if its a fit its good. Otherwise we keep shifting jobs/geographies in the name of good opportunity,Great learning et all.

So hobbies and interests are more important than our academic intersts to make money.

Never know.. Now blogging is a hobby which is been percieved by many of IT guys.. May be people will now make it pay blogs like how the channels are made Pay Channels…
Vijay, a BB Idea! 🙂

You are speaking the truth. Look at RwB. If am remembering right somebody saw his blog and offered his current position as art director.

Think he is one person who likes his job and gets paid for that too.

In future blogs would be the adevertising media not akin to a model and noise but by sledging ideas into minds with restricted research.

Veena \ Sanjay : Is there a method in madness so that we can create a fresh post like in a blog so that any future guest would find it easy to read?

This is fairly easy to read & understand Mohan…
Thanks for the comment.
Pls continue with the finance funda!!


Equity Linked Savings Scheme (ELSS) is a tax saving i nstrument. This is probably one of the good avenues for investment.

Here is how it works. You invest into this mutual fund which has a lock in period of 3 years and get tax benefit. The monies are invested in equity and debt markets which return you a good amount since the horizon of investment is a minimum 3 year.

Sadly the advantage a fund manager had when investers can NOT actually redeem the units could have been used for buying and holding good quality equity/debt instrument. But, the AMC’s have added an extra load so that periodically investers can redeem just in case!!

The final advice from market gurus are invest only to limits you would get tax beneift and continue in any other equity diversified mutual fund.

Unit Linked Insurence Plan ( ULIP) is the major value addition for the insurance industry in the last 6 decades!!.

This is how it works. You take an insurance policy mostly endowment ( it benefits the insurance company as premiums are high and commissions are great for agens – sorry no term insurance here) which is invested in equities and debt instruments. You get tax advantage here too.

The advantages are you get ver minimal insurance added with a market linked returns for your investments. You also can freely move and mandate your insurance company as to where your money should be invested. This can help you in shifting down risks in downslide of markets or depending upon your age factor.

The disadvantages are the steep entry loads for first year ranging from 15% through 22%, second year of 9% through 12% and 1% through 3% for rest of the INSURANCE TERM.

The AMC here does NOT act transparently. They do NOT publish where the monies are invested which is a major concern. They charge administrative charges of 10 units per annum and deduct the same from your account.

In the long run you land up paying too many loads,charges to the AMC and any tax beneift or market returns are eatan up. To break even and profit you have to lock up some where near to 10 years.

The bottom line summary is do use these with utmost care and after reading the fine print. Do NOT believe in your agents smiling face which says this is what all people sign.

I would personally still advice people to use ELSS as a diversification tool and invest rest in diversified equity funds with low voltatlity and good risk adjusted returns.

Whats that voltality and risk adjusted returns – think its time for me to log off 🙂

Good One Mohan! My other question got answered today.

When do you think we can stop investing on these ? 3 years ? Because by then we would have the returns to reinvest… !!

Liquidity bagge ond swalpa bariri..pls

Mohan one approach is you can create all your posts tagging it with a category “mohans funda” and in the above page we can give a link to this category clicking which a reader could access all your posts.

Voltality is the amount by which the Net Asset Value (NAV) of a mutual fund fluctuates depending on the investements value. This is the main cause of worry to investors. The standard deviation is a mathematical measurement which tells the investor how risk prone his mutual fund is.

Standard Deviation (SD) is a measure of the volatility in a mutual fund’s performance; a lower SD effectively implies lower risk.

Contrast to this, Sharpe Ratio (SR) is used to evaluate how well the mutual fund has compensated investors for the risk borne. For this purpose the mutual fund’s returns are compared vis-a-vis those of a risk-free instrument (usually a government security). The higher a fund’s Sharpe Ratio, the better is the fund’s performance on the risk-adjusted return front.

After having made your portfolio plan, zeroed in on your AMC and fund, this 2 are important numbers you need to consider before investing and monitor once a quarter.

BTW, these numbers are published by leading analysts in websites and all you need is to have an awareness of these numbers.

So many jargons to remember & get reminded about !! NAV , SR, SIP, ULIP…!

The Government should provide some safe avenues where in its subjects can invest and also finance social projects. This is done through debt instruments. Unfortunately this is not in tune with inflation at any point of time.

The only other option after exhausting the limits is through investments. You dont need to remember anything – you just have to look up the NAV once in a 6months. Rest are all optional. Hope it calrifys.

Its our money!!

Money bagge onderaDu lines heLidru ivattu RB show nalli.. nanage first nenpaagiddu neevu amele nanna baaki avaru..! I not just money, everything is ours only..
Govt bagge nimma siTTu artha aagatte.

Thanks for your kind words and your understanding of my anger. Its the Government which has been killing poor people [ agreed there are 2 good cases out of 10].

Kiruba shankar ( has a sorry tale of how a youngster who was in needy surgery was turned away from Government hospital.

These planned hatcharies are to be audited by human rights groups. Its not the rich only to live and roost but poor to should live like kings.

I many times feel you are suited more for other jobs & you tend to anger out everytime.. Instead you can represent the janta & see how its to be on the other side of the table…!
Well, its easy said than done.. haagantha naaenu govt kade inda samjaayisi kodtaa illa…
Ask people to stop going to US & stop working for IT & join govt sector & let me see if anybody want to do this.. 🙂

Unfortunately every group i worked with has said cheekly you are better off in some other group. I now know they just wanted to get rid of me 🙂

Good debate point veena.

The probable answers for this happening in first place are
a) Reservations
b) Shoddy Government Policies
c) Unemployment

The list is big

olleya vicharagalu
olleya acharagalu
iddare yellavu sogasu
mohan and veena happy to read your comments with
so much loaded with various issues
munduvariyali nimma i sambashane………….
tarali namage santhosha i sambashane………

I don’t think Unemployment is anymore a problem.. Now this alteast been eradicated to good extent. You must be knowing that our govt conducted some job fair recently, may be for some BPO’s or S/w companies, but they did…
Atleast now I don’t see problem like not even one guy having job per family. but yes we have lot of people who wants the top post, those can never be satisfoed.

About point a), we have spoken enough..
b) Govt policies, GH once told me which I really liked it…
If govt is strong the law is weak if the govt is week, the law is strong..

Govt includes citizens also, I feel we should first do our job correctly & then question them.. We lack in that one too.. Many of us just worry about ourselves, forget about the neighbour…

About getting rid of.. Yes, sometime even I do feel honestly!!

Pranesh avare, neevu kooDa debate maadi..

Unemployment is no more a problem? 🙂 Its so nice to hear it.

If unemployment is even today as high as 45% in INDIA, Underemployment – something you will only study in textbooks are as high as 30%. These are the farmers who work for seasons and are unemployed through out otherwise. Sorry veena you may compare 10 years back and find so many BPO jobs etc and say this but world standard is 6%. If you are not near it, you just cant build the empire.

I have nothing to talk about GH and policies. You can see the effect of suicides – if a counciler will sit and provide employment and proper debt control will these guys pull the plug – NO. Its easy to quote something nice, laugh and ignore it.

Madam, do you mean to say myself and yourself are not working? Or do you want us to start some NGO? Our work stops at voating. Any other abbresions are taken care violently as bundhs,morchas et all.

We plainly lack visionary leaders. Not every body can lead groups – its wrong to even ask them to do so.

Veena for last time I thought somebody else will get in and talk something different. But except praneshachar nobody is interested…..

Folks contribute.

Mohanavare yavagalu govt na blame madodu nanna prakara thappu.

Its all upto the local community to think ahead. If we have the religious leaders of each and every community present its all the prime duty of theirs to guide the individuals. Regarding Farmers they are selling off their lands to MNC in each and every city making millions and then coming back to govt saying they are unemployed. Regarding reservations i agree that govt may have to rethink about it and atleast reduce the percentage.

You cant say Anishtikkella Shaniswara ne Guri

Welcome to the fight sastry sir.
Hope others too present their cases. I have already done post mortem 😉

saastrigaLe addu bidde.
Yes, I heard the same story, all farmers are selling off the land & living the life with luxury for some temporary time & then blaming the MNC & unemployment etc.,

AnishTakella shaniswara antu soooooooooper saaaaar

Mohan avare how do they calculate the tax on HRA if i’m repaying the House Building Advance at the rate of about 50K at interest being 35000 and Principle being 15000 per annum. and HRA am getting is around 80K per annum.

House that i have built is shown as self occupied since my parents do stay there.

Anishtakella illetracy guri saar,

Raithrella yen maha madthare antha paatnadoru, pattandorella yen maha kelsa madthare antha raithru.. eee janjatadalle agogatte.. raithrella vidye kalthu krushi paddathi uttama madodh bittu patnakke bandhu 3-4 savira roopai dudidhu bhoomi banjaru madthare, pattandavrella antha bhoomin kondkond layout madthare.. vishavrutha andre vicious circle idu ..

Basically ara avra kelsa impt and one can excel in same line thru knowledge and hardwork antha gottadre every occpation has future alwa….
Government plans are there from beginning, adna use madakkintha misuse madovre hecchu.. then everyone will join hands in blaming the leader, government and system ….where all were created by us (Aaam Janta)

your interest on housing loan will be allowed as a deduction in your income from house property and it will be allowed even if house is self occupied.
principle portion of the EMI will be taken for consideration in your deduction under Sec80C i.e. upto Rs 1 lakhcategory
As you are staying in Hyderabad you can delare your House Rent paid and lowest of the follwing
will be allowed as exempted under sec. 10 (13 A) amount equal to 40% of salary (50% if in Mumbai Kolkotta Chennai and Delhi )
2.HRA received by the employee for the period during which rental accomodation is occupied by the employee
3 excess of rent pain over 10% of salary

chck up with your Pay Rolls people and you must get exemption for HRA for the least of the above amount

If you are living in self occupied house or live in company leased accomodation treatment are different and you will not get any exexmption
for people who stay in own house FULL HRA is taxed

addendum to previous comment for sastry avara avagahanegagi and for otheres who also wants to update on this and can see
salary as defined in Act to taken normally incldes basic and da also if terms of employment so provide etc. etc.,

Usha, every word you have said has value in it. Thanks for sharing.

mohan helidahage every word is worth gold. It is true slowly the land for agricultural purposes is coming down. All extensions around all cities and towns were lands under cultivation earlier.
at this rate where we will land is big ???
every body wants fast bucks and forgetting the roots result will be disaster only

Thanks Pranesh sir, I have one silly doubt again, What if i can produce a receipt for Rent paid equal to my HRA ???

Will no tax be deducted ?

if both are the lowest then yes but it may happen your land lords income can be cross checked if he has not delcared this in his income from house property it may pose problems for the guy who has issued otherwise it is ok

Buying GOLD
Gold is the historical hedge against inflation. People invest in this yellow metal but trend analysis of growth has basically only beatan the inflation. Atleast it beats inflation is a big relief.

If somebody were to try and invest in gold – buying the ornamental type is subjected to many risks in terms of purity, storage, resale etc.

Exchanged Traded Gold funds ETF are the novel method of buying gold without risks of purity,storage but with good liquidity. The only thing you cant do is wear it 🙂

May sound very great guys. Its a simple mutual fund which invests only in purchasing gold on behalf of you, store it on behalf of you and sell it on behalf of you. All you need to do is purchase the mutual fund units.

One thing to be noticed here is that you need to have a DEMAT account to hold these units as they are traded on exchange like a equity share. All other things like NAV, Loads etc are as a general mutual fund.

You can checkout on ETF for more details in here.

Nice thought, I wish I could wear this Mutual funds to my family get together.. namma attege idanna heLidre mane inda aache Odistaare ashTe 🙂
Jana heLthaare, kashTa sukhakke antha chinna belli itkondirbeku anthaa .. ha ha ha.. most of the time, we attach emotions to these ornaments, specially me.. idu appa koTTiddu, idu ganda kodsiddu.. so MF & Gold interchangeable antha buddi heLbahudu ashTe..
Well, nice to know about this ETF…! Nice concept.

” wish I could wear this Mutual funds to my family get together” — LoL 🙂

“kashTa sukhakke antha chinna belli itkondirbeku” — This does not hold water in the modern economy. The reason is plain simple. Today afternoon you have to remit 2.5 lakhs for an urgent operation of a dear one – try selling your Gold? You will get to know how ill-liquid it is. A Gold ETF can be re-deemed in T+3 format and is guaranteed at prevailing NAV prices. Gone are the days of kings and wars when gold was the only accepted medium of barter.

“we attach emotions to these ornaments” — This is another major reason why you should NOT buy gold or gift gold. Emotions play havoc with our minds.

I agree, sometimes this liquidity thing plays.. I still remember we needed some urgnet money thru DD & it was a holiday.. Nothing works.. you have cash but need bank for the crossed DD..

Somehow.. chinna ella maarodu andre its another emotional hit.. people say, adenu astondu kashTa bantaa ? so ultimately we end up with lot of it…
Mothers donate it to kids or the atte give it to sose(the manetana jewellary)..

Now Dhavanam or somebody is paying a lot of money to antique gold, I wonder what was the deal.. They are doing some research on the antique designs etc, itseems.. that way India has a long history !

🙂 Good joke on Davanam 🙂

If you are not knowing – Getting a customer to the shop is half the job. Getting them to buy a new one with discounts is the next 50% of the job and davanam understands that very well.

Why you should NOT buy gold as ornaments?
The joke of design and antique are quite old ones. Who would like to wear Aurengzebs design unless its for a museum or a drama? Every body wants latest designs right?

So in that game the jeweller will add making charges whic you wil not get when you sell the ornament – you Loose.

In the same game the jeweller will actually palm off some percentage of loss as wastage. In fact an ornament can not be made without mixing silver or copper. Those few Grams are paid by you in GOLD rates!! – you loose

In the same game the jeweller can NOT guarantee the purity of gold – Even the latest certificate provided by Jewels De paragon has gone to court. – You loose.

In the same game if you have it in house, thefts are high. Keep it in bank vault – you need to pay charges. Latest is if the banks valult gets burgled – you dont get any money for your jewellery. Ask your nearest bank manager. There are cases against canara bank, SBI for 2 years in Delhi court – You loose.

Other than the emotional attachment, show off value an ornament is useless.

Gold based ETF beat all above logic. You never see, hold, touch, doubt purity, no making charges,wastage, theft loss.

All you need to have is a DEMAT account and sell away to glory.

A few rumours doing the rounds for wednesdays chidambaram circus budget.
a) Hike in STT – Security Transaction Tax is levied if you trade anything on the exchange floor
b) Hike in Short term capital gains. Remember if you sold off your units before one year, you need to currently pay 10% of gain this may be increased to 15%
c) More service sectors added to the list. Ensure you pay tax many times over
d) Hike in standard deduction – Mandatory since inflation ate away 6.8% officially

Lets see how much nightmares are to be true?


There are many SMS’s that fly around stating 21st is record date XXX AMC is declaring 80% dividend, LLL AMC is declaring 50% dividend …

The pitch is extremly high pushing the investor to put in his money so that he can get that dividend.

THis is very good for the AMC as it gets more investment, Distributor earns his comission while the investor is left with a dibious investment which he did NOT require in the first place. The final catch is that the investor has paid 2 times the entry loads for the same investment!! How??

When the distributor coaxes you to invest in that particular fund before record date, what he does not tell you is that the NAV (Net asset value) will drop by an equal amount on the record date.

In simple words, if you invest 10,000 INR today and dividend is 50% of each 10 Rupee unit, the AMC will first charge that 2.25% load, allocate units to you. On the record date, your value diminishes by the amount given out as dividend.

So what do you do with that dividend, Normally we invest back right. Yes this is where the 2nd time load payment happens.

Bottom line is that DONT FALL FOR THE DIVIDEND RECORD DATE. Analyze and buy funds that meet your requirement only.

wait and watch budget by P.Chidamaram will roll out from 11a.m. onwards let us see what is in store will it give hope for business growth will it give some relief to individual particularly salaried class wait and watch

Due to congress losing power in punjab and UP, its backseat to reforms and front seat to popularist ideas…. keep fingers crossed.


The budget is a gadbud as far as common man is concerned. I dont know who this AAM ADMI for congress is.

In terms of MF, chidu thinks that there are hoards of individuals waiting to go and invest abroad and hence has increased that cieling which is of not much use to majority.

The 12.5% dividend distribution tax has been hiked to 15%. So when ever you invest in any debt fund, the dividends are pretaxed.

And to 25% on dividends paid by money market mutual funds and liquid mutual funds to all investors.

There is a minimal hike of 10000 INR hike saving 1000 Rs for the individual.

Overall a bad job, congress will have go pay for this an go. Nothing much to write about ( now a days write and rant are same words huh?)

1% education cess more for present 2% to 3%
totally a dull budget and even his speech was not
so strong it was typical chidambaram style
AAM ADMI congress is yet to realise who is this
this was supposed to be a election budget and people were expecting some sops and total disappointment for all

This budget is not a kind of one industry expected its all a short time measured budget. Right now just control inflation which our Cong talks of only 6.5% which is only average but in terms of necessary items it could be close to 10% !!!!!!

Salaried class bears all brunt in terms of Cess Service Tax and what not.

Devare ondu dari thorsabeku.

True sastry sir,
The Government calculations of inflation is purely based on WPI numbers sourced on fridays. The actual inflation would be 70% more than the official estimate.

Looking at investment, all banks, debt funds are ruled out. Gold mutual funds on long term horizon or investments in larg cap mutual funds for 5 to 7 years horizion should get you 15% returns on worse case basis.

Income tax for netas and agriculturists is optional. But chidu wants to milk those goats but the salaried class gets hit allways!

Nice observations by praneshachar too.

Credit cards are the bane of life. Some see it as boon and live by the credit line.

Historically credit is provided by RBI as a money multipler mechanisum. There are many categories based on which the credit is given.

Long term is the preferred way with a good collateral like housing loans.

Next are the medium term loans for capital goods and expansion plans of industries

Short term are for meeting an immideate contingency etc and the big one tormenting our households.

Credit comes with interest rates. They are low where risk is low and High when the risk is high.

Little wonder that credit cards charge hefty interest rates. You can derisk a little bit by providing some collateral.

do they really take collateral ? when ?
This is news to me, just to know about it… Credit cards can prove double swords you have written a post already about it on your blog…!

What I meant about collateral is that when you take a personal loan and pay off your card, the personal loan is based on your salary earning capacity which is the collataral indirectly.

I have given the essence here and details in the other post.

Hope it helps.

Okay, I understood it a different way.. Read collataral along with the card & not the personal loan…! I somehow always thought collatral security has to be something tangible like house papers etc., Capacity to earn is an intangible thing which might be lost at any moment!!
Also, personal loan attracts processing fees & their pre-closures charges are hefty like 6%.. It indirectly hits your credit score..The bank statement shows it in a way alva ?

I think the credit history & such thing should come in India also, otherwise this referrel checks, & other process is so painful…

REcently Crime dairy & Vijaya karantaka showed up saying ICICI & its collections agencies.. which is another name to the trained goodas… Now people think thrice to transact with ICICI , Media is so powerful.

There is been a nice post on Vijay’s blog today.. Business buzz!

Between devil and deep sea, choice is very less. Personal loans and credit card debts are similar.

Depending upon the amounts and percentages invovled, you need to take a calculated decision 🙂

ICICI is more prominent but all the banks including the great SBI does this. The main problem is judiciary system which is outdated and takes 17 odd years for resolving a single case. Knowing this, the banks try goonda technique.

Ok. Am not being negetive but thats a fact for the bank managers asset recovery team!

BTW. There is a dedicated post for all the great woman in this balaga


There is an article called “different kind of dieting ” by Shakuntala Narasimhan in Deccan Herald today.

This provides an other dimension on our lives.

PC has made it again. He has made a simple statement 3 days back stating that all tax benifits given will be removed in a phased manner. Since he allways gets what he wants, here is what we should be doing.

a) Ensure you dont lock up money in long tenures with out tax breaks – Prime example for this is the 15 year PPF account followed by NSC or equivalent bonds of 6 year durations. Avoid using these instruments fo r tax savings henceforth.

b) All ULIP plans, pension plans become that much more expensive as there are no more tax deductions. So folks, those who argued and ignored that insurance is not a good avenue for investment, get ready to calculate surrender charges for policy or the single digit retuns which is ulterior to even FD returns.

c) Take note of recent SEBI guidelines stating the FMP which expires does not mean your money is guaranteed with returns like a FD. Most FMP’s place their moneis in CRISIL rated papers etc which are risky too. Forget tax and try to save the capital there.

The foot note is very clear. Steer away and try to correct your investments if at all they were done for primary tax reductions.

PS: Can srik or veena move this as a seperate subject line..i coudnt do it.

do you loan money to people in the united states?
i have no collateral that i can use.

Welcome to this site. Sorry, this is a portal to exchange views and ideas about different topics. Financial transactions are not done here.

Ree Mohan,

Nim Gyaan kodo style nodi papa aake neevu janarige saala kodtheera andkondidaare. 😉

Ille bellur helo hage – banker margyya ago ondu suvarnavakasha kalkonde! 🙂

Supre ree king rooster. avaru keLiro reethi nodidre paapa nijavaaglu haNa beku anno tara ide, nodi elladru arrange maadi. mortgage bere ilvanthe, so neeve financial advisor aagbidi.

Adu enu heltharalla ‘ madhuve agu bramhachari andre neene nanna hendthe antha’ hage agide nanna kathe! Bellur sir innu ondu kavithe birdillvalla andtha kaitha iddine.

Mohan avare Neevu yavathuninda Saala kododikke shuru madidari. Interest rate RBI ge on para athava kammige koduthaiddira ??

Defaulters na manege bandu jodithiri athava rasthe,bidi,office ge bandu chachthiro ??

Nanu saala maDabekkagithu aadare avaru NBFC scheme nalli barabaradu.

Yeno Mary madam yeshtu nimanna nambidro, avarige ashte besara agirabohudu nimma negative reply dinda.

finance guru invu yella details heli andre hege adella avara trade secret
avara post mattu financial gurr title papa nijavaglu sala sigutte antha approach madi mosa hogidare. better luck next both Mary and Margayya

Hogli yenaadru kodri Mohan….aake ashtu keLthidaare….

Iyyayo… innmale bariyode bittubidteene… jana sala kelakke shure madthare and gothirallia….

Namaskara narayan anta. 2006-07 INCOME TAX RETURN FORMS nodidra. Almost jataka kotta hagide dept officials kainalli.

Nimma abhipraya yenu. Is this development is good or bad.

Narayan sir, welcome to this site.

In fact P.Chidhambharam had made one great announcement saying every person has to mandatoraliy attach cash flow statement which is victimization of middle class people – after lots of protests,he has made it optional.

Even though they bring out many versions of the forms, one positive thing is NO ATTACHMENT IS MANDATORY. This means Form16, the basic document for salaired class is optional.

As you point out its evident that a common man just can not use those forms anymore. You will need assistance from a chartered accountant who would be carefull not to commit a mistake in filling the same.

There is a saying that death and taxes are the only certain things in life, we as Indians need to include this form as part of tax. In every country when there is move to make things simple, our Government allways works in reverse gear and make things complex.

Take singapore for example, the form is a simple 2 page with only salaried class attaching the Form 2A equal to our form 16. In fact there are counters even in rail stations, bus stands where people can just drop their returns ( including online) and smile away.

Thinking of filing returns in India gives one the shudders.

Dear Mohan Sir,

Thanks for yur message. Yes u r absolutely right in INDIA everything happens in the reverse gear and thanks for your advise on the filing of forms.

I have a distribution and a representation company and i do have a regular chartered accountant who takes care of my accounts.

What i wonder is where do we end. Normally the middle class and the common man is always affected. The rich always takes shelter either under muscle power and the money power. Yello ondu kade middle class matte common man ge tappu madtive anta guilt kadatte anta we pay tax properly and invariably the govt runs on our money more.

The rich becomes richer and they always escape from the clutches and they are a big tax evaders.

Even the limit of 1,10,000/- to a individual where is it sufficient. The rent is soaring high, so the cost of living in all metros.

Does not our FM understand these difficulties and target more of rich class where they have amassed more wealth instead of penalising a section of people who have more of hand to mouth exixtence.

The system prevailing provokes and instigates a common man to be corrupt and get into the act of cheating of tax evasion.

God Knows when things will be alright in INDIA

Once again thanks for your advise

Dear narayan,
Your words are exactly the frustration of the middle class.

Just look at our model – democracy. Even though it was intended for all good purposes, the way it functions is the root cause for this anamoly.

The rich get richer and poor get poorer. There is no way to break out of this vicious cycle.

Chidu knows these problems very well but the anarchic system we have prevents any kind of corrections – he would be out of recoking the minute he touches the rich class. So power and corruption go hand in hand.

You also have a rightly pointed that this is causing corruption.

Only one thing despite all these irregularities is to be honest and have only WHITE money. The reason is we have earned it hard way, any trial to evade the 33% tax bracket ( the higest for individual) means your entire 100% of money becomes BLACK and can not be accounted for in future – what a waste of hard earnings!!

You have many more industry related problems. Do share your thoughs and thanks for visiting.

Dear Mohan Sir,

Thanks for yur comments. While the gist from the letter talks about trying to be honest citizen and not to evade taxes.

I agree with you 100% and i am one.
I actually work in sectors such as aerospace and the wind energy. Esepecially the sectors which i work are also to prone to rampant corruption and nothing moves without this.

If i am in the bracket can have my existence if not i dont belong.

As yu know the corruption does not have any accountability or any official documentation.Organising this will be a herculean task for us.

What do yu suggest how do we manange this situation

have a wonderful day


i just wanted to ask whether HRA is included in the total tax free income which is 1,10,000 for male even if co. pays me separately

There are 2 questions here
a) Is HRA tax free – Absolutely Yes. When you file IT returns there are seperate columns for doing this and there is a ceieling for this too – dept may ask for tax receipts.

b) Implications of your employer paying house accomodation seperately – will be treated as Beneift and added to your main income and taxed at your bracket.

Hope it helps. Its not advisable to submit fake HR reciepts as this has been caught many times by IT department and company has terminated such employee services.

Personal loans are helpfull things in time, without that hunt for collatarals, guaruantors but this comes with a pinch of salt.

Dear Sir ,

I have a confusion that in the illustration of one ulip single premium i have seen that charges are deducted through deduction in units every month / year , now i have confusion that in long term i dont have units to redimmed but it is always advisable that in long term ulips are good i believe , but can you clarify . If possible through a illustration with units alloted & deducted per month / year . ?



Dear vinay,

ULIP’s wether single or mutliple premium come with huge costs. Following are some of the reasons:

1) The initial costs of the fund in terms of percentage of premiums deducted is un-necessarily high. For example a standard mutual fund ( equity) charges 2.25% load but a ULIP does it from 8% to 22%!!!!.

2) The administrative costs are another bane which is unwarantted.

3) ULIPS are not transparent. They only publish NAV, they do publish portfolio of investment etc which is the main point to switch between funds.

4) The best of the fund managers are employed by the mutual fund industry.

However, do not MIX up investment with insurance. If you wanted to do both, use a mutual fund and take a seperate term policy which will ensure you get adquate coverage and your investment also grows.

It is hypothetical that there would be no more units to redeem due to admin charges as you will not be allowed to withdraw units less than your actual committed years of the ULIP.


dear mohan,

i got a policy Aviva Life Long with 50-50 funds of balance and growth. so please tell me by sending email to me that in which fund should i switch to get a good return. my email address is and policy is in Aviva and funds are of 50% in Balance and 50% in Growth.

do tell me

with thanks and regards

Sandeep 94637-64978

Dear Sandeep,

Most probably you are referring to a ULIP where in they provide insurance and it is invested in 3 schems they run – one pure debt, one with debt and equity and one with pure equity.

The advice from experts have allways been – never mix investment with insurance.

Your requirements of insurance and investments vary over period of time.

ULIP’s are extremly expensive instruments. To answer the point if you switch to a pure equity – risks are high and great rewards of which major portion would be taken away by the insurance company, while a balanced option would just break even ultimately only providing you a very low insurance coverage. The debt portion would be lower but a safe option.

Kindly talk to a investment manager/ Portfolio manager to access your investment and insurance needs – dont fall for the agent/distributor talk.

hope this helps you.

Petroleum Products hike had been inevitable – some common questions araise regarding WHY suddenly this price hike, WHAT can we do about the same and HOW to do it.

The WHY portion has multiple answers like Demand V/s Supply of crude, The economy of USA v/s other growing nations, The speculation and trading of this commodity in this world.

Obviously the demand is increasing from growing economies like INDIA, CHINA but not to warrent such a steep hike of price from 50USD to 138 USD in a short span as USA wants everybody to believe. ON the supply side they are not hiking the production too. Definetly a small change of demand in terms of 3% to 4% in global demand can skew the ratings – so who can afford to hoard and buy so much fuel ? Your guess is as good as mine – the USA armed forces. All the wars have taught them to have a 3 months inventory which is silenty hike to 5 months today!!!

In this world economy a country is expected to print currency based on the amount of gold reserves it has in its chest. If the country goes beyond its capacity – deficit occurs. Our good old USA continues to print currency without backup for the same!! People wake up – this bubble of government backed securities is a thing of past. Closer to home the US64 unit holders are feeling the letting down of government after GOI mismanged the unit trust of india sucessfully and the investors got a -3% returns!!! The uncontrolled printing of US dollors is the main culprit.

Off course the last but not the least devil out here is commodity trading where in people quote to buy a commodity at a fixed rate in future – a facility originally intended to control price by assuring traders and buyers a constant supply of commodities is increasingly used for earning returns – so the rates increase.

If all these are out of our control then obvious questions is WHAT we can do about it.

Its high time we skipped this fossil fuel which will anyway dry up in estimated 50 years time approx. There should be more Government sponsered projects on alternative resources like wind, solar and nano technologies – We are sitting on a dynamite which could provide clean, cheap and continious power in that order. As individuals taking car pools, bycyling to short distances ( Which anyway doctor recommends after bypass!) using lesser electric hungry devices, turning down applicances when not in use – majorly the 5 star culture should be shunted out.

There is another classic myth that electric vehicles are the answer to all these issues. No folks, the REVA car ( i dont have anything personal against it) will need a change of battery every 3 years. Where does this eco damaging packages of lead, acid go please? The energy you and I use to charge these batteries come from coal being burnt in thermoenergy factories which generate power!! So all we do is just move the pollution to another geography please. As an asthmatic i welcome REVA!!! 🙂

Any other ideas / comments to enlighten is welcome!!


use public transport whereever it is good with introduction of volvo buses and airport going north way I know lot of people who regularly travel with minimum luggage for a short trips are using these buses really it has helped both and with these buses you travel comfortably and contribute for saving energy. yes only where it is inevitable with lot of luggage and big trips you have to for using own vehicle or hired vehicle. so like this we must use these public transport whereever possible and may be we will add few years more for fuel availablity. It eases trafffic congestion and helps a lot no hassel for searchig parking place etc.etc, it is high time we go in a big way for non conventional energy as indicated by mohan

Airport transfer made more affordable & comfortable. You can check this site. I heard that it is good,(though I have not used it personally)

Yes public transport to airport on volvo buses seem to be fine but its an insult to mankind the way human beings are squeezed in BMTC buses on day to day basis and gave a skip to this option. Definetly this is a major improvement if we can achieve it.

Thanks for that link too. My collegues indicate they are decent.

Mohan, Its been quite sometime you wrote anything here.
Why don’t you post something now? probably the way share markets are going down so randomly.. The time to buy , but till when??

Could you pls create a seperate page to start a new subject pls.

Dear Mohan Sir

Our company have its plant In MP at Indore and a transportar from Mp provinding service and raised bill against c form is this possible to raise bill of transportation charges as CST Instead of Service tax . May Indore raised c form for this or not.?

sir bill may be raised by service tax or VAT and may i Take its setof against out put tax


Dhirendra Singh

What is the difference between a Company and a Corporation?

I bookmarked this link . Thank you for good job !

Dear Sir,

A question: I have already invested money in different mutual funds which are supposed to have tax-free dividends, no entry fees or annual fees but which have top-up option. Now one bank is offering portfolio management services investing in mutual funds: equities, debt, liquid funds, gold funds. There are entry loads, annual fees etc and some small amount of tax (5%) to be paid. Is it worth it to go for a portfolio or to invest that money as top-up in the existing funds?



dear sir
i m doing mba from distance learning program
and i want to take finance as spacelization but i am not from finance background i did my graduation from B.Sc.math but i m find i m good in a no.
so sir give me suggestion i should take finance or not

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