A lot of you reply to the daily emails with suggestions for posts, and I really appreciate that because it gives me post ideas, and I can write about stuff that is most relevant to you.
Normally, I take the gist of your suggestion; create a title of the post, and note it down on a virtual sticky note. But, the issue with this is that it is easy enough to miss an email, and sometimes the titles on the sticky notes don’t make any sense to me when I look at them later on.
So, I am creating a page here that is specifically for your suggestions for posts. You can leave a comment here suggesting an idea for a post, and if I know enough about the topic I will write about it.
That way we won’t lose track of anything you say, and if multiple people suggest the same topic for a post then I know that it should be written prior to moving on to other things.
Thanks for reading – and writing!
I give one example here for long term capital gain (LTCG) calculation –
Let’s say, I booked an under construction apartment in Dec, 2006 by paying Rs. 1 lakh. I got the sale agreement a week later which laid down terms of payment as the costruction progresses. I kept paying cash year after year as per the agreement
Nov, 2007 – Rs. 4 lakh
Nov, 2008 – Rs. 3 lakh
Nov, 2009 – Rs. 2 lakh
Since the construction was taking longer than he promised and I was not satisfied with his quality of construction, I had asked for cancellation of my booking and refund of my entire money paid to him and compensate me for that. I made the request in Nov, 2010 and he finally paid 12 lakh in Nov, 2011. Now, let us say I want to calculate capital gain with indexation benefit (assuming it is LTCG).
Questions are –
Is it really a capital gain for me ? 🙂 If yes, is it short term or long term ?
What is the buy date and sell date for this complicated transaction considering the fact that the property was never registered to my name?
LTCG rule says the property has to be sold after 3 years from buy date ? Is it the case with me ?
Since the payment was made in different FY, can I use different indexation for all the corresponding years ?
Could the calcluation be different had I taken a loan ?
Can you please write a post on these type of practical and possible transactions ?
To the best of my knowledge , I have replied.
1. There is NO capital gain in this transaction as there is no transfer of capital asset. Somebody may argue that relinquishment of rights in a property also to be treated as transfer of capital asset. But I differ from them as the property is yet to be completed .
2. You need not worry about buy date and sell date because as I said there is NO capital gain involved and you yourself said property is yet to registered.
3. Even if you had taken home loan there is NO capital gain involved. Only Loss for you is whatever interest paid on pre-completion period has to be foregone without claiming any tax benefit because property is not completed and you have surrenderd the under construction property back to the promoter.
4. Difference of Rs.2 lacs can be treated as Compensation by promoter for not completing the p roperty as per agreed terms and this Rs.2 lacs can be treated as Income from other sources and tax has to be calculated on the total income including this Rs.2 lacs.
If anybody differ my views, Please clarify with proper explanation.
I was under impression that it is a captial gain. 🙂
Your reply is wonderful and logical. It makes sense. Thanks.
I’m afraid I can’t write a post on this and explain this because I’m not knowledgeable enough about tax to write about such intricate deals. Sorry.
Hi manshu,
can you give us an idea about top softwares which are helping a Person to invest in Equity.
I’m not aware of any I’m afraid.
Hi Arun
Perhaps I can. Can you please answer the following basic questions.
1. What type of software you want.
2. What sort of help you want using the software.
3. What is your knowledge about stock market.
4. Do you have any knowledge about technical analysis, charting tools etc.
5. Lastly, are you a new or an active trader in market. If active, since how long.
If you like, do add few words about you too (age, education etc,). I may add there is nothing like this, that a software will tell you to invest in a particular stock(s), it is only you who have to decide.
Dear Umesh,
i am an engineer , 24 yrs, just started my career in UAE .
am a student in stock market for last 3-4 months.
One Gentle men told me he is using a software to invest.
Though i felt its tough to penetrate into the finance field, i thought He may using certain software which works/predicts the stocks, by following any laws/theories .
I just know Elliot wave theory and the definition about support and resistance, dont know to calculate.
I just know the major division of listed companies but donno any major theories or prominent factors considered before buy/sell a stock, But Eager to know all…
For study I just started the virtual trade in Rediff money…
Then felt a lot need to understand which i dont know, and when heard of software helps in Investing, decided to seek the help of you guys .
Hi Arun
I don’t know what type of software, your friend is using. You may simply ask him and I hope he will oblige you.
In my opinion he might be using some charting software (CS) (.exe type), may be Amibroker (AB), MetaStock (MS), Ninja Trader (NJ), Advanced Get (AG) etc. etc. With the help of these CSs, one can do charting of stocks and can also analyse/scan data on RT (real time) and EOD (End of Day) basis. And on this basis one can watch/select stocks for investment/trade. These softwares are quite costly, ranging about 10,000 onwards. Beside this cost one has to pay for data also. As appetite of these software is quite much and they require their feed every second/minute and they will not yield anything new until you satiate their hunger. Just joking but true. But you have to subscribe for paid data and it will cost you something 500-1000 per month. These softwares are also available “for trial basis” and you should first go for a trial.
There are web based charting software also (Jawa type), normally embedded in charting websites and these are free to use. These charts are EOD and not RT and rarely you will find RT charts free of cost.
There are two types of analysis/studies. One is fundamental studies and other is technical studies. The fundamental study(ies) is done for the fundamentals of a stock and the company. How the company is performing and its profit and loss etc. etc. and many other things. Beside this any good or bad news (relevant to market) and financial position of ones country and the world also had role in the movement of stocks.
Technical study(ies) is done on the movement of stock(s). It is basically the study of technical indicators. There are many Technical Indicators (TIs) and one should do some study of them. Examples of some mportant TIs are Relative Strength Index (RSI), Stochastics, Bollinger Bands, Moving Average Convergence Divergence (MACD), Simple Moving Average (SMA), Exponential Moving Average (EMA). You will come across more of these TIs, once you start studying these indicators. One should also study chart patterns and candlesticks patterns.
For a basic and advanced study of technical analysis go through stockcharts, investopedia, moneycontrol etc etc. Moneycontrol is good for fundamental studies as well. Also go through websites of BSE and NSE. You need not go into advcanced study but should have more than basic knowledge.
Beside this there is Elliott wave (EW) theory, Gann theory etc. You said you have some knowledge of EW. Also get the knowledge of Pivot Point and Support and Resistance. Calculation of support/resistance is very easy and you can do it yourself or with the help of pivot point calculator.
You being an educated person, must be knowing that a software is a dead object and you have to feed your knowledge and skill in to it so as to get something out of it. Many time just clicking few button(s) is not sufficient.
Gaining knowledge is a slow and steady process. Just do not jump on to study everything. In the start everything will go over your head but slowly and slowly you will understand what you want. Read some books on technical analysis and method of trading. Joining some forums and blogs and reading comments etc for gaining knowledge will be a good idea.
One word of caution, investing/trading in stock market is very risky and only a few earns from this, mostly there are losers. Another word, one will also come across many person/consultant/websites about sureshot tips/advices to earn money, one should take the right decision oneself. In the last I wish to add that whatever I have mentioned above is only for educational purpose and I am not connected directly or indirectly with any website and/or software company.
Dear Umesh,
you gave me strong idea of basics and show me a path how to move further.
i will conc on TI’s and theories by making use of mentioned websites as its the basics rather than other stuffs.
Felt happy when i used a Pivot point calculator as its so simple than expected.
Thanks for guiding me to the right path.
Hi Arum
Thanks for your comments. It’s my pleasure that you find the post useful.
Those were some great points Umesh. Thanks.
Thanks for your reply.
Financial goals and planning: Do I really need it ?
Sounds absurd but read through my post…. This is my first post in a blog as I found Onemint a really practical and unbiased discussion forum. Please keep up the good work of spreading financial knowledge.
Before I start this post, I want to say this – I have a full time software job but I do have average understanding of different mutual funds, SIP, Equity, Debts, power of compounding, effect of inflation, tax efficient investing and “start saving early” concepts. I also do realize that we are in probably most uncertain period of time with very insecure jobs, global effect on economy and constant change of macro and micro economy. How do I ensure a better future for me and my family in such scenario ? Simple and easy answer – Start saving as much as you can through different asset class after carefully studying their risks/your priorities/diversification. I am already doing it.
Now, two points I want to bring here –
1. Why to set goals when I know that I am doing my best to save what I can. Whenever there is a need I simply will take out money. Only thing I have to take care is before say 2 years of my NEED, I will re-assess and re-align my portfolio to minimize risks and ensure liquidity. This way I will not loose my sleep thinking about say “I need 20 lakh money in 2017”. If I have the money at that time, I will achieve my goal. If not, I will have to forgo that need or borrow. Setting goals does not mean anything unless I have a new product or solution other than what I already know.
2. Do I really need to go to a financial planner ? With my current knowledge as described above, what is the other option a financial planner can give me ? Only for setting goals (like marriage, retirement planning, education, home etc.) – setting goal does not help me in any way when I am already investing in the best way I can through different asset class and tax efficient way ? Most financial planner just set goals and reiterate what we already know and then finally ends up selling products and never follows up? (That happended with a few of my friends.)
I want to conclude here by saying
1. Don’t get into hypertension/diabetes in your mid life by thinking too much on goals.
2. At the same time you have to be aware of basics of economy (You don’t have to be expert as that part can be left to paid fund manager for example) so that you can save in an efficient way and as much as you can. The mantra is “START SAVING EARLY AND REGULARLY IN ASSET CLASS YOU ARE COMFORTABLE IN”.
3. Maintain a lifestyle balancing between comfort and luxury so that you can be sure that you are not wasting any money. Know what you absolutely need and what you don’t need. Ultimately “A penny saved is a penny which can be invested.”
4. If you have internet, you can find financial information very easily. Financial education is not one time learning. You have to update yourself with major economic changes or new products and probably learn from your mistakes too. If you think a financial planner can give you all information in a 6 or 7 hour session without you having to invest time to learn yourself later, you are wrong. If you have come here in Onemint, and reading this post – I know that you already know basics of finance, you want to know more and you have the financial AWARENESS. So, happy investing.
Thanks for sharing your thoughts, and I appreciate your rationale and thoughts behind this. I think the foundation of good financial life lies in savings, and everything else depends on it, if you aren’t saving enough you can’t do anything with your money because you will always be busy paying credit card bills and worrying about the next EMI.
Hi Sir,
I am Rajeshwari from Bangalore I am receiving your mails its very useful and good also. Actually I want to ask one suggestion or the correct path i.e., I am married I want to save gold for my daughter for her future requirements. First I will tell my plan: that is I want purchase the gold from now onwards one or two grams monthly or two months once. If I purchase like this, is there any wealth Tax on gold coin purchasing? please tell me and is this the way is correct for gold saving?
Any other way is there for Gold saving? please suggest me, I don’t want to take risk also I want to save my money and Gold safely? I don’t want to get loss. So, please suggest me a correct path or way.
regards,
Rajeshwari E
You have not mentioned the time horizon of your requirement of gold but purchasing gold in small quantities is a good idea.
You can purchase/invest in gold in small quantities thro Gold ETF and eGold, as small as 1/2 in Gold ETF and 1 gram in eGold. For more details on eGold you can visit National Spot Exchange (NSEL) website http://www.nationalspotexchange.com
Manshu has written many post on Gold ETF and you can search in http://www.onemint.com/category/etf/
Manshu also wrote a post on eGold last January, you can go thro it.
http://www.onemint.com/2011/01/13/e-gold-and-e-silver-from-nsel/
I also posted a comment in this post on 13.10.11 about various option available for investment in gold.
Purchasing gold ETF and eGold is very much similar to purchasing shares. Please note that you have to pay some inherent cost and charges on all investment or gold purchase like brokerage and other govt. charges and various taxes, demat charges and VAT if converted to physical gold etc. etc.
Now a days there are many gold jewellery saving schemes by various established jewellers. You can go thro an article that appeared in MINT newspaper recently http://www.livemint.com/2012/04/12220457/Are-gold-jewellery-saving-sche.html
And you can have your own opinion about these schemes, whether they are worth or not.
Sir,
Please explain what is credit default swap in layman’s language.
Here is a post I did quite some time ago. You may find it useful. http://www.onemint.com/2008/10/15/what-is-a-credit-default-swap/
i have gone thru it..good one…
I have some queries
Who controls CDS?
This mechanism originated in which country?
The banks also insure the loan then how it is different from CDS?
Plz explain ….
I think these were invented in the US and for a lot of these instruments they are transacted between two parties over the counter so don’t have the kind of regulation that a share will have. They are instruments that can be bought and sold by anyone and not necessarily the people who actually take out the loan (which is the case for bank insurance) and that’s one marked difference, and second is that the market is a lot bigger.
Also, please use the post itself to ask questions so that others who land on their page can benefit from your questions as well.
It would suggest you to write some articles on basics, do & don’t & strategies in Option Trading.
how do the companies manage their cash in their business. it is required for my project work
What you should do is Google up how companies manage working capital, capex, and expansion that will help you get material for your project work.
tell me the idea about cash management in various companies
What does that mean? Cash management in various companies? What exactly are you after and what will you use this information for?
cash management in shriram city
How to calculate the CAGR for a SIP investment?
I have already written about that topic, you can find that post here:
http://www.onemint.com/2011/05/15/how-to-calculate-returns-from-a-sip-systematic-investment-plan/
What is diff between and EPS and EPF and share more details about EPFO. Thanks in advance.
-Raju
Any interest earned in NRE account is not taxable in India , but is taxable in USA
Where as any interest earned in NRO accounti s taxable in India, hence not taxed again in USA.
1. Now lets say if someone invested their NRO account funds in fixed maturity plans indexed to inflation rate, and did nt have to pay any tax since inflation rate turns out to be more than the interest rate on FMP. Now in this kind of a scenario is the interest income coming from an FMP account, is it taxable in USA ?
2. If someone moves their Indian money i.e. money origination from India into NRO account, and earns interest, should that income be shown in USA ?
3. In an NRO account one can move their Indian money as well as transfer money from USA into the same NRO acccount. What are the tax implication on such account in INDIA AND USA ?
I’m afraid I don’t know the answer to any of these questions. Sorry.
How the mutual funds handle the dividends that they receive from the stocks they own in the portifolio.
For example: HDFC top 200 (G) has 8.53% of the funds Invested in SBI. In 2011 SBI has given 300% of dividend. Since the fund is earning tax free income from the company, what they will be doing with the dividend income?
As far as I know there is no limitation on how they use the cash, they are free to reinvest in SBI, buy another stock, keep it for redemption or pay out as dividends. But if your question is whether this dividend income ultimately comes to the unit holders then yes, it absolutely does come to the unit holders one way or another.
hi Manshu,
can u write on ICICI child plan,Smartkid premier.
I don’t know much about it but let me see if I can hunt some details and write about it.