Showing posts from May, 2014

An interesting video - One Idiot

I found this video in another blog and found its quite interesting even though I knew the concept or the underlying message of the video, I liked the way its presented. Its little long around (33 minutes) but worth the time specifically who think investing or planning for money is not a cool thing. A good introduction to the world of investment and personal finance, it may change your prospective.

If you really like it, you can check another three videos here but not this long, 3-5 minute ;)

How our goverment gives undue incentive to home buyers

In last two posts(1 and 2) I wrote about our love for house and its consequences for the economy, but you are not the only culprit. You are conspired to fall in that trap by the number of undue incentives provided by the government or tax authority of India. The nexus of real estate industry and law makers are hand in glove to incentivize the whole process to turn the most part of surplus income to real estate.

First, you get a tax exemption on the 1st house(where you leave in) for the interest on the loan to the tune of Rs 1,50,000 per year. We don't get such exemption in any other loan except education. The argument can be to help people buy their home, check the next point. In all loans we pay interest which is the income for the bank which is also taxed, so we should get tax exemption on all loan interest or the exemption should be abolished for all loans(except education loan which I feel is justifiable). We can argue even a car or fridge or personal emergency(personal loan)…

How your dream house is contributing to the National Black Economy

In continuation of my last post I want to emphasize how your love for that home contributes to the National Black Economy(NBE). This is just like bribe, everyone hates it, against it but silently pay and get things done when their turn comes.

When you see a good house, you purchase even though the seller demands a portion of the money in black(unaccounted/cash), this contributes to the NBE. Then you register the house at lower price, save few bucks in stamp duty and bribe the register office fellows. Then the income from the house property(like rent) you don't add to the income fully. So just imagine how much a single real estate transaction contributes to the NBE and we just blame the politicians and bureaucrats for black money.

You think it doesn't bother you but the same black money affects you only, you only pay for it - When you pay a portion of the house price in black, you are providing a cushion for the price fall. Say you bought a house at 40L by paying 20L as black …