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From the Rat Race to Financial Freedom... A common man's journey
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Happiness Unlimited...How to be happy..always !!
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Dream On...Every setback is a little nudge from HIM to Dream On
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The Autobiography Of A Stock
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Manoj Arora    About Me
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Wednesday, February 26, 2014

Be polite to yourself

Being harsh with anyone does not help the other person transform to the level we expect.
This is equally, if not more, applicable to how we treat ourselves in our mind and in our thoughts. Every single thought matters...read on...

Sunday, February 23, 2014

Voluntary Provident Fund (VPF)

For risk-averse investors who want to invest for their retirement, Public Provident Fund (PPF) seems to be a good choice. But considering there is a limit on the maximum amount that you can deposit in your PPF account every year, and that inflation will certainly undo part of your wealth creation effort, you need other options to augment your savings...Read on...

Who can heal me?

Who is a healer? I always thought that it may be a doctor, a guru, a saint, a master, a counselor, a parent, guide or friend - someone who has an expertise in his or her area of work, someone outside me whom i can approach and get benefited, someone who can help me relieve myself of the pain or hurt that i am currently in. Everything changed as i turned the table around and looked inside.

Tuesday, February 18, 2014

Unrelenting Conviction in Your Abilities

Unrelenting faith and conviction in one's own abilities, and the supreme authority of God is a wonderful ingredient to inner happiness. In fact, this is one of the key ingredients to success in life, in a way most of us understand it. But we must understand what "unrelenting faith" actually implies. It is definitely different from "faith" that most of us know. 
I love the below example of unrelenting faith, which always gives me the self confidence to move on in life.
This example is from Indian mythology. Most of us might know the story, but try and focus on the unrelenting conviction demonstrated by Angada.

Angada, in the Indian Ramayana context, was a vanara who helped Rama find his wife Sita and fight her abductor, Ravana. In his efforts to seek a peaceful solution, Rama sent several messengers to Ravana, and Angada was one of them. Angada explained to Ravana that Rama had sent him as messenger to seek the release of Sita and that Ravana ought to heed this last appeal so that war could be averted. Angada tried every means to convince Ravana, but the ruler was dogged and firm to face a battle instead of returning Sita to Rama peacefully. 

At Ravana's court, after Angada explained the divinity of lord Rama and the message he carried, Ravana paid no heed to it. Angada then planted his foot firmly on the ground and challenged anybody in the courtroom to uproot his foot. If anybody were to accept the challenge and was successful, Rama would concede defeat and return without Sita. 

All the rakshasa commanders of Ravana's army and even his son Indrajit tried to lift Angada's leg but none succeeded. Feeling humiliated by this failure, an infuriated and powerful Ravana slowly walked towards Angada's planted foot and just as he was about to hold Angada's leg to attempt the challenge, Angada moved away and Ravana fell down. Angada explained that the challenge was for Ravana's commanders and not for Ravana. He told that Ravana was prepared to fall on his feet but instead he should choose to fall on the lord Rama's feet, for those are the ones that remove fear of cycle of life & death. .

At a later point in time, someone asked Angada that how could he make such a commitment on behalf of Shri Rama, and how could he be so confident that no one can lift his feet. 

"What if someone in Ravana's darbar actually was able to displace your feet" asked a stranger.
"How can anyone?" said a confident Angada.
"The foot that i had stay put was in remembrance of my lord - Shri Rama, so how can anyone even come even close to displacing it?", he continued.

Look at his faith in Lord Rama. The key is this faith.

"What if Ravana had moved your feet?" asked the stranger.
"That was pre-planned. I would never have allowed Ravana to even get a grasp of my feet, forget about moving it." remarked Angada

They key message that i always get from this story is the unrelenting, relentless, ruthless faith that Angada had on the power of Shri Rama's name. 

Now, don't just read the story and flip it over. Try and connect this story to your lives. Do we have the same confidence in our own self and our own abilities? Or we keep doubting our abilities in the wake of adverse situations. 
Our boss fires us, and we start doubting whether we have the capability to perform the new role. 
We get an intuition to chase our dreams, but sooner than we can imagine, we come up with enough reasons to doubt our own abilities, and build enough walls around us not to chase our true calling in life.

Each one of us can be a Angada for our own lives, and have the same unwavering confidence in our own abilities. You are destined to reach where you "think" you can. Knock down the walls around you, that you have only created, and let the inner self take over the charge of your life. You are destined to be a super hero, if only, you can have the same unrelenting faith in your own abilities, as much as Angada had on Shri Rama.

"Always be yourself, express yourself, have faith in yourself, do not look for reasons on why it cannot be done, find ways on how it can be done."

Read more about chasing your dreams and how happiness is linked to it.
Chapter 6.13 ~ Challenge Your Beliefs - Happiness Unlimited (the book) - Launching April 2014.


Cheers


Manoj Arora
You are entitled to happiness unlimited !!

Sunday, February 16, 2014

Tax Saving under Sec 80EE for first time home buyers

First time individual home-buyers can get tax deduction on interest of home loan, under newly inserted section 80EE of the Income Tax Act, applicable for assessment year 2014-15. This is in addition to tax rebate on interest payment of home loan, under section 24.

Eligibility for rebate under Section 80EE
This rebate on home loan interest is applicable only for home loans satisfying the following conditions:
  • Loan is sanctioned by a financial institution or housing finance company between 1st April 2013 and 31st March 2014.
  • Loan is sanctioned for acquisition of the residential house property.
  • Loan amount is Rs. 25 lakhs or less
  • Cost of residential house is Rs. 40 lakhs or less. 
  • This should be the only house owned by the taxpayer at the time of sanction.

Maximum deduction limit under Section 80EE
  • A maximum of up to Rs. 1 lakh can be claimed towards interest payable on home loan in the financial year 2013-14. 
  • If interest payable in this year is less than Rs. 1 lakh then the balance can be claimed in the following year.
Illustrative Example
  • Let us assume that the total Interest payable for this home loan (over and above the interest under Sec 24) : Rs. 1,00,000/-
  • If interest payable in FY 2013-14 is Rs. 65,000 then tax rebate on remaining Rs. 35,000 can be claimed in FY 2014-15.
Other important notings:
  • The amount claimed under Section 80EE cannot be claimed for tax rebate under any other sections in any year.

For the purposes of Section 80EE:
  • "Financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies including any bank or banking institution referred to in section 51 of that Act or a housing finance company;
  • "Housing finance company" means a public company formed or registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes.
Conclusion
It is an amazing opportunity if you are looking for a house in a Type B city for your own residence, since it can save you lot of income tax for you. For the beginners who are just starting off their financial lives, it is a very good start.
Cheers


Manoj Arora
Freedom can buy you what money cannot !!

Thursday, February 13, 2014

Blame the floor or the table

This government is useless, my spouse did not wake me up in the morning, my boss does not understand what i am going through, my company should not have sold that business unit, the shopkeeper should have talked nicely, the movie could have been directed better, and on and on and on.....the blame game never ends, and we take it so casually, as an inherent part of our life. We even tend to ignore (at our own peril) what such a discussion (even if it is happening in our mind) is doing to us, and our own destiny is being shaped every moment.

Sunday, February 09, 2014

Identify and live your core values

You have been blessed with some inherent core values as a part and parcel of your taking birth. Truth, Honesty, Discipline, Helping others, contribution of your value add...whatever be it..you must spend time analyzing what your core values are, and then strive to live by your values. It is important to identify them, because these values show you the much needed direction in life.
Your core values should determine your mission in life, because if your mission (which ultimately determines your actions in day to day life) are driven by your own core values, nothing else can keep you happier. You are poised to live a stress free, happy life.

Do not get into a profession which goes against your core values, even if the remuneration seems handsome in the beginning. I know of a friend who became a lawyer out of the fact that everyone in his family was a lawyer, and therefore it made lot of sense and synergy to build his profession in the same area.

He was never happy, because very soon he realized that honesty was his core value, and it is difficult to keep himself happy at the core even if he succeeds professionally in the law field. I, myself, went into a profession which required marketing of Electrical switchgear with one of the largest electrical switchgear companies in India. It seemed such an obvious choice because i was getting the best company through campus and i was an electrical engineer. I never thought og checking what marketing of electrical switchgear would actually entail and whether i am shaped in a way to do the same.

Very soon, i realized that my inner core circuit was not aligned to marketing, sales, outstanding payments collection, camping at the client premises etc, and i was doing this just for earning money. I was fortunate to have been able to grab an opportunity to change my direction to do something that was more aligned to my core values. As i get to know myself deeper, i am further aligning my direction of life in sync with my core values. It seems an ongoing process which is moving forward as i get to know more about myself.

It takes time to understand yourself and your core values. You need to take a pause, stop and think, spend time with yourself, look at your inherent value base and then compare it with what you do for the most part of your life. If these two are not aligned, you need to change the latter. Changing your values can be a tough ask, but changing your career or goals and bringing them in sync with your values is what you can definitely attempt to do.

Here is the best part of living your core values. When you are living and working as per your core values, you don't need to please anyone to feel happy. Just the act of what you are doing will give you enough happiness, not to desire anything from outside. What can be more satisfying than that. You will never feel lack of willpower, confidence and courage to tread your own path when it is directed by your value system. Going against the direction shown by your values is like walking against the gust of wind. You will soon get tired, exhausted and worn out, even without covering enough distance.

Come in harmony with your core values, and lead a simpler, happier life.


Read more about your core values and how your everyday happiness is linked to it.
Chapter 6.11 ~ Inculcate and live your core values - Happiness Unlimited (the book)


Cheers


Manoj Arora
You are entitled to happiness unlimited !!

HRA and Rent Benefit under Section 80 GG

In the last post, we studied about the tax implications of HRA under Section 10. But this section is applicable only if the individual qualifies for HRA as per the company policies. But what if your employer does not give you HRA or you are self employed? In that case, Section 10 is not applicable for you. You can still save taxes using Section 80GG of the IT Act.

Conditions of applicability for Section 80 GG
For you to be applicable to save rent under Section 80GG, the following conditions must be satisfied:
  • The Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10
  • You should not own any residential house at any place of your employment or business,
  • You should not own a house at any other place which is claimed as self-occupied house. So, if you work in Mumbai and claimed tax benefits for a self-occupied house in Pune, you will not qualify for deduction under Section 80 GG
  • The Individual files the declaration in Form No. 10BA.

Rent Deduction Calculation under Section 80GG
The amount which you can claim under Section 80 GG will be the least amount of the following options.
  • Rent paid minus 10 percent the adjusted total income.
  • Rs 2,000 per month.
  • 25 percent of the adjusted total income. 

What is Adjusted Total Income?
Adjusted total income here means your total income after allowing all deductions under Section 80, apart form Section 80 GG. But, it includes short-term capital gain tax and long-term capital gain tax

Illustration
Assumptions:
Your adjusted total income : Rs 10 lakh
Rent paid : Rs 10,000 a month, that is Rs 1.20 lakh for a year.

Option 1:
Subtract 10 percent of your adjusted total income from the rent paid
Rs 120,000 – 10% of 10 lakh = Rs 20,000.
Option 2:
Here you pay Rs 2,000 per month, that is Rs 24,000 per year.
Option 3:
25 percent of adjusted total income, that is Rs 2.5 lakh.

So, in this case, you will be able to claim a deduction of Rs 20,000 as per Section 80 GG, since that’s the least amount among the three options.

Conclusion:
It has been generally observed that most people who qualify under section 80GG, usually fall under the Rs.2000 per month deduction amount category. To claim this deduction you will need to fill the form 10 BA. 

Cheers


Manoj Arora
Freedom can buy you what money cannot !!

Wednesday, February 05, 2014

Presence of mind originates in stability

Are you a victim of a competition of any kind? The day you are born to the day you exist on this planet, competition seems to be omnipresent. It is more than handful to learn how to handle competition.

Our life has become like a fighter in a battlefield, fighting against this ever increasing competitive world, including the competition for big ticket items money, time, speed, status, performance, kids, gadgets, to smaller things in life like who is appreciated and who is not, who gets more raise .. Everything else that you can think of, can be competed by someone else.

What is that we need to win in this competition? What is your take?
Sound Management, Knowledge, Will power, Sincere Efforts, Hard work, Consistency, Skill, Technique....is there anything else that will help us stay ahead of the competition?
In spite of possessing all the above traits, are we able to beat the competition and lead a happier, contended, peaceful and a happy life? Does not look like to me. I have personally seen people breaking down or going into depression and taking undue stress inspite of being the best in one or more of the above attributes.

There is a famous story about an Indian and an American going through a jungle. Midway in the jungle, suddenly, they hear a cheetah, and from the voice, it was clear that cheetah has detected them and is on its way for an easy supper tonight. The Indian immediately gets into action as the American watches nervously. The Indian takes off his jungle shoes and wears his running shoes. 

The American is puzzled. He did not even bring his running shoes. But out of sheer frustration, he asks the Indian 
"What do you think of yourself? Even if you are trained by Usain Bolt, do you think you can run faster than the fastest animal on this planet?" 

The Indian was quick to respond. "No, i don't think so."
 

Seeing death in front, and more so that the Indian is so relaxed in his approach, the American got even more frustrated and responded back "Then why are you wearing these sports shoes?"

The Indian, without wasting any further time, responded 

"I don't think i can run faster than the cheetah, and i don't even need to. I just need to run faster than you. Cheetah will feast itself with the one who lags behind. So, the competition is between you and me, and not with the Cheetah"

Many of you may have heard of this story earlier, but what does this story tell us about competition. One, of course, is that competition exists in every sphere of life. The second, and the more important message this gives us is that what we need in a competitive world is a great presence of mind, and all other things like Technology, Management, Knowledge, Will power, Sincere Efforts, Hard work, Consistency, Skill, Technique, though important, are all secondary. The Indian ran way far ahead of the American even with ordinary running shoes, while the American became an easy feast in spite of possessing all other skills.

This was a typical situation when there was no turning back when you started running. They had no choice, They had to run forward. There was no turning back. 


Isn't our life the same? Life is also a situation where there is no turning back. You got to move forward, and to be able to successfully do that, you need to have a great presence of mind. 

The phrase "presence of mind" in itself worth thinking about. Quite interesting phrase, isn't it? I mean, the mind is always present or does it venture out somewhere else often? Perhaps it reflects on the application of mind to the given situation at hand. This sounds more reasonable. To be able to apply your mind at a given situation and stay focused on the situation till you have a solution is an art. 

This situation is quite like trying to put a thread inside a needle hole, while you are running. Can you do it? You can, if you stop running, relax, ease off, take a deep breath, focus, concentrate - and it does not take more than a second after that. But if you keep running, you can try doing it for the entire day.You will only end up frustrated.

Precisely the same way, "presence of mind" or application of mind to handle a specific situation is best achieved when your mind is "stable" and "happy". Happiness, as defined in the book "Happiness Unlimited" is nothing but a stable state of mind. All the skill, talent, technology can be beaten by a great presence of stability in the mind. Unfortunately, this attribute is not taught anywhere in a school, college or a coaching institute. It comes to you from inside, when you have trained your mind to be stable. It needs years of practice under adverse conditions, and you ought to learn many techniques as highlighted in the book "Happiness Unlimited."

A great presence of mind enables right decision making when challenges knock at the door, and these challenges can then be easily converted to opportunities. For an unstable and unhappy mind, these challenges can break you down, and since there is no U Turn in life, the damage can be permanent.


Cheers


Manoj Arora
You are entitled to happiness unlimited !!


Monday, February 03, 2014

Where is the compass of your life?

Do you have the compass of your life with you? or you are being hit by situations and driven by life? Having a mission of life can set you in the right direction, and, trust me, life will never be the same again.

Christopher Columbus was an Italian explorer, navigator, and colonizer, born in the Republic of Genoa (Italy). He completed four voyages across the Atlantic Ocean that ultimately led to the discovery of the American continents. Those voyages, and his efforts to establish permanent settlements on the island of Hispaniola, initiated the Spanish colonization of the New World.

But for some of you who have just forgotten this as a history lesson, let me list down a few challenges that the great Columbus faced:
  • He did not have any map of the globe or the route that he was planning to take. He was moving to the unknown, undiscovered.
  • He had no clue of the kind of weather and storms that he would have to face in the sea. He was not prepared.
  • He had no clue of the marine animals that would challenge him on the way.
  • He had no technical expertise about the undercurrents that run in the sea.
  • His ships frequently ran out of food and water in the middle of journeys. He could never plan enough.
  • Mutiny was a big problem that was faced by many explorers of his time. Often, when tempers were running high and morale low, the crew of a ship would revolt and take over the ship. Columbus's discovery of the Americas was nearly jeopardized by a mutiny, just days before the ship came across land.
  • Expeditions were expensive, and they required funding from Europe's richest people.
  • Food and hygiene was a big challenge. He ate biscuit which was a powder swarming with worms, which smelled of rats. They also ate sawdust from the boards.
  • They ran huge risks of contracting scurvy, caused by lack of vitamin C found in fresh fruits and vegetables.
  • Natural challenges like lack of wind-if the sea was too calm, the boats would not have been able to progress. Of course, there were other weather challenges (storms, rain, etc.)

In spite of all these challenges, constraints and shortcomings, he had one key thing with him that kept him going : a compass.
A compass which could guide him to the direction in which he was moving. And history will validate that he was pretty successful in his discovery.

Your and my life in this yuga (Kalyuga) is an age of extreme uncertainty, in similar lines what Columbus faced before and during his voyages. We do not know what is going to happen in the next 1 hour.  We are also marching forward towards an unknown and unpredictable future. We do not have a definite map or a plan of our life, but we are already on this journey.
We have no clue of the challenges we will face in future. And, that's why, we are not even prepared to face those adversities.
We have no clue of what undercurrents are going on inside us. Undercurrents of our vices, weaknesses - we have no idea what those weaknesses are, and how to prepare ourselves to tackle them. These internal weaknesses are very much capable of drifting us away from our intended goals.
Worst, we do not even have a compass which can at least keep guiding, so that we can be aware whether we are moving in the right direction or not.
Today, we are not directing our lives. Instead, the life and its situations are directing us. Worst, our direction is constantly getting changed depending on the circumstances and situations around us, because we ourselves do not know what the right direction is.

So, with all this, who will show us the direction. Many times, i have heard people saying that it is God who is helping us move in the right direction. The moment someone says that, the very next moment there is a level of uncertainty about the existence of God and the right identification of God itself. So, let me ask you : Who is God? Christ, Rama, Allah, Krishna ?? How many of us really understand who is God.
If we do not understand God, then how can that unknown force be our compass in life? It cannot be. 
If not God, then who / what is our Compass?

In these times, what comes to our rescue is a clear identification of our mission on this planet. Are we here just to survive for 80-100 years? Thats it. Is that the only purpose of our existence? No. It has to be more value adding than this. 
We got to find a mission in our life, and start moving in the direction that our mission shows us. Our mission will be our compass in life. It will show us the right direction. When we have a definite mission, it becomes easier to take decisions in day to day life and continue to move in the direction of our mission. 
There are various scientific and well proven techniques to find out our mission in life, and it all starts with what makes you feel happy. Remember that a mission is very different from goals and dreams. It answers the "why" of your life, just like Columbus was clear about the "why" of his journey and his compass kept showing him the direction towards his why, and he achieved it in spite of all the challenges.

Write back to me at 'help@happinessunlimited.co.in' and i can help you explain the difference between a mission, goals, dreams, plan, and how to go about setting these in your life.

Finding your mission can be the best investment you would ever do.

Cheers


Manoj Arora
You are entitled to happiness unlimited !!

Sunday, February 02, 2014

House Rent Allowance (HRA) Entitlement under Section 10

In the absence of sufficient knowledge of key tax exemption opportunities like House rent allowance (HRA), we may end up losing out on valuable saving and investing opportunities. So, let us learn about HRA and how it helps us get tax exemption.


What is House Rent Allowance (HRA)
House Rent Allowance is an allowance given by an employer to an employee. The sole purpose of this is to meet the cost of renting a home.

Are you eligible to claim HRA?
You can claim HRA under Section 10 if you fulfill these three conditions:  
  • You have an HRA allowance as part of your salary package.
  • You are staying in a rented accommodation and paying rent for it. 
  • The rent exceeds 10% of your salary. 
What about rent paid to parents / spouse?
  • You can claim rent given to your parents. Let's say you live with parents and pay them rent. This makes your parents the landlords. One of them will have to declare it in his/ her personal income tax return to prevent litigation in the future.
  • You cannot claim rent paid to spouse. The relationship between a husband and wife is not commercial in nature; a husband and wife are supposed to stay together. So payment of rent to a spouse will not be accepted by the income tax authorities.
Rent Receipts
You will need to keep all your rent receipts since it is the only proof that you are paying rent. HRA exemptions are only available on submission of rent receipts or the rent agreement. However, if the HRA is up to Rs 3,000 per month, then receipts/ agreement is not mandatory. It is only when your HRA exceeds this amount that you will have to keep the receipts.
But it is wise to still keep them because, at the time of assessment, the Income Tax Officer may demand the receipts/ agreement.

Entitlement of HRA
The actual HRA you will be entitled to will be the least of the following:
  • The actual amount of HRA received.
  • 40% of salary. This increases to 50% if you are renting out the house in Delhi, Mumbai, Chennai or Kolkata.
  • Rent paid minus 10% of salary (basic component + dearness allowance)
An illustrative example
Assumptions
HRA per month = Rs 18,000
Basic monthly salary = Rs 40,000
Dearness Allowance = Nil
Monthly rent = Rs 15,000 
Rental accommodation is in Delhi.

Exemption Calculation
Case 1 : Actual amount of HRA = Rs 18,000
Case 2 : 50% of salary(40% if not residing in 4 metros) = 50% x (40,000 + 0) = Rs 20,000
Case 3 : Actual rent paid - 10% of salary = Rs 15,000 - [10% of (40,000 + 0)] = 15,000 - 4,000 = Rs 11,000

Rs 11,000 being the least of the three amounts will be the exemption from HRA. The balance HRA of Rs 7,000 (18,000-Rs 11,000) is taxable.

What if your employer does not give HRA or you are self employed?
HRA is an exemption under section 10(13A) of the Income Tax Act, and this applies to you provided certain conditions are met, as we discussed above. One such condition was that your employer actually gives you a house rent allowance. But what if you are an employee, but your employer does not give you an HRA or if you are self-employed? In such a case, you certainly won’t qualify for an HRA exemption under Section 10

But, there’s another section in the Indian Income Tax Act, called Section 80 GG, which comes to your rescue. Of course, you won’t get an HRA exemption, but you could qualify for a deduction for the rent paid by you. Not many people are aware of this deduction. Again, you need to qualify based on certain conditions.

We will study more about Section 80GG in our next post.


Cheers


Manoj Arora
Freedom can buy you what money cannot !!