HOW HINDU SUCCESSION LAW APPLIES IF WRITTEN WILL IS MISSING

Have you ever thought what happens when a person dies without a written WILL ? I know you might have never thought about it because you are not aware how ugly it gets when will is missing. Money is so powerful that relations don’t take time to break. Family members can really fight over the issue of who gets how much out of the wealth and a lot of times unexpected things happen. Even people you never thought can suddenly appear claiming their share in the wealth.

A proper written will (and registered one) is the best way to make sure the wealth is passed on to different people as desired. But in reality people don’t write will and keep thinking “one day, I will surely write a will when ..” .

So now coming back to the point, if a will is written, then there is no confusion and the wealth is divided as per the WILL . However if a WILL is missing, then the wealth is divided as per Hindu succession Act 1956 laws for Hindu’s , Jain’s and Sikh’s. We have separate law for Muslims and Christians, but for this article sake, lets just talk about Hindu succession Act applicable for Hindu population.  Also note that in this article mainly we are talking about the succession laws related to what happened after death of a MALE (not female) .

Concept of Legal Heirs

Legal heirs are well defined in the Hindu Succession Act 1956 . All the relations are categorised into two classes called class I and class II. The first right on wealth is of Class I heirs. Only if there is no one available in Class I, then relations under Class II can claim their rights. If Class I & Class II both are missing , in then there is something called Agnates and Cognates , but we will talk about it in sometime. For now lets understand Class I & Class II heirs.

Class I relations 

·         Son/Daughter

·         Widow

·         Mother

·         Son/Daughter of a pre-deceased son (per-deceased means “already Dead”)

·         Son/Daughter of a pre-deceased Daughter

·         Widow of a pre-deceased son

·         Son/Daughter of a pre-deceased son of a pre-deceased son (3 levels)

·         Widow of a pre-deceased son of a predeceased son

Class II relations 

·         Father

·         Brother/Sister

·         Son’s daughter’s son/daughter,

·         Daughter’s son’s son/daughter

·         Daughter’s daughter’s son/daughter

·         Sibling son/daughter

·         Father’s Parents

·         Father’s widow

·         Brother’s widow

·         Father’s sibling

·         Mother’s parents

·         Mother’s sibling

If Class I & Class II is missing ?

In the absence of heirs of Class I and Class II, the property is passed to the agnates and cognates of the deceased in succession. Now, one person is said to be the agnate, if he/she is related by blood or adoption wholly through the males chain line. Similarly, one person is said to be the cognate of the other if the two of them are related by blood or adoption, but not totally through males, i.e. there has to be some intervention by a female ancestor somewhere. The first preference is given to Agnates and only if there is no Agnate, then the Cognates comes into picture. To understand Agnate/Congate in plain plain Hindi, Its means “Bahut Door ke Ristedaar”, Agnates are “Door ke Rishtedar” from the chain of Male line and Cognates are “door ke rishtedar” , but does not compulsory from the chain of males in the family. But leave this point as of now, I think from understanding point of view just Class I and Class II is enough for someone.

Note that if there are more than one Widow’s , then they get one share only and then divide it between themselves and a person immediate family will also be considered as one unit only.

Some Important Rules and Points

·         A child in womb is treated as a separate child as if he/she was out in the world , He/she gets separate share in the property.

·         No succession rights if the widow has remarried on the date of succession.

·         If a person has killed the person from whom he was suppose to acquire the wealth and has been declared as murderer by law , then he looses his right of acquiring assets.

·         If there is no heir qualified to succeed to his or her property in accordance with the provisions of this Act, such property shall go to the Government.

For Muslims , the succession laws are defined under The Shariat Act . Under that 50% of the property goes to the Widow irrespective of the number of other legal heirs (remember in case of Hindu law its equal share between Widow and children) and rest is shared in equal parts between children

Some Examples

Now based on the learning’s we had till now, lets see 6 examples (not real) and how the wealth will be divided in each of those cases. I have tried to take different scenario’s.

Example 1

Lets say Ajay is dead without a will and he has 5 people in his family

·        Wife

·        Two son

·        One daughter

·        Father

In that case his wife, 2 son and 1 daughter will come under Class I , but his father will come under Class II , in that case all the 4 people under class I will get equal share in his wealth. So Wife will get 25% of the wealth, First son will get 25% , second son will get 25% and daughter will also get 25% of the wealth (married or unmarried) .

Example 2

Lets say Robert was 60 yrs old. He dies in an accident and has no WILL . Suppose he has following people in his family

·        Wife

·        Widow of his dead son

·        2 Children of his Dead son

This is an interesting case , in this there are mainly 2 units . The first one is his Wife who will get 50% of his wealth and the next unit is the Widow and 2 son of his dead son who will equally get 50% of the wealth and legally, they all need to share it in equal amount . Note that this happens considering as if the son was alive, in which case he would have got 50% share and then his family chain would claim it from him. So understand that each family here would be 1 unit and all the members of that unit will again share it back between them with same principles.

Example 3 

Suppose Ajay is dead without a WILL , but his family consists of

·        A pregnant Wife

·        Mother

·        Brother

In this case , there are 3 entities in the Class I , those are Wife , Mother and the Child in the Womb, here 1/3rd wealth goes to Wife , 1/3rd goes to the unborn child and 1/3rd goes to Mother. Note that a child in the womb has same right as a born child.

Example 4 

Suppose Robert dies without a WILL and leaves behind

·        Father

·        Brother

·        2 children of his sister (sister is dead)

In this case, you can see that Class I has no member, all the members are from class II , in which case Father will get 1/3rd wealth, Brother will get 1/3rd part and his sister’s children will get 1/3rd and will divide it between them in equal parts.

Example 5 

Ajay dies without a WILL , his family consists

·        Mother

·        Brother

·        2 Sister’s

·        Widow of one of his dead Brother

Here you can see that only one person belong’s to class I (mother) and every one else is in Class II , hence 100% of the property goes to Mother (remember that Class II gets anything only if there is no one in class I)

Example 6

Ajay acquires a ancestral house from his Father in Pune and has his personal savings in Bank FD and one flat in Mumbai which he had bought from his own funds. Now Ajay dies, but he was smart and he has written a WILL and written that everything goes to his Wife and no one else gets anything. Suppose his family has

·        Wife

·        Mother

·        Brother

·        Sister

Now what happens in this case ? In this case, his Bank FD and his flat in Mumbai will 100% go to his Wife and no one else, However his ancestral house in Pune will be divided equally between all the 4 members. This is because there was a flaw in the WILL . An ancestral property can not be passed on through a WILL . Ajay had made a mistake thinking that he can assign the flat in Pune to anyone he wants . A person can only pass on his wealth through WILL if he has earned it (think bournville) , if you have acquired it from your older generation, then it will be claimed by all the legal heirs of the person who is dead, and in this case both Mother and Wife belong to Class I, so they both get 50% share in the ancestral property in Mumbai.

Succession Law in case of a Female death

Till now we saw all the rules which are applicable if a person in question was a dead male , but in case of a female some points are a little different.  The property of a female Hindu dying without WILL shall be distributed according to the rules set out as following -

1. Firstly, upon the sons and daughters (including the children of any pre-deceased son or daughter) and the husband;
2. Secondly, upon the heirs of the husband ;
3. Thirdly, upon the mother and father;
4. Fourthly, upon the heirs of the father; and
5. Lastly, upon the heirs of the mother .

Important Points in case of Women Property

·         If the women has acquired any property from his Father or Mother, in that case the first right will be of the heirs of her father and not husband, in case of absence of his sons or daughters

·         If the women has acquired any property from her Husband, in that case the first right will be of the heirs of her husband ,  in case of absence of his sons or daughters

An Example

Suppose Supriya is a widow without any children dies without a WILL. She has acquired 1 flat in Mumbai from his Father’s, and has acquired one Flat in Pune from his Husband through a WILL, now suppose Supriya has 3 people in family.

·        Father in law

·        Mother in law

·        Brother in law

Now understand this case properly , As the person in question here is a Women, there will be distribution of her property like this-

The flat in Pune was acquired by her from her Father and as she also has no children, that flat in Pune will go to his Father’s legal heir. if Supriya had a Sister Poonam, in that case Poonam would be the legal heir of her Father and she would get 100% of the flat in Mumbai. Supriya’s Family would not be able to claim it legally.

However the Flat in Pune was acquired by Supriya from her husband and in this case , her husband’s legal heir would be claiming it, which means Supriya’s mother in law would get the absolute right on the Pune Flat because only she comes under Class I (Father and Brother come under Class II for a Male) .

Conclusion

In case a will is missing and the legal heirs get into fight over the wealth, things can get ugly and the wealth might to to someone which you might not have wanted or imagined. Hence writing a WILL should be on a high priority list . This article just gives a very basic rules, in reality things can get more complicated and its always advisable to hire a good lawyer in these cases. This article is just for information and awareness purpose. Dont take it as the complete guide.

Source : www.jagoinvestor.com

EARNING 10 LACS ? YOU HAVE TO FILE E-RETURNS

Vidyalaxmi explains the options available for filing returns for individuals in different income-tax brackets and shows the benefits of online filing

You will soon get the Form 16 with details of your income and taxes paid from your employer. Then you have a couple of months to file your tax returns. However, the Central Board of Direct Taxes (CBDT) has issued a notification which has made it mandatory for individuals earning an annual income in excess of 10 lakh to file their returns online from the current financial year. Until now, an individual with income above . 10 lakh had the choice of filing income-tax returns either online or through an auditor/chartered accountant. 

INDIVIDUALS EARNING OVER 10 LAKH SALARIED INCOME 

“It is now mandatory for individuals with total income above Rs.10 lakh to file their personal tax returns online through the income-tax website,” says Vineet Agarwal, director, KPMG. This new notification is applicable to individuals and Hindu Undivided Family (HUF) taxpayers as well. 

Online tax filing definitely comes with certain advantages. You can efile the returns from home or office anytime. Moreover, it is easier to track refunds which will be either transferred electronically to the bank account or will be sent by cheque. 

But don’t wait till the last week of July to e-file your returns. Send signed ITR V form to the Centralised Processing Centre, Bangalore, as soon as possible and resend the same if you do not receive a confirmation for the one sent earlier. The income-tax department’s e-filing website becomes almost inaccessible (due to server overload) during the last few days of July. In such cases you have the option of filing your e-return through other private tax filing portals. 

“Further, resident individuals having assets abroad (including authority to sign a bank account held abroad) are compulsorily required to file their returns electronically for AY 2012-13 and for subsequent assessment years as well,” says Vaibhav Sankla, director-business development and tax training, H&R Block India. 

INDIVIDUALS EARNING UP TO 5 LAKH ANNUAL INCOME 

As per the Notification, only individuals who satisfy the following conditions are eligible for exemption from furnishing returns for tax year 2011-12: 

a) Total income does not exceed Rs. 500,000. 

b) Total income consists only of income under the following heads: 

- ‘Salaries’ 

- ‘Income from other sources’ by way of interest, not exceeding Rs.10,000, from a savings bank account 

“Apart from the above conditions, ensure that you report your Permanent Account Number (PAN), savings bank account interest income to your employer and the employer should withhold tax on such interest income,” says Amarpal Chadha, tax partner at Ernst & Young. 

Also, the employer should provide the tax withholding certificate (Form 16) to the employee which mentions the PAN, details of income and taxes withheld. “Moreover, there should be no further tax payable by employee by way of advance tax or self-assessment tax, no refund claim for the relevant tax year and the employee should receive salary from only one employer for the tax year,” says Chadha. 

INDIVIDUALS IN 5-10 LAKH BRACKET 

There has not been any change in tax filing for individuals falling in this income category. They have the option of filing returns either manually or electronically. 

Compared to offline filing, e-filing is the indeed hassle free. Firstly, the Sahaj form has too many specifications. The logic behind introducing such specifications is to facilitate easier processing of forms for the I-T department, given the sheer increase in the volume of tax payers in the country. Just to quote one example, the form has some colour specifications which mean the tax payer has to find a colour printer to take a printout of the form prior to submission. Under such circumstances, it only benefits the tax payer to opt for e-filing. “However, beware of emails that feature a link to the income-tax office website. These should be carefully evaluated as it may be intended to steal your sensitive personal information like credit card/bank details,” cautions Vineet Agarwal of KPMG. 

FOR SELF-EMPLOYED PROFESSIONALS 

The notification with regard to exemption from furnishing returns for tax year 2011-12 is applicable to those individuals where total income consists only of incomes under the following heads: ‘Salaries’. Also, it mentioned ‘Income from other sources’ by way of interest, not exceeding Rs.10,000, from a savings bank account. This automatically rules out self-employed professionals. “However, the notification with regard to mandatory e-filing is applicable to an individual or HUF having total income exceeding . 10 lakh. Hence, self-employed individuals will also be covered under this notification,” says Vaibhav Sankla. 

Source - The Economic Times - 24/4/2012

GOLD - WHY, WHEN & HOW TO BUY IT

It is a unique asset class, which combines steady returns with high liquidity and an unmatched emotional satisfaction for the buyer. Find out how you can also benefit from investing in gold.

    Indians love gold. More than 18,000 tonnes of the metal is lying in Indian households. This is enough to supply Americans with all the gold they want for the next 100 years. That’s the theory. In reality, very few Indians would want to sell the gold they own. Nearly 83% of the respondents in an online survey conducted by economictimes.com last week said that despite the high prices, they were not considering selling their gold holdings. In fact, 85% wanted to buy more gold this year, and 28% of these were determined to do so irrespective of the price of the metal.
    What explains this unfettered love for gold? For one, it is a unique asset class that combines steady returns, liquidity and an emotional satisfaction for the buyer. It is also the best way to flaunt one’s wealth. The quantum of gold owned by a household is seen by many as a reflection of its status in society. The metal also has a strong religious link, which will be in full display on Akshaya Tritiya, the auspicious day that is supposed to herald prosperity and good fortune. Legend has it that any investment made on this holy day will never diminish in value. Well, gold is seen as one asset that can never go down. Short-term hiccups notwithstanding, it has been the best performing asset class in the past five years, delivering annualised returns of 23.5% since March 2007.  Will the gold rally continue? Most factors point to a sustained rise in gold prices. See the coloured write up below.

    A major chunk of gold owned by Indians is in the physical form. However, paper gold is fast becoming popular and almost 35% of the gold demand is for this more convenient, cost-effective and tax-efficient alternative. Sure, gold in its physical form has a certain allure, but paper gold offers several advantages to the investor (see box).

Why you must invest in gold
Gold has for long been considered a hedge against inflation. While it may not have always beaten inflation, in the past few years, the inflation adjusted returns from gold have been spectacular. However, even equities can offer similar returns. What makes gold a must-have in the portfolio is its status as a safe haven during uncertainty. It is a safer bet when there is lack of faith in the global monetary system. Jayant Pai, vice-president, Parag Parikh Financial Advisory Services, says, “Gold is an efficient store of value during uncertainty.” This is because the value of gold cannot be manipulated by the monetary policies of a nation or a government. It is a medium of exchange that has absolutely no default risk, unlike the dollar or any other currency. In today’s unsettled currency markets, gold provides the only reliable alternative for ensuring protection of value. For many investors, gold has now become a
sanctuary from the risk of sovereign defaults, political turmoil and other unforeseen events.
    Secondly, gold has little correlation with other asset classes, such as equities and debt, which helps diversify the portfolio. Jayant Manglik, president, retail distribution, Religare Broking, agrees. “Gold adds an element of diversification to the portfolio,” he says. Gold has outperformed most others in recent times. Gold ETFs have given an average return of more than 23% in the past five years, while the stock market has delivered a mere 5.73%. Over the past year, gold has yielded 33% against a 10% decline in the equity market. No wonder then that gold ETFs sell like hot cakes and have amassed thousands of crores in assets. In the nine months between March and December 2011, the assets under management of gold ETFs shot up from 3,765 crore to 9,202 crore—a rise of 144%.

How much gold to hold?
Gold lends stability to the overall portfolio when other assets are not doing well. Having said that, it must be added that gold should not account for a large chunk of your total investment portfolio. Financial experts advise not to allocate more than 10-15% of the portfolio to the yellow metal. While the benefits of diversification may be genuine, there is also a risk associated with gold. One cannot expect gold to continue delivering stellar returns year after year. Like any other asset, gold prices too can fluctuate sharply.

    The relentless rise in gold prices of late is only one side of the gold story, fuelled by negative real interest rates in the US as well as global uncertainties. In the past, gold prices have also seen a sustained decline over a period of several years. Gold prices had tanked in dollar terms from $850 per ounce in 1981 to $250 per ounce in 2001—a sustained drop in value over a period of 20 years. However, sitting here in India, you would not have realised this as the depreciation in the rupee against the dollar during this period made sure that domestic gold prices actually rose higher in rupee terms.

Why paper gold makes more sense
As mentioned earlier, gold jewellery, bars and coins will continue to be on people’s wishlist. Gold jewellery offers unique benefits to the buyer. He gets the emotional satisfaction of using the product even as the value of jewellery appreciates. Bars and coins also have their own charm, or snob appeal, if you will. However, buying physical gold entails high making charges. This can be as little as 100-200 per gram for basic bangles and chains. But if you go in for exotic designs that require intricate workmanship, be prepared to shell out up to 600-800 per gram. This pushes up the price of the jewellery. A 20-gram ornament of 22 carat purity might be priced at 60,000 even though the gold value would be only 50,000. Incidentally, the jeweller won’t pay you for the making charges when you go to sell the item. Not just that, he may actually deduct another 5-10% from the gold value if the ornament was purchased from some other jeweller.

Turning paper gold into jewellery
If you want to buy physical gold, you can take the paper gold route and then convert it into physical gold. E-gold offers the best option. The investor can convert his e-gold units into bars or coins of 99.5% purity. The delivery needs to be in multiples of 8 g, 10 g, 100 g or 1 kg. However, this facility is available only in Mumbai, Delhi and Ahmedabad, and delivery must be taken within 15 days of the request. The entire process involves some costs—making and packaging charges, delivery charges, VAT and other dues.
    Gold ETFs also offer the buyer the option to convert them into physical metal, but this can be done only in multiples of 1 kg, though Motilal Oswal AMC offers physical delivery of gold in multiples of 10 g. Here, too, there is an additional delivery charge, which includes transportation, insurance, storage, delivery, administration, signature verification, document verification, etc. The facility is restricted to Mumbai, Ahmedabad, Bangalore and Hyderabad as of now.
    If you invest in gold futures, you can convert your position into physical gold. Commodity exchanges offer several smallsized contracts, with the most important among them being Gold Mini (100 g) and Gold Guinea (8 g). Here, again, the buyer has to pay the making charges ( 200 per Gold Guinea) and other statutory levies. Since these are national exchanges, you will be able to take delivery of the physical gold in major cities, including Mumbai, Ahmedabad, Delhi, Hyderabad, Bangalore, Chennai and Kolkata.

Where is gold headed?

Despite the recent correction, gold prices are likely to stay firm. Narendra Nathan finds that the factors that fuelled the rally are still in place.

Euro crisis could spread
Though it is believed that the Eurozone crisis is under control, the recent spike in Spanish bond yields has dimmed hopes. The 10-year bond yields crossed the 6% mark—a level that had forced Greece and Portugal to seek bailouts. However, there is no improvement in those countries. The 10-year yield on Greek bonds is still at an unsustainable 21%, while the 5-year Portuguese bonds are offering 14%. The biggest worry now is that the contagion may spread to other nations. “Sovereign debt crisis is not restricted to Europe. It may spread to other highly indebted countries like the US and Japan,” says Praveen Singh, senior commodities analyst, Sharekhan. Recently, the US had lost its AAA tag after holding it for more than 70 years. Investors are losing faith in the fiat currencies and getting into gold, the international currency for the last 5,000 years. After selling gold for decades, central bankers have also started buying it back for diversification.

High inflation likely to continue
Gold has traditionally been a hedge against inflation. Given the way central bankers across the globe are printing money, inflation will remain at high levels. The European Central Bank (ECB) has pumped $1.3 trillion into the European banks in the past few months. There are fears that the US may slide back into recession because Europe is its largest trading partner. If that happens, be ready for a further stimulus. Despite high inflation, several countries like India, China and Brazil have started cutting rates to stimulate growth. So, the gold rally may continue till the inflation becomes unbearable and the global central bankers start raising the rates once again.

Strengthening dollar
Based on these factors, gold prices could move up at least for some more time. “The undertone in gold is still very bullish and one can expect a 15-20% gain from the current level in one year,” says Jayant Manglik. “Though a cut to $1,450 is possible around mid-year, its impact in rupee terms will be minimal because of the rupee depreciation,” says Praveen Singh. The dollar has moved from 46.11 on 6 September 2011 to 51.49 now. This 12% gain has cushioned the gold prices in India. This may be repeated in the future as well.

Oil prices may rise further
The simmering tension in West Asia and the US-Iran standoff over Iran’s plans to develop nuclear technology are also fuelling the spurt in gold prices. The price of gold shares has a strong correlation with crude oil prices. There is also speculation that Israel may attack Iran’s nuclear facility in May-June if there is no agreement after the ongoing talks. Since Iran is the second largest oil producer in the OPEC, any action by Israel may result in a spiking of oil prices. Even if the Iran issue is settled, the risk premium for gold may not vanish. “The security premium will always be there for gold. If it is not Iran, some other issues—like the Jasmine revolution or North Korea—always seem to be there,” says Jayant Manglik, president, retail distribution, Religare Broking.

Demand will remain high
While the gold ornament business is down, gold imports continue unabated. “There is a steep increase in demand for gold coins and bars for investment purposes,” says Hasmukh Bafna, president of the Gold Chains & Jewellery Wholesalers Association. The budget had imposed curbs on the use of unaccounted money to buy gold, but the powerful jeweller lobby has received some oral promises from the finance minister. Meanwhile, gold demand is picking up in a big way in China, which overtook India as the biggest consumer of gold in October-December 2011. The World Gold Council estimates that China will unseat India as the biggest gold market in 2012.

Source : SANKET DHANORKAR – ET Wealth – 23/04/2012

PAN NUMBER EXPLAINED

AAA	A	A	9999	A
1	2	3	4	5

PAN explained.......

PAN is a 10 digit alpha numeric number, where the first 5 characters are letters, the next 4 numbers and the last one a letter again. These 10 characters can be divided in five parts as can be seen below. The meaning of each number has been explained further.

1. First three characters are alphabetic series running from AAA to ZZZ

2. Fourth character of PAN represents the status of the PAN holder.
• C — Company
• P — Person
• H — HUF(Hindu Undivided Family)
• F — Firm
• A — Association of Persons (AOP)
• T — AOP (Trust)
• B — Body of Individuals (BOI)
• L — Local Authority
• J — Artificial Juridical Person
• G — Government

3. Fifth character represents first character of the PAN holder’s last name/surname.

4. Next four characters are sequential number running from 0001 to 9999.

5. Last character in the PAN is an alphabetic check digit.

Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.

HOW TO SAVE ON YOUR VACATION

No need to scrap your summer vacation due to the rising air fares and hotel tariffs. Find out how to shave big bucks off your travel costs and the holiday destinations that will fit into a tight budget.

With summer vacations fast approaching, if you are keen on anything but a staycation (stay at home holiday), it’s high time you started planning for it. The biggest reason to make haste is to not only make sure you get a room at the popular hotels, especially in the affordable category, but to also bag the early booking discount that hotels, airlines and cruises round the world are only too happy to roll out. However, this is just the beginning of your savings potential. If you do your research right, you can save anywhere from 20% to 40% on your total trip. We tell you how to do it. Time your travel YOU CAN SAVE 

The surest way to big savings is to time your travel in such a way that you reach your holiday destination either just before its peak season or after it is over. This way you won’t have to worry about bagging discounts at the risk of the 10-30% since the room rates are this much higher in peak season than in the months immediately preceding it. 

Weather playing party pooper nor will you have to deal with crowds. So let the hordes descend on the hill stations of India or foreign hotspots like Singapore, Switzerland and Spain, there are better rates and less hurried service to be had in places that are just a little warmer or wetter. Like Kerala, Cambodia, or if you can handle it, Egypt. According to industry insiders, shoulder season rates on hotels, tour packages as well as cruises are typically 10% to 30% lower than the peak season rates. The key to bagging a cheaper deal is to book early. Says Karan Anand, head of relationships, Cox & Kings: “You will save at least 10-15% if you book as early as two months in advance.” Fly smart YOU CAN SAVE 14-18% if you use the multi-city flight tool while booking tickets online for city-hopping tours. 

Apart from when you book your flight, the day and the time of your flight also has a bearing on the fares. According to Cleartrip.com, the slowest days of the week, Tuesdays, Wednesdays and Saturdays, always offer the cheapest airfare. For instance, the Jet Airways website shows a Delhi-Mumbai flight costing 4,911 on Monday, 4 June, but the fare for the next two days is 4,774. This price differential is usually more pronounced on international flights. Similarly, a late morning or an afternoon flight can sometimes be found marginally cheaper than an early morning or a late night one, which is when corporate slaves predominantly hog the flights.

Also, if you are planning a multiple city itinerary, make sure you avail of the multi-city flight booking option now offered by all the leading travel portals. This not only makes planning easier, but also saves money. Suppose you are flying to Phnom Penh, Cambodia, and Ho Chi Minh City, Vietnam, from Delhi and book individual flights on Cleartrip.com, your total cost works out to 58,477 per head this June if you add up the cheapest air fares for each leg of the journey. However, the lowest fare yielded by the multi-city tool is 49,762 per person. A random check of 10 other multi-city itineraries on Cleartrip.comand Kayak.com yielded discounts of 14-18% over separate bookings.

Don’t forget that booking too early is just as risky as booking too late. According to Rick Seaney, CEO of FareCompare.com, airlines typically start actively ‘managing’ prices three or four months before any departure date, and booking a flight any earlier may mean that you end up paying more. For instance, the monthview tool on Cleartrip.comshows that a Delhi-Goa flight in November will cost around 5,400 while the fares for June and July are between 5,024 and 5,097.

Save on stays 

YOU CAN SAVE 5-10% on room rent. For instance, Alleppey is pretty much the same backwaters as Kumarakom, yet average room rates there are lower by almost 5%, according to CheapTrav.com. 
Let’s start with the obvious—B&Bs, serviced apartments and homestays will always score over hotels when it comes to the more-for-less stakes. That is, more amenities that you actually need, like a kitchenette and free laundry facilities, for fewer bucks. Portals such as TripAdvisor.com, MyGuestHouse.com, AirBnB.com,HomeAway.com, BedAndBreakfast.comand Roomwale.com are your best bets to fish out such accommodations. Here’s a good way to maximise your savings without entirely giving up on some luxurious pampering. Choose selfcatering options in the big cities and go for fancier hotels in smaller towns and offbeat destinations. So, while five-star hotels in Indore will be obviously cheaper than those in Mumbai, there is also a big price difference between places like Alleppey and Kumarakom. For instance, three star hotels in the latter start at 2,625 on MakeMyTrip, the same category hotels in Alleppey (or Alappuzha) can be booked for just 1,000 a night. The famed houseboat cruises from Alleppey are comparatively cheaper as well. Similarly, your money will fetch a far better room in Vincennes than in Paris, yet it is just a short metro ride away from all the must-see attractions.

The travel-on-a-budget bible also tells us to always book directly with the hotel to land the best deals, be it straight discounts or some freebies (a spa treatment or airport transfers). But don’t blindly follow this cardinal rule. Sometimes, portals beat the rates listed on individual hotel reservation sites in an attempt to woo eyeballs. For instance, Excluzen.com, a luxury lifestyle and experiential travel website, is offering a straight discount of 5,000 on the per night quoted by the Oberoi Udaivilas reservation engine. So, always shop around before contacting the hotel. Deals on meals YOU CAN SAVE 40-50% for a family of four by relying on heat-and-eat meals instead of dining out. An average meal costs 200-250 while Minute Meals cost under 100 a pack. 
Whether you are considering self-catering accommodation or hotels on MAP pricing, which includes breakfast and dinner, there will be times when you want to experience the local cuisine. The worst thing to do here is to grab a bite at one of the crowded eateries in and around the tourist attractions. Meals at a restaurant housed in a hotel, too, will be pricier than most standalone eateries. So before you head out for sightseeing, stop at your hotel’s reception desk or contact your rented accommodation’s owners and ask where they prefer to eat with their families and friends. More often than not, you will be directed to no-frills restaurants serving better fare at much lower prices.

Also, make sure you pick up a local newspaper and check for any listed ongoing promotions at nearby restaurants. Savvy travellers will tell you about bagging salad-soup-dessert lunch combos that are up to 50% off the regular buffet prices or extended happy hours facilitating a binge drinking fest at unbelievable prices. “Some restaurant chains charge almost 40% less during lunch,” says Prashant Chauhan, director, MyGuestHouse.com.

Source – ET Wealth – 16/04/2012

INVOLVE YOUR SPOUSE IN FINANCIAL PLANNING

Pravin, one of my close friends got his financial plan prepared without the involvement of Jaya, his wife who is a Law graduate by qualification and had opted out of career to take care of their son and other responsibilities as a homemaker. He was of the opinion that since they always discuss on what was really wanted in life, he indirectly is communicating it all.  We met up at his office a couple of times and once at his home too, however she was not part of the planning process at all. The plan was made and implemented. A year passed and all was well, until we met for the review.

This time I could convince Pravin and we roped in Jaya. Though he was still of the same opinion. To begin with, the plan was explained to her in detail with respect to the aspects that it catered, like all the contingencies, the education & marriage of their son; Rahul, a vacation home, medical corpus for his parents & in laws, retirement etc. At the end of it she nodded her head in agreement.

During the process I happened to ask about her aspirations and how she felt regarding the way the family goals were structured and catered to and she couldn’t control her tears. Over the last several years she was totally engaged in catering to what the husband or son wanted and what was important for them. It was all limited to their schedules, their commitments and it all ended there. In a way she had lost her identity though it was her choice that she wanted it to revolve around her near and dear ones. However it was for the first time in these many years that she was asked her view and opinion.

And the plan changed upside down. Though the goals were almost the same, she had her own ideas about them – like:

1.       The way she would like their son’s marriage to be conducted, what she would like to give her daughter in law, their customs and traditions.

2.       Further she as a child was brought up in the interiors, very close to nature, which she always longed for since marriage. But since Pravin was always more dedicated to his business and they hardly had any vacations & her longing remained unaddressed.

3.       She had her own ideas about retirement too. To be with their only son wherever he would settle, i.e. settle in the same city as he would, may or may not be in the same house, depending on the situation.

4.       Since the son had now grown up, she intended to work part time for a NGO, which cared for the abused/exploited women in society and in the process utilise her capabilities as a lawyer.

5.       Lastly she also threw some insights into the inclination and interests of their son and the direction in which his eduction shall progress.

She brought in a lot of clarity to the process, which led to a healthy discussion on the various goals in detail and then they arrived at a common platform for their future which was in alignment with their goals. This helped me to work in the right direction of course at the cost of:

1.       Almost a new plan was in the making, since it was better than amending.

2.       Reworking the investment strategy to meet the redefined goals.

3.       Fresh implementation.

We Indians are brought up in the way Pravin behaved, since for generations the head of the family took all the decisions, offcourse keeping in mind the well being of the family, which worked very well in the joint family system. The system effectively distributed all the responsibilities and the support was very much built in. However with the change in the way we live today, the nuclear family system has become the new norm and here the dynamics are totally different with the values & support of the joint family system fast vanishing.

To conclude, a good lesson taught by this experience “ALWAYS INVOLVE all the STAKEHOLDERS concerned” to get the right picture of their aspirations and deliver a plan which shall cater to the aligned goals. A lesson for you is “Always involve your Spouse in Financial Matters”.

Source : Chetan Bhatia - tflguide.com