Info on EPFO

ET carries an article today about provision of monthly slips with PF balances to contributors every month from EPFO ( Employees provident fund office). This seems to be the step in right direction. As of now, things like transfer, withdrawal, inquiry are not as transparent or as swift as they should be.

Whenever I have tried to transfer my PF ( when I have changed employers), I have really had a tough time. When a query is made to the PF offices concerned ( From and To PF offices), both of them point to each other or they say that they haven't received the form yet. This in spite of the fact my employer assuring that the form has been sent.

( You can use this link to register your EPF grievance)

Such loopholes and lack of transparency with one's money is definitely painful. They should try to emulate the NPS website  in terms of providing all information to subscribers online.

Now when the new government employees pension funds are managed by NPS ( Funds managed by six private funds), the EPF funds of private employees is managed by EPFO ( government organization).

In the long run, these organizations / schemes should be clubbed together for efficiency and everyone should have an unique identifier to manage his pension funds ( PRAN Number probably or UID
), irrespective of where he works and change of employment.

We have a long way to go!

Here's the link of the ET article mentioned above.

Sensex to touch 30000

"In our view, Sensex 30,000 could be a reality in the next few years...

It could happen sooner or maybe even later. "
There was a mail from a group which solicits subscription for equity tips in my inbox. The first two sentences of the mail is posted for your reference above.
The statement is so funny. They say it may happen soon or may be even later ( say 20 /30 years). Over  a longer period the sensex would definitely cross 30,000 at least to keep pace with inflation and population growth. By such a statement the news letter  tries to be smart and get their statement to be true in any circumstance  (sooner or later).
I am not telling anyone to stop subscribing to such news letters( that's your own decision). But any day I wouldn't invest based  on a (unsolicited or solicited) tip from a person  who's not even sure about what he is talking.

Instruction Manual for Investing *

*-guest post by  Ramalingam K

Let’s open the manual:

Every gadget you buy in the market comes with an instruction manual or user’s manual. But your salary, savings...retirement don’t come with an instruction manual. So we don’t know how to handle these and we end up mishandling. The result is poor investment choices and unhappy retirement. This article is an effort to draft an instruction manual for our investments.

Investment forms an integral part of our work life, with many wanting to save and invest to meet our long-term financial needs. We would all agree that just living from paycheque to paycheque would leave us in a bad financial state making us incapable of meeting our family’s financial commitments and our expenses after retirement.

Confusion on HRA exemption.

Most of us would be aware of the 3 rules for calculating HRA exemption and how it works .


As per the Indian income tax law, the HRA exemption should be calculated as the least of the following.

1. Rent paid in excess of 10% of basic salary.

2. Actual HRA received by the employee.

3.  40% of BASIC ( non metro) (50% if metro)  )

If  during a particular year

1) a person remains unemployed for some time or
2) changes employment between metro/non metro and his HRA and rent paid change
3) remains as salaried employee for a particular period of the year only
4) HRA / Rent changes when  working for the same company

and many more such scenarios, how to calculate HRA exemption ( at a yearly/ monthly level)

There is no definite answer I could figure out ,but the following link sounds logical.

If any of the readers have more authentic information, please do drop a mail

Some practical difficulties with NPS

There are some practical difficulties with NPS which I figured out as an investor. Probably this problem might have been aggravated by my POP too.

1) My contribution to tier-1 or 2 takes more than one week to find it's way to my account as units. In fact, one of my latest contribution was a month back and I am yet to see the units in my account. The cheque was cleared by the POP long back.
I am waiting to hear from the CRA NSDL grievance cell on the complaint made in this regard.

( This should become seem less like MF. If they receive the cheque on a particular day, I should be sure of getting the  units as per the  days NAV- subject to cut off time). We really have a long way to go here.

2) I have been contributing to tier -2 with fund management A. I wanted to re-direct only the future contributions to fund B having the previous units with fund A. Unfortunately, this doesn't seem to be possible .
If I give a switch request from fund A to B,then all my existing contributions plus the future contributions would be directed to fund B.
This seems like a limitation to me.

Hope as more and more people get into the bus, things should get better ( and not other wise :-) )

Index Fund , Another perspective

Investing in index fund in lump sum or through SIP is considered a good option as compared to active investing. There are many index based ETFs and mutual funds in India although they are not as popular as in the west.

Index investing is popular in the west and not as much popular in India. In India, Actively managed funds have managed to give better returns excepting the recent past where the markets have been highly volatile.

Index funds are supposed to match the returns of the index and so the management cost is supposed to be low.Some actively managed funds don't even match up to the returns of index funds. So, should we all switch to index funds??

Was reading Parag Parikh's book on value investing where he states two facts with examples
1. Sectors that are 'HOT' find an easy way to the index ( like IT in 2000, Real estate in 2007,etc) and grab a decent weightage in Index during the bull phase of the sector.
2. Most of the times the stock that is replaced in an Index gives better returns than the replacing stock .( Some numeric examples are given in the book to prove it).

This is definitely a good perspective which states that index allows for inefficiencies and is not perfect.

So, should index funds be abandoned by investors? . Not really.

It is up to the investors to decide what exactly they expect their investments to do ( i.e beat the market or meet the market return).


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" A Ship is safe when it is in Harbour, but the ship was not built for that"


These are just opinions/ ideas exchanged. No one can claim us responsible for any investment failures /losses based on the ideas expressed here.

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