What is a Future Contract?

Let us start with Futures -

What is a futures contract?

Futures contract means an agreement to buy or sell the underlying security on a future date. Such agreements are legally binding in nature.

Specifications regarding the delivery, time and place of settlement, quantity, quality in case of commodities are decided beforehand in the contract itself. Futures can be settled by delivery of the underlying security - cash or asset as the case may be. E.g: In case of a commodity - by delivery of that commodity on which contract was made.

The date decided beforehand for settlement on which contract expires is called as "the expiry date of the contract".

Cash settlement means paying or receiving the difference between the price at which the contract was entered and the price of the underlying asset at the time of expiry of the contract.

As a result, a person may face profit or loss depending on the difference of price between period as mentioned above.

My upcoming posts -

With everyone talking about Hedge funds, Derivatives, Futures, Options, Sarbans Oxley Act, etc., I will be posting here a short article on them soon. Keep watching this space...

Persons exempt from payment of Profession Tax

Exemption from payment of Profession Tax –

Following classes of persons are exempted from payment of Profession Tax –

1. Members of the forces as defined in the Army Act, 1950 or the Air Force Act, 1950 and the Navy Act, 1957 including members of auxillary forces or reservists, serving in the state.
2. The badli workers in the textile industry.
3. Any person suffering from a permanent physical disability (including blindness)
4. Women exclusively engaged as agent under the Mahila Pradhan Kshetriya Bachat Yojna or Director of Small Savings.
5. Parents or guardian of any person who is suffering from mental retardation
6. Persons who have completed the age of 65 years (w.e.f. 1.4.1995)
7. Parents or guardians of a child suffering from a physical disability as specified in clause (C) w.e.f 1.10.1996

So, in case you are above 65 years of age, contact your Profession Tax office alongwith an application stating that you are above 65 years of age & carry a proof of your age- ex: Pan Card or Voter's ID card.

In the store- It is heard that 01/04/2008 onwards, Profession tax office will be handling Service tax as well!

Profession Tax Amnesty Date Extended

Last date for submission of application for Profession Tax Amnesty Scheme has been extended upto 30.11.2007.

Types of Mortgages in India

Type of Mortgages in India

Definitions -

Sec. 58 of the Transfer of Property Act, 1882 defines mortgage as -

A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.

Types of Mortgages -

1. Simple Mortgage
2. Mortgage by Conditional Sale
3. Usufructuary Mortgage
4. English Mortgage
5. Mortgage by deposit of title of deeds
6. Anomalous mortgage

1. Simple Mortgage -

In a Simple mortgage, the possession of the mortgaged property is not transferred from mortgagor to the mortgagee.

If the mortgagor fails to repay the loan, the mortgagee has the right to sell the property and recover the loan from the sale amount.

2. Mortgage by Conditional Sale -

Under such Mortgage, the mortgagor apparently sells the property to the mortgagee on certain conditions -

1.On failure to repay the mortgage money before a certain date the sale shall become absolute,or
2.On condition that on such repayment of mortgage money the sale shall become invalid,or
3.On condition that on such repayment the mortgagee shall retransfer the property.

In such case, the mortgagee is a "mortgagee by conditional sale".

3. Usufructuary Mortgage -

In a usufructuary Mortgage, the possession of the mortgaged property is transferred to the mortgagee. The mortgagee receives the income from the property (rent, profit, interest, etc) until the repayment of the loan. The title deeds remain with the owner.

4. English Mortgage -

In an English Mortgage -

1.The mortgagor binds himself to repay the borrowed money on a certain date.
2.The mortgagor transfers the property absolutely to the mortgagee.
3.But such transfer is subject to the condition that the mortgagee will retransfer the property on repayment before the agreed date.

5. Mortgage by deposit of title of deeds -
In such mortgage, the mortgagor delivers the title document of the property to the mortgagee with an intention to create a security thereon. Such mortgage is valid in towns of Kolkatta, Mumbai and any other town as the State Government may notify by publication in Official Gazatte

6. Anomalous mortgage -

Anomalous mortgage is a combination of different types of mortgages.


In the US, concept of Reverse Mortgage is fast catching up -

Meaning - A reverse mortgage loan is a loan where the lender pays the monthly installments to you instead of you making any payments to the lender. Hence the name reverse mortgage, as the payment stream is reversed. A Reverse mortgage enables senior citizens to convert their home equity into tax-free income. Reverse mortgages enable eligible homeowners to access the money they have built up as equity in their homes. They are primarily designed to strengthen seniors’ personal and financial independence by providing funds without a monthly payment burden during their lifetime in their home.