New Beginnings Mean Refreshed Hopes

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New Beginnings Mean Refreshed Hopes
Anagh Pal - 07 November 2019

Searching for balance in life can be one of the most difficult tasks. However, we all strive to do that and that often demands taking harsh decisions like moving away from family. Often a better opportunity in terms of education or employment makes relocating to a new city necessary.

While moving cities as a bachelor is pretty easy, once someone is married and has a family to take care of, relocating can be a tad bit complicated. However, if the need arises, one has to do it. And there are certain factors to consider  before relocating. 

Let us consider some of these factors. The first factor is the cost of living in the new city. For example, since Mumbai or Bengaluru would be more expensive than Kolkata, rental values of property will be a major factor. How much can you afford for rent?

“When renting an apartment, there is also the requirement for a security deposit. In some cities the security deposit may be three months rent, in some it can be a year’s rent,” says B Srinivasan, certified financial planner. If your rent is Rs60,000 a month, that would mean Rs7.2 Lakh as a security deposit for a year. That needs to be arranged. Often brokerage fee also needs to  be paid.

Work location is yet another  highly important aspect that needs to be factored in while considering relocation. Even short distances in  big cities take several hours to commute, especially during peak hours. So, it is important to strike a balance in the distance between home and place of work. If paying a few thousand extra on rent can save commute time and costs, that could  be a wise decision.

“Locational advantages and disadvantages need to be studied closely and thought through,” explains Srinivasan.

On the other hand, if you have children, schooling needs to be sorted as well. Some renowned schools end up charging more than Rs1 Lakh a year. Do remember to consider the locality, distance at which the school is located and of course its fees.

“Before relocating to a new city one must do enough homework on all aspects. Many companies these days assist in terms of providing  accommodation for a month or till the time the employee finds his own accommodation,” comments Balvir Chawla, Director at Finnovators Solutions.

Relocation assitance is often provided by companies these days. Check if your employer also falls under the category. If they do, find out what is included in it. How much assistance you are eligible for? Will they reimburse all your costs or offer a lump sum? In case they are offering a lump sum, how much would you need to shell out?

If your company does not provide relocation assistance, ask them for it. There is no harm in negotiating. You should have an estimate of the expenses concerned-cost of professional movers, transportation expenses, temporary housing till you find a place to move in.

Once you have a detailed estimate, you can negotiate with your employer to reimburse them. Having a relocation budget is thus important and will help to plan the finances of your relocation.

As per section 10(14) of Income Tax Act and under the rule 22B of Income Tax Rules, 1962, allowance granted on relocation can be claimed as tax exemption. This would include transfer of personal goods and  daily expenses incurred during  such transfer.

To claim this tax deduction, maintain record of documents and proof of payments made. In case the employer has reimbursed more than the actual expenses, it will  be taxable. 

When relocating, simplify the entire process as much as you can. Sell off or dispose anything that you can. Lesser the stuff, less expenses you will incur.

Relocation is a tedious process and often involves unseen expenses. Make a checklist and start the process early. Moving to a new place would demand new cooking gas connection as well as cable or DTH connection. If you have a vehicle, you will need to transfer registration. All these would incur substantial expenses.

It is always a wise decision to explore your surroundings before moving into a new place. Interacting with your prospective neighbours is actually a good idea.



“Maybe the family or some of the members can live for a short while before the permanent move to assess the advantages and disadvantages of living there. Living temporarily in a place will give them an idea on cost of living, daily routine and financial transactions,” says Hemant Beniwal, a certified financial planner and Director, Ark Primary Advisors. Spending a week or so in the new city before final relocation is a good idea. This will help you get an idea of what to expect going ahead.

“Relocation also gives one an opportunity to take stock of the assets one may have. One can keep away the valuables in a locker at the origin city or the new place where they have relocated,” advises Chawla.

Relocating implies that you will be starting all over again in a new place along with your old way of life. Make sure you carry along important documents like insurance policies and medical records.

“Setting of online payment for all statutory payments linked to your assets in the origin town would be ideal. So, if one has a property in the origin town then setting up of electricity bills, society maintainence property taxes would be good,” Chawla further adds.

If planned ahead of time and in a proper manner, the process of relocation can become easier and the excitement of starting a  new life at a new place can  increase manifold! 

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