Author: root

Partnership Company Taxation: CBDT Issues Latest Rules In India

Personal Finance

[ad_1]

Read More/Less


Taxes

oi-Sneha Kulkarni

|

In accordance with Section 9B and Subsection (4) of Section 45 of the Income-tax Act of 1961, the Central Board of Direct Taxes (CBDT) established instructions for taxing partnership firms on their reconstitution.

After the Finance Act of 2021 added a new section 9B to the Income Tax Act and replaced another provision – 4 of section 45 – the recommendations aim to provide clarity on the techniques to be used when calculating tax liabilities.

Partnership Company Taxation: CBDT Issues Latest Rules In India

Section 9B taxed the firm’s income on the transfer of capital assets and stock in trade, whereas Section 45(4) now taxes income in the hands of the firm, which is actually the income in the hands of the partner.

The CBDT observed that the amount taxed under section 45(4) of the Act must be attributed to the specified entity’s remaining capital assets, so that when such capital is transferred in the future, the amount attributed to such capital assets is subtracted from the value of the consideration, and the specified entity does not have to pay tax on the amount again.

It should also be noted that this attribution is only made in the Act for the purposes of section 48 of the Act.

The adjustments will take effect in the evaluation year 2021-22. These parts cover the deemed transfer of a capital asset or stock in trade to a firm’s leaving partner and the receipt of a capital asset or funds by a firm’s partner. Any profits and gains flowing from such a presumed transfer are considered as partnership income under the Finance Act.

In a circular, the CBDT stated that the instructions were issued under provisions intended to make implementation easier. The recommendations explain how to attribute an entity’s income on its reconstitution and provide examples of scenarios where a partner leaves a firm and the organisation settles the capital balance.

The Act does not, however, state that the amount charged under section 45(4) of the Act can also be ascribed to capital assets that are part of a block of assets and are covered by these two sections.

Story first published: Sunday, July 4, 2021, 11:59 [IST]



[ad_2]

CLICK HERE TO APPLY

Leave a comment

4 Overnight Mutual Funds With Best Rating To Invest In India 2021 From Value Research Fund House

Personal Finance

[ad_1]

Read More/Less


DSP Overnight Fund

The DSP Overnight Fund is a two-year-and-five-month-old fund with an average yearly return of 4.34 percent since its inception. It has a AUM of 919.52 crores, and the most recent NAV declared is 1111.064 as of July 3, 2021. Through investments largely in overnight securities with a one-business-day maturity, the program strives to provide returns commensurate with minimal risk while also providing a high level of liquidity.

DSP Overnight Fund Direct – Growth scheme returned 3.11 percent in the last year and 11.09 percent since its inception. The Expense Ratio of the direct plan of DSP Overnight Fund is 0.1%. .The fund has 5-STAR rating from Value Research online.

Mirae Asset Overnight Funds

Mirae Asset Overnight Funds

These funds have a low chance of losing money, but they do not guarantee returns or capital protection. The Mirae Asset Overnight Fund is a one-year-and-eight-month-old fund with an average yearly return of 3.62 percent since its start. The NAV of Mirae Asset Overnight Fund for Jul 02, 2021 is 1,062.96. The Expense Ratio of Mirae Asset Overnight Fund’s direct plan is 0.1 percent. Mirae Asset Overnight Fund has an AUM of 311 crores. The fund has 5-STAR rating from Value Research online.

PGIM India Overnight

PGIM India Overnight

PGIM India Overnight Fund Direct – Growth is a PGIM India Mutual Fund Debt mutual fund scheme. This scheme was launched on August 27, 2019 and is currently managed by Kunal Jain and Kumaresh Ramakrishnan, the fund managers. It has a market capitalization of 155.11 crores, and the most recent NAV declared is 1070.755 as of July 3, 2021 at 4:20 pm.

PGIM India Overnight Fund Direct – Growth fund returned 3.16 percent in the last year and 7.04 percent since its inception. The minimum SIP amount for this scheme is Rs 1,000. TThe Expense Ratio of the PGIM India Overnight Fund’s direct plan is 0.1 percent.

Edelweiss Overnight Fund

Edelweiss Overnight Fund

Edelweiss Overnight Fund Direct – Growth is an Edelweiss Mutual Fund Debt mutual fund program. This scheme was created on July 23, 2019 and is currently managed by Rahul Dedhia and Gautam Kaul, the fund managers. It has a AUM of 408.72 crores, and the most recent NAV declared is 1076.259 as of July 3, 2021. Edelweiss Overnight Fund Direct – Growth program returned 3.14 percent in the last year and 7.60 percent since its inception. The minimum SIP amount for this scheme is Rs 500. The Expense Ratio of the direct plan of Edelweiss Overnight Fund is 0.1%. .

Taxation on Overnight Funds

Taxation on Overnight Funds

Overnight funds are taxed in the same way that debt funds are. Short-term capital gains tax applies to overnight fund units held for less than three years. Investors will be taxed in accordance with their income bracket. Long-term capital gains (LTCG) tax is imposed at a rate of 20% on units of overnight funds held for more than three years. The benefit of indexation is delivered to investors. Dividends paid from overnight funds are taxed according to the investor’s tax bracket.

Major Advantages

The fund is a good investment option for people who want to put their surplus money to work and generate a larger reward with less risk.

This fund is an open-ended liquid fund with a low risk profile. Its unique feature makes it an excellent investment for people with a low risk appetite.

Changes in the RBI’s interest rates, as well as changes in a borrower’s credit ratings, have little to no impact on such funds.

How Do Overnight Funds Work?

How Do Overnight Funds Work?

Fund managers buy overnight bonds in the overnight market at the start of each business day. These mutual funds, in turn, sell overnight funds to investors. These bonds or securities will mature or be redeemed the following business day. Furthermore, as a reinvestment, the funds would acquire more overnight bonds from redemption inflows, and so on. It’s important to note that the reinvestment is done at the new rate that applies the next day.

4 Overnight Mutual Funds To Invest In India 2021

4 Overnight Mutual Funds To Invest In India 2021

Fund Name Rating 1 year Return Expense ratio
DSP Overnight 5 STAR 3.11 0.10
Mirae Asset 5 STAR 3.18 0.11
Edelweiss Overnight 5 STAR 3.14 0.16
PGIM India Overnight 5 STAR 3.16 0.07

Disclaimer

Disclaimer

GoodReturns.in We are not a licenced financial advisor, and the information provided here does not constitute investment advice. Its purpose is to provide information. Readers and investors should be aware that neither Greynium nor the authors of the articles can be held liable for any decisions made as a result of reading them. Please seek the advice of a professional expert. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors are not liable for any losses or damages resulting from the use of information on GoodReturns.in.



[ad_2]

CLICK HERE TO APPLY

Leave a comment

Top Diversified Mutual Funds That Can Be Invested Into By Any Investor In 2021

Personal Finance

[ad_1]

Read More/Less


Investment

oi-Roshni Agarwal

|

Diversified mutual funds as the name suggest enables an investor to diversify his or her financial portfolio and can be invested by all retail investor class with a slight risk appetite as the basket of assets makes the fund a less riskier category. This we are making a comparison strictly to other equity funds which are thematic or sectorial in nature and cannot be opted in by every investor category being high on risk.

Top Diversified Mutual Funds That Can Be Invested Into By Any Investor In 2021

Top Diversified Mutual Funds That Can Be Invested Into By Any Investor In 2021

What is a diversified mutual fund?

These mutual fund invests across sector, market capitalization, geographies and even across asset classes and thus developments in one area help prevent a major impact on the entire fund.

1. Parag Parikh Flexi Cap Fund-Growth:

This flexi cap fund from PPFAS Mutual fund category has an asset size of Rs.10,276 crore. NAV is 43.31 as of July 2, 2021. The benchmark of the fund is Nifty 500 TRI and the fund over the 1-year period has given a return of 57.94 percent. SIP as well as the lump sum investment can be started at minimum Rs. 1000.
Value Research online has accorded a 5-star rating to the fund. Top holdings of the fund are Bajaj Holdings, ITC, Microsoft Corporation, Facebook, Persistent Systems.

2. Mahindra Manulife Multicap Badhat Yojana-Regular Plan-Growth:

This is a 4-star Crisil rated multi cap fund. Asset under management of the fund is Rs. 532 crore. NAV of the fund as on July 2 is 18.069. Top holdings of the fund comprise ICICI Bank, SBI, Infosys, RIL, Sun Pharma, Atul, Dalmia Bharat and Birla Soft among others.

Benchmark for the fund is S&P BSE 500 TRI. Expense ratio of the fund is 0.77 percent. SIP in the fund can be started for Rs. 500. With a monthly SIP of Rs. 10,000, the investment is now valued at Rs. 5.91 lakh, providing an annualized yield of 35.07%.
Top holdings of the fund include ICICI Bank, Infosys, SBI, RIL, Sun Pharma, Larsen and Toubro, Atul Ltd.

3. SBI Large and Midcap fund:

Erstwhile, SBI Magnum Multiplier fund is a large and mid cap fund from the house of SBI Mutual fund. The AUM of the fund is equivalent to Rs. 4083 crore. Risk-o-meter defines the fund to be moderately high on risk.

NAV of the fund as on July 2 is 333.89. SIP in the scheme can be started for as low as Rs. 500.

Value Research Rating has given the fund a 3-star rating.

Top holdings of the fund include HDFC Bank, Page Industries, ICICI Bank, SBI, Relaxo Footwear etc.

In 3 years time, the SIP of Rs. 10000 per month is now valued at Rs. 5.41 lakh, providing gains of Rs.1.81 lakh, i.e.an annualized yield of 28.43%.

Note mutual funds investment are subject to risk. Investors need to do their own research to select the suitable investment considering their risk profile, investment goal and investment horiozon. The story is here only for informational purpose. Greynium Information and its employees shall not be liable for any loss incurred for any investment decision taken considering the above listicle.

GoodReturns.in



[ad_2]

CLICK HERE TO APPLY

Leave a comment

7 Best Recurring Deposits With Interest Rates Up To 8%

Personal Finance

[ad_1]

Read More/Less


North East Small Finance Bank Recurring Deposit

Recurring deposits are available from North East Small Finance Bank, with periods ranging from three months to ten years. For the general public, interest rates on RD vary from 4.25 per cent to 7.50 per cent, while rates for the elderly range from 4.75 per cent to 8.00 per cent. These rates are in effect from 1st September 2020.

Tenure Regular FD Rates Senior Citizen FD Rates
3 Months 4.25 4.75
6 Months 4.5 5
9 Months 5.5 6
1 Year 5.5 6
2 Year 7.5 8
3 Year 7 7.5
4 Year 7 7.5
5 Years 6.5 7
More than 5 years up to 10 years 6.5 7
Source: North East Small Finance Bank

Utkarsh Small Finance Bank Recurring Deposit

Utkarsh Small Finance Bank Recurring Deposit

Utkarsh Small Finance Bank provides recurring deposits with a tenure ranging from 6 months to 10 years. Currently, this bank is providing the highest interest rates among the small finance banks. For the general public interest rates on RD ranges from 6.50% to 7.00%, whereas for senior citizens the interest rates range from 7.00% t0 7.50%. These rates are in force from July 1, 2021.

Tenure Regular FD Rates Senior Citizen FD Rates
Up to 6 months 6.50% 7.00%
9 months 6.50% 7.00%
12 months 6.75% 7.25%
15 months 6.75% 7.25%
18 months 6.75% 7.25%
21 months 6.75% 7.25%
Above 21 Months to less than 24 Months 6.75% 7.25%
24 Months to 36 months 7.00% 7.50%
Above 3 Years up to 5 Years 6.75% 7.25%
Above 5 years up to 10 years 6.75% 7.25%
Source: Utkarsh Small Finance Bank

Jana Small Finance Bank Recurring Deposit

Jana Small Finance Bank Recurring Deposit

Jana Small Finance Bank offers recurring deposits with terms ranging from one month to one hundred and twenty months. Interest rates on RD range from 4.00 per cent to 6.75 per cent for the general public, whereas rates for elderly persons range from 4.50 per cent to 7.25 per cent. These rates are in effect from June 10, 2021.

Tenure Regular FD Rates Senior Citizen FD Rates
> 1 Month – 6 Months 4.00% 4.50%
> 6 Months – 12 Months 5.50% 6.00%
> 12 Months – 36 Months 6.50% 7.00%
> 36 Months – 60 Months 6.75% 7.25%
> 60 Months – 120 Months 6.00% 6.50%
Source: Jana Small Finance Bank

Fincare Small Finance Bank Recurring Deposit

Fincare Small Finance Bank Recurring Deposit

Fincare Small Finance Bank provides recurring deposits with periods ranging from seven days to eighty-four months. The interest rate on RD varies from 3.00 per cent and 6.50 per cent. With effect from 17 May 2021, these rates are in force.

Tenure Interest Rates In %
7 days to 45 days 3.00%
46 days to 90 days 3.25%
91 days to 180 days 3.50%
181 days to 364 days 5.00%
12 months to 15 months 5.60%
15 months 1 day to 18 months 5.60%
18 months 1 day to 21 months 6.00%
21 months 1 day to 24 months 6.00%
24 months 1 day to 30 months 6.25%
30 months 1 day to 36 months 6.25%
36 months 1 day to 42 months 6.50%
42 months to 48 months 6.25%
48 months 1 day to 59 months 6.25%
59 months 1 day to 66 months 6.00%
66 months 1 day to 84 months 5.50%
Source: Fincare Small Finance Bank

Suryoday Small Finance Bank Recurring Deposit

Suryoday Small Finance Bank Recurring Deposit

Suryoday Small Finance Bank offers recurring deposits that last anywhere from six months to ten years. For both the general public and elderly individuals, the interest rate on RD ranges between 4.75 per cent and 6.75 per cent. These rates are in force from June 21, 2021.

Tenure Regular FD Rates Senior Citizen FD Rates
6 months 4.75% 4.75%
9 months 5.25% 5.25%
12 months 6.50% 6.75%
15 months 6.50% 6.75%
18 months 6.50% 6.75%
21 months 6.50% 6.50%
24 months 6.50% 6.50%
27 months 6.25% 6.50%
30 months 6.25% 6.50%
33 months 6.25% 6.50%
36 months 6.25% 6.50%
Above 3 Years to less than 5 Years 6.75% 6.75%
5 Years 6.25% 6.50%
Above 5 Years to 10 Years 6.00% 6.00%
Source: Suryoday Small Finance Bank

Equitas Small Finance Bank Recurring Deposit

Equitas Small Finance Bank Recurring Deposit

Equitas Small Finance Bank provides recurring deposits with periods ranging from 12 to 120 months. For the general public, interest rates on RD vary from 6.35 per cent to 6.50 per cent, while rates for senior citizens range from 6.85 per cent to 7 per cent. These rates are in force from June 1, 2021.

Tenure Regular FD Rates Senior Citizen FD Rates
12 Months 6.35% 6.85%
15 Months 6.35% 6.85%
18 Months 6.35% 6.85%
21 Months 6.25% 6.75%
24 Months 6.25% 6.75%
30 Months 6.35% 6.85%
36 Months 6.35% 6.85%
48 Months 6.25% 6.75%
60 Months 6.25% 6.75%
90 Months 6.50% 7.00%
120 Months 6.50% 7.00%
Source: Equitas Small Finance Bank

Ujjivan Small Finance Bank Recurring Deposit

Ujjivan Small Finance Bank Recurring Deposit

Ujjivan Finance Bank offers recurring deposits with terms ranging from six to one hundred and twenty months. Interest rates on RD range from 5.20 per cent to 6.75 per cent for the general public, and from 5.7 per cent to 7.25 per cent for elderly persons. These rates are in force from 5 March 2021.

Tenure Regular FD Rates Senior Citizen FD Rates
6 months to 9 months 5.20% 5.70%
12months to 24 months 6.50% 7.00%
27 months to 36 months 6.75% 7.25%
39 months to 60 months 6.75% 7.25%
63 months to 120 months 5.80% 6.30%
Source: Ujjivan Small Finance Bank



[ad_2]

CLICK HERE TO APPLY

Leave a comment

Tax Query: Will mutual funds issue Form 16A for TDS on dividend?

Personal Finance

[ad_1]

Read More/Less


I have invested around ₹4 lakh in some mutual funds, all regular plans with dividend options. They have deducted tax on the dividend amounts paid during this financial year 2020-2021. My question is whether the funds will issue Form 16A and whether the details of taxes deducted and remitted to the Government will be reflected in Form 26A of the Tax Department. Can I claim refund of the tax so deducted on filing my return of income?

J R RavindranathYes, the mutual fund company is required to issue Form 16A in respect of tax withheld on dividends. Further, the taxes deducted will be reflected in your Form 26AS. While you can offset the taxes deducted at source against your tax liability, you are required to offer the gross dividend income earned during the FY to tax under the head “Income from other sources”. Effective April 1, 2020, the dividend income is taxable in the hands of investors at the applicable slab rates. Further, tax would be deducted at 10 per cent as laid down in Section 194K of the Income-tax Act, 1961. The said rate of 10 per cent has been reduced to 7.5 per cent for all the dividend payments made from May 14, 2020 till March 31, 2021 due to Covid-19. Should your tax liability be lower than the TDS, refund can be claimed while filing your India tax return for the FY 2020-21.

The writer is Partner, Deloitte India

Send your queries to taxtalk@thehindu.co.in

[ad_2]

CLICK HERE TO APPLY

Leave a comment

Planning for son’s education, own retirement

Personal Finance

[ad_1]

Read More/Less


Nishant is 36 and works with an IT company in Pune. He has a 5-year-old son. Until now, he has focussed his energies on repaying the home loan, which he repaid completely 2 months back. Thus, he does not have many investments. In addition to this house, he has Rs ₹ 5 lakh in fixed deposits and ₹13 lakh in employees’ provident fund.

His net take-home monthly salary is ₹80,000. He can invest about ₹35,000 per month. Besides, his monthly contribution to EPF account, including employer contribution, is ₹11,500.

He wants to invest for his son’s higher education, for which he thinks he will need about ₹20 lakh (present cost) after 12 years. Besides, he wants to save for this retirement. He has not bought any insurance plan yet.

Buying insurance

Insurance is the first pillar of financial planning. In his case, getting insurance portfolio right is even more critical since he is the sole earning member in the family. There are three broad types of insurance plans that every earning member must buy: Life, Health and Accidental Disability Insurance.

While there are many ways to calculate life insurance cover requirement, a simple thumb rule is to buy a cover for 10-15 times the annual income. With his level of income, he can go for a life cover of ₹ 1.25-1.5 crore.

A term insurance plan is the best way to purchase a life insurance. This will cost him about ₹18,000-20,000 per annum. He can choose to pay annual premium in monthly installments too.

He has a health cover of ₹3 lakh from his employer. The coverage is clearly not sufficient for a family of three. He must buy a family floater health insurance plan of ₹10 lakh. That will cost him about ₹15,000 per annum.

He can buy accidental disability cover as a rider with a term plan or as a standalone plan. A rider with the term plan is cheaper because the scope of coverage is limited to total and permanent disability.

A standalone plan is more expensive, but it covers both partial and total permanent disability, temporary disability, and accidental death.

These insurance plans (life, health and accidental cover) will cost about ₹5,000 per month or Rs 60,000 per annum.

He has a fixed deposit of ₹5 lakh that can be considered towards medical and emergency fund.

Son’s education

For son’s education, he needs ₹20 lakh (present cost) in 12 years. At the inflation rate of 6 per cent per annum, the target nominal corpus will be ₹40 lakh in 12 years.

Assuming a return of 10 per cent on the portfolio over 12 years, he needs to invest ₹15,000 per month.

He can put this money into a hybrid fund or a multicap fund by way of SIP. He must gradually shift this money to debt as he moves closer to the goal.

For his retirement, he mentions that only 2/3rd of his current expenses will continue into retirement.

His current expense is ₹45,000 per month but that includes conveyance and school and tuition fee for his son.

His expected expenses during retirement will be ~ ₹30,000 per month (cost). Assuming a post retirement life of 30 years, inflation of 6 per cent per annum and that he can earn inflation matching returns during retirement, he needs to accumulate ₹4.3 crore in 24 years.

His current EPF corpus will grow to ₹80 lakh in 24 years . At assumed pre-retirement return of 10 per cent per annum, he needs to invest ₹32,000 per month.

He is already putting ₹11,500 per month by way of EPF. After accounting for regular expenses, insurance payments and investment for son’s education, he can invest an additional ₹15,000 per month (35,000 – 5,000 – 15,000).

His retirement portfolio is already debt heavy. He can split this amount between a largecap fund and a midcap fund, with heavier allocation to the former. He is investing less than he should. He must invest more when his cashflows permit. This should not be a problem since his best earning years are ahead of him.

He must understand all the goal calculations above are based on heavy assumptions about inflation and expected returns.

He must keep revisiting these assumptions and portfolio growth and make adjustments accordingly.

The writer is a SEBI-registered investment advisor and founder of personal financeplan.in

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , ,

Reserve Bank of India – Tenders

Tenders

[ad_1]

Read More/Less


A Pre-Bid meeting in connection with tender No. RBI/Kanpur/Estate/469/20-21/ET/719, which was floated on both MSTC and RBI’s website on June 04, 2021 for the captioned work, was conducted at 11.00 AM on July 02, 2021 at Estate Department, 2nd Floor, RBI Kanpur. The said meeting was held by following COVID appropriate behaviour by all the members. List of participants is placed below.

2. After welcoming all the members, Shri PP Paul, AM (Tech. Civil) explained tender documents and important timelines of the tendering process in brief and requested members to clarify doubts, if any. Following queries / doubts were clarified during the meeting:

S. No. Relevant paras /clauses in the Tender Documents Query Clarification
a) Item-4 of Part II Unpriced Bid How the balancing laminate will be fixed in inner side? In response, it has been clarified that the plywood used shall be fixed balancing laminate first at one side and then it would be fixed on the MS frame
b) Item-10 of Part II Unpriced Bid How many doors are there taken in estimate? In response, the number of doors were told along with dimensions:
No. of Doors: 01
Dimensions: 1.1 mt. X2.1 mt
c) Item-11 of Part II Unpriced Bid How many doors are there taken in estimate? In response, the number of doors were told along with dimensions
No. of Doors: 04
Dimensions: 1.1 mt. X2.1 mt
d) Item 1-1 of Part II Unpriced Bid Clarification regarding the item description – “Stacking of materials at the site having scrap value.” In response, it has been clarified that the materials which has come out from the dismantling work, if found in good condition, that has to be stacked separately and shall not be disposed off.
e) General Specifications for items Clarification regarding submission of cash-memo/vouchers of the materials. In response, it has been clarified that the vouchers for the items having basic rate mentioned in specification should be produced invariably during settlement of bills.

3. All the above points were noted and agreed by the firm.

4. The meeting ended with thanks to all the members.

Note:

  • This document (minutes of the Pre-Bid Meeting) shall form a part of the tender.

  • Rest of the terms and conditions and specifications of the bid document shall continue to remain same.

  • The above amendments/ clarifications are issued for the information for all the intending bidders.

  • The submission of bid by the firm shall be construed to be in conformity to the bid document and amendments/ clarifications given above.

Regional Director
Reserve Bank of India
Kanpur

List of participants

Sr No Name Designation
1 Shri P.P. Paul Assistant Manager (Tech. Civil), Estate Department
2 Shri Vinayak Agrawal Assistant, Estate Department
3 Shri Sushil Awasthi Representative from M/s Shri Kamadgiri Traders

[ad_2]

CLICK HERE TO APPLY

Leave a comment

RBI warns against combination of high public debt, low interest rates, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


New Delhi: As economies around the world witness ultra-low interest rates and rising public debt amid the pandemic, the Reserve Bank of India (RBI) has said that the combination would pose challenges.

The pandemic response saw a tight interaction of monetary and fiscal policy. As monetary policy has sought to control a larger segment of the yield curve, the overlap with public debt management has grown, noted RBI’s Financial Stability Report for July.

It noted that with monetary policy committed to an easy stance for some time in many countries, the fiscal stance becomes important.

Too loose a fiscal stance could cause inflation surprises and financial conditions could tighten, it said, adding that a more constrained fiscal policy would add pressure on monetary policy.

“It would test the efficacy of further monetary expansion and could heighten intertemporal tradeoffs,” it said.

The extraordinary combination of high debt-to-GDP ratios and ultra-low interest rates raises three challenges, said the central bank’s report, with the first being the risk of fiscal dominance.

Further, it may also lead to a situation where fiscal positions may ultimately prove unsustainable and the complications of the possible joint “normalisation” of fiscal and monetary policies would also crop.

Growth-friendly fiscal policy, the RBI suggested, can help by effectively targeting public infrastructure and productivity.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

How to claim from multiple health plans

Personal Finance

[ad_1]

Read More/Less


Since the outbreak of pandemic last year, many individuals have considered purchasing a health policy for self as well as for family. While having one health policy with sufficient cover based on individual or family needs is adequate, many end up having multiple health policies. Usually, as policyholder you will have a group cover from your employer and an individual health cover (as the group cover offered may not be sufficient) or in some cases, it can be two separate policies from different insurers. At the time of claim, if you are among those individuals with two or more health policies, here is how you should go about the claim.

One by one

Almost all insurers have wide hospitals under their network to make cashless facility hassle free for the policyholders. Barring a few scenarios, including certain treatment or diseases not covered by the policy and treatment taken in a non-network hospital, your health policy should be able to meet the hospitalisation expenses for you (cashless). But irrespective of the number of policies, you can make one claim at a time only, be it cashless or reimbursement. This is because insurers require policyholders to submit the original bills while filing a claim.

Suppose you have two health policies and you want to have cashless under both, then you must indicate to the hospital or the TPA about this. Many insurance experts suggest that it is better to exhaust the sum insured of one policy before claiming from another. Priya Deshmukh Gilbile, Chief Operating Officer, ManipalCigna Health Insurance, says “In case of a cashless claim, with the same TPA, the co-ordination for two or more policies become easier. Even if the TPAs are different for the policies held by policyholder, cashless can be done. The approval letter from the first insurer has to be submitted to the second insurer for the remaining claim amount”

However, there could be practical difficulties when it comes to cashless claims from multiple insurers. According to Indraneel Chetterjee, Co-Founder, RenewBuy “While cashless facility from multiple policies is doable by TPA/insurer, there could be a little struggle in terms of co-ordination between the TPA, insurer and the hospital due to incremental operational work.”

Hence you can also plan your claim (medical expenses) part cashless and part reimbursement. Suppose you have two policies of ₹5 lakh each and your expenses work out to ₹6 lakh. In this scenario, up to ₹5 lakh, the hospital/TPA will co-ordinate with the insurer. For the balance amount of ₹1 lakh, you as policyholder need to submit the bills given by the hospital along with discharge summary (which will mention the claim covered) to the other insurer for reimbursement. It could help you have a smooth claim procedure and avoid unnecessary delay at the time of discharge or while starting a treatment.

Keep in mind

While having multiple health policies has its advantages, there are a few points to keep in mind, when making a claim, in order to reap the maximum benefits.

One, you should go for the policy which has minimum or no co-payment (where policyholder agrees to pay a certain percentage of medical expenses and the balance paid by the insurer) or sub-limits (refers to the limits for a certain medical treatments or diseases in a policy) clauses. This is so that the difference between medical bills and claim amount (settled by insurer) is low. If you have to choose between a group cover and an individual health cover, then go for group health insurance first. This is because, the benefits of no-claim bonus remains intact.

Two, it is important to disclose to each insurer about the multiple policies you hold, if specifically asked in the proposal form at the time of purchase of health policy. The non-disclosure of the other policies may affect at the time of claim as it is a breach of (insurance) contract and insurer have the right to reject or not settle your claim. However, not many insurers ask for this disclosure these days.

Lastly, while there is no cap on the number of health policies that you can buy, the premium amount you shell out for every renewal could be high for all the policies. Amit Chhabra, Head Health Insurance, Policybazaar.com says “For policyholders it is better to have a base policy and then have top-up plans from the same insurer, as it will work out to be affordable and for easier claim, instead of having separate policies from different insurer. ”

Exhaust sum insured of one policy before claiming from another

Divide claim into cashless, reimbursement

Have base policy and top-up plan from the same insurer

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Where to park your equity profits

Personal Finance

[ad_1]

Read More/Less


Of late, a chorus of market voices have piped up to say that global stock prices are in bubble territory. The RBI recently described the Indian stock market as a bubble. Bubble or no bubble, there can be no disputing that after the breathless rally of the last five years, Indian stock valuations are very expensive. If you’re sitting on hefty equity gains or high equity allocations, this makes it prudent to book some profits on your equity portfolio. But a practical problem that stops many folks from booking equity profits is not knowing where to invest those gains.

We suggest dividing your gains into three buckets and recommend suitable investment products for each bucket.

Capital protection bucket

If the stock market rally has made a significant difference to your overall wealth, you may want to convert some of those paper gains into real money, to meet your short-term or long-term financial goals. In this case, you should primarily look for safety of your capital in re-investing your equity gains.

Market-based bond investments today carry both credit and duration risk (the risk of default because of Covid and the risk of capital loss from rising rates). Indian government-backed sovereign instruments offer protection from both.

If you are looking to set aside equity gains towards long-term goals such as retirement that are at least seven years away, GOI’s Floating Rate Savings Bonds sold by RBI on tap via leading banks, offer the rare combination of good returns with capital safety. The bonds’ floating interest is pegged at a 35-basis point premium to the prevailing rate on the National Savings Certificates. For the April-June quarter, this interest was 7.15 per cent.

The floating rate makes this a good bet in a rising inflation/rate scenario. The only disadvantage of the bonds is that it offers no compounding and only pays out interest. The bonds also carry a 7- year lock-in and are not tradeable. A second sovereign-backed option is the five-year National Savings Certificate (NSC) from India Post. While rates are reset quarterly, you get to lock into a specific rate for five years. NSC currently offers lower rates of 6.8 per cent than the GOI savings bonds. But it allows accumulation of interest and has a shorter lock-in of 5 years.

For goals that are 5-7 years away, passive debt ETFs that invest in government securities are good options. IDFC Gilt 2027 Index Fund, IDFC Index 2028 Index Fund and Nippon ETF 5-year Gilt ETF are such funds that can get you to a fairly predictable return by those target dates.

If you need the money within the next 3-5 years, you can consider gilt mutual funds with a short maturity (there aren’t too many of them but Axis Gilt is one) or PSU & Banking funds with short maturity (Axis, UTI and IDFC have less than 2-year average maturity). These may not be as safe as sovereign instruments, but do offer liquidity with a fair degree of capital protection.

Diversification bucket

Some folks may book profits in their equity holdings not because they need the money to meet any goals, but simply to de-risk their portfolios. If you work to a pre-decided asset allocation pattern (as all investors should) and have seen your equity allocations overshoot your comfort level, you should invest your equity gains in long-term options that help you diversify from equity risks.

Two options to consider are Sovereign Gold Bonds and REITs. Gold is one asset class that has lagged during the concerted rally in stocks, bonds and commodities recently. It also tends to deliver gains when stock prices tank. Sovereign gold bonds, bought either from primary issuances by RBI or in the secondary market, therefore present a good option to park some of your equity gains. Gold ETFs can be an alternative.

Real estate too has delivered rather muted performance in India in the last few years and therefore makes for a good diversifier. REITs or Real Estate Investment Trusts are a good proxy for commercial real estate investments, through a regulated, divisible and liquid vehicle. Listed REITs such as Embassy Office Parks and Mindspace own a portfolio of office complexes from which they earn rents from high-quality clients.

Liquidity bucket

You may have every intention of getting back into equity markets when a big correction materialises and valuations cool down. Such corrections and also the reversals from them, can be swift and sharp. Re-deploying your money into equities after such corrections would be impossible if you lock all your equity gains into instruments such as GoI bonds, NSC or even SGBs.

To keep powder dry for such a re-entry, apart from Gilt and PSU/Banking debt funds mentioned above, Liquid Bees or other Liquid ETFs (ETF which invest only in safe money market instruments) are a good option. These funds carry a constant NAV while declaring their returns as daily dividends, which are credited as fresh units in your demat account.

Fixed deposits with leading banks, which can be instantly liquidated online, are just as good for this purpose. These aren’t high-return or tax-efficient options but keep your money safe for quick re-deployment.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,
1 … 612 613 614 615 616 … 16,278