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CHR
660

So it's that time of the year again and I need to invest Rs.1 Lakh in insurance, get 20,000 worth of bonds and 15,000 worth of health insurance.
Can people please suggest from experience which methods are the most secure while giving adequate returns with minimum lock-in period?
Please suggest for all three heads - and also let me know if I missed anything.
Regards,
Sid

From India, Gurgaon
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Boss2966
Industrial Relations
CHR
Founder Cite.co
Pon1965
Construction
+1 Other

CHR
660

Thanks Neha,
That was great help. Basically for PPF and any single premium policies we do not have any limit and we can put in the whole amount of Rs. 1 Lakh which is tax deductible. Plus get bond of Rs.20K.
Is the mediclaim included in the 1 Lakh or is it considered separately?
So in all we can deduct Rs. 1,20,000 - which can be shown as investments in these products.
I am also curious about a term plan - one of my friends, who is a financial adviser, was talking about how we should segregate risk cover investment and growth fund investment.
Do you or anyone has any insights on that?
Regards,
Sid

From India, Gurgaon
pon1965
604

The budget is silent on 20K (80CCF) on infrastructure bonds. Let us wait and see for the notification. Hope the govt will not change the provisions made in 2011-12 budget. Pon
From India, Lucknow
boss2966
1166

Dear Mr. Roy

Minimum Lock in period for Section 80C is only Mutual Fund (Three Years), - maturity value differs subject to Market Fluctuations.

Any ULIP maturity value is also depending on Market fluctuation.

Post Office NSC is giving assured returns, Its annual Interests also attracts every year tax exemption under section 80C. But minimum Lockin Period is 6 years.

If we have Children School/College Fee paid receipt, that too can be shown for Section 80C.

Normal Insurance Premium Receipts also can be shown for Section 80C.

The Housing Loan Principal also will have exemption under Section 80C.

Under Section 80CCF (Long Term Infrastructure Bonds) for this financial year also we can invest Rs.20000/- in addition to Rs. 100000/- under sec 80C. Please note that the investment of Rs.20000/- under Section 80CCF (Long term Infra Bonds) is not available for FY 2012-13.

We can take Health Insurance and Mediclaim Policy for self and family for amounting to Rs.15000/- and if we have any physically challanging dependents then we can take for Rs.20000/- under Section 80D.

Whatever we are donating for CM /PM Relief Fund will get 100% Tax Exemption under Section 80G and if we donate to any Charitable Trust then that amount will get 50% Tax exemption under section 80G.

Let us expect more from our learned members in this subject.

From India, Kumbakonam
CHR
660

Thanks Bhaskar,
I have decided to get a term insurance. I have one more question related to this - does the death benefits of the term insurance help in securing a bigger loan when it comes to home loans?
Regards,
Sid

From India, Gurgaon
boss2966
1166

Dear Mr. Roy
The Term Insurance is entirely different. Normally the term insurance is meant for the Death benefit coverage only and not for any other purpose.
The LIC will secure their Housing Loans by adding Insurance Policy for the amount equallent to the Home Loan in addition to the Original House documents. But for Banks, they will have the Original House Document as their security.
As the term policy is normally for one year and only on death the benefits will be given to the legal heir/Nominee, further it will lapse until we pay further premiums, it will not secure us more home loan.
Let us expect some experts' reply on this subject.

From India, Kumbakonam
CHR
660

Hi Bhaskar,

You are correct - I confirmed this with my home loan manager. He said that usually banks have their own partnerships with insurance companies and they can get a term cover for the loan amount and in case of the borrower's death then the loan amount is paid by the insuring company. Somehow they won't consider a term insurance taken individually - which is probably some bank policy.

So basically any individual term insurance will not get any home loan benefits but just get you risk cover. Like for example I am getting a risk cover of 1.5cr for a yearly premium of Rs. 57,000 from LIC. A friend suggested that I go with LIC even though the premiums are on a higher side - simply because they are more trust worthy as a company compared to all the private insurance companies that have mushroomed. He says LIC claims are handled better and the company creates no hassles if everything was mentioned properly in the policy. Like for example, if you smoke and you don't mention it - that could be a problem - if say you die of lung cancer. Both accidental and natural death have the same assured amount benefit.

Regards,

Sid

From India, Gurgaon
pon1965
604

Post budget 2011-12, under New Pension Scheme, contribution to NPS upto 10% of Basic + DA under CTC debit (Employer Side) is tax exempted. This exemption is out out of the purview of 80 CCE. i.e. this exemption is in addition to 1.00 L u/s 80C.
Pon

From India, Lucknow
boss2966
1166

Dear Mr. Pon The Tax exemption is for employer, i.e., for the corporate companies. It is not on any employee and one cannot show it as exemption under any section of IT Act.
From India, Kumbakonam
kraviravi.kravi@gmail.com
113

@ Pon Sir,

Is the NPS for private employees or only Govt employees.

@ Sid,,, hi how r u .

you can take benefit of only (100000-Your PF Contribution ) under Sec 80C.

Under Sec80C, for heads, all members have alredy mentioned the options except the most secure BANK FIXED DEPOSIT for 5 YEars take bank FD of any nationalised bank eg SBI, for 5 years and that amount exempt under Sec 80C.

Under Sec 80D Medical Ins Premium, you can claim total 35000 (15000 - Self Dependants) 20000 - for parents if parents are senior citizens, else 15000 for parents if they are not SS, now age above 60 is Senior Citizen

Sec 80CCF infra bonds,

What about HRA (House Rent Exemption) ? that are you doing?

and one advice,,

rather than just investing blindly to SAVE TAX, it is better to PAY TAX. In my office many employees just leave the investments like that, they say for saving 3000Rs if i need to invest 30000 i better not invest, that is also very bad, so plan your financials as per your need and requirement so that tomorrow you may not feel that it would have been better if you would have paid the tax, rather than lock the capital in some funds, MF etc, esp MF have risks

From India, Madras
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