Prajna Capital |
- Tax Treatment of money received from Insurance Company
- Investment in Real Estate
- Checklist for Renting out your house
| Tax Treatment of money received from Insurance Company Posted: 23 May 2013 02:53 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Generally people perceive that all monies received from Insurance Companies are exempt. This is not so. Section 10(10) provides for exemption for money received from insurance company in respect of insurance policy. First amount received in respect of all Key man Insurance policies are taxable. Secondly money received on death in respect of all the life insurance policies are exempt except those issued as key-man's insurance policy. In respect of money received from Insurance Company other than in the event of death on all life insurance policies issued prior to April 1, 2003 will also be exempt from tax. However in respect of life insurance polices issued on or after April 1, 2003 but before March 31, 2012, money received from insurance company, other than on death, shall become taxable if premium payable in respect of this policy exceeds 20% of the sum assured in any of the year. However in respect of policies issued after March 31, 2012, the same will become taxable in the hands of recipient if the premium in respect of such policies exceeded 10% of the sum assured in any year.
In addition to above any money received in case of life insurance policy purchased for maintenance of physically disabled person under Section 80DD if such person dies before the proposer the money received by the proposer shall also be taxable. So from the above discussion it becomes amply clear that you should take into account various factors before you buy any life insurance policy so that the premium paid is allowed and the money received in respect of such insurance policy is does not become taxable.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Posted: 23 May 2013 01:56 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India) Nowadays everyone is talking about investing in real estate.
It's very true that in India real estate sells like hotcakes.
If you are looking for buying a property you may either be buying it for residential or commercial use or you may be buying it as an investor. Since the objectives are different, the selection criteria may vary from buyer to buyer.
Let us further clarify and assess the investments.
You must evaluate the property on the following points:
My client bought a flat six years ago in the suburbs of Mumbai for 20 lakhs. It is valued at 50 lakhs today, he very happily tells me. What a smart decision he took at that time; his property is now worth 50 lakhs! But really is it so? I asked him how he would benefit by this appreciation in value. Even if he wants to encash on it, he has to find a new house for himself, which will cost the same amount or even higher. He doesn't have an answer for this. So as a rule, a residential flat is not counted as an asset!
2. As a Investor :
Importantly, most people tend to overlook the 'holding cost' of the property. Whenever you buy property, you have to pay property tax, maintenance charges, minimum water and electricity charges, along with extra amenity charges; these we term as the 'holding cost.' You must consider this 'holding cost' along with the EMI or lump sum payment as an outflow towards the property. What most investors tend to do is take into consideration only their investment in the property in terms of EMI. They tend to overlook the holding cost, which can skew the investment equation in the long run. Remember your total holding cost with EMI should not be more than 30% of your monthly income!
If you have done comprehensive financial planning and according to asset allocation if it is required to invest in real estate, then surely go for it. If not, then regular investment in equity-linked mutual funds not only gives you good returns, it can also give you liquidity.
We need to understand that the 'demand and supply' concept applies to real estate too. If the demand is more than the supply, the prices shoot up, but the moment the supply increases vis-à-vis the demand, the prices slide down. Take the example of onions; at one point in time they were priced at Rs. 90 per kg, while today they are available at Rs. 10 per kg.
The same principle applies over here too. Today (as per our findings) there is a 'pseudo' demand. On reality check, most of the apartments/flats are vacant and without customers. It could fast become a dead investment in the future. In the past it has taken more than 6 years for the prices to take off again and start giving returns. For some investors, it took that much time for them to be able to just get their money out. Therefore, investment decisions depend on your sustaining capacity too.
Returns are a very relative term; you should look for what is best suited for you. You should have a sound investment plan keeping in mind your short term and long term goals and then act accordingly.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Checklist for Renting out your house Posted: 22 May 2013 11:47 PM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Though renting out your house sounds like a big responsibility, the payoffs are often large. With a little research and preparation, you could rent your property for a fair price and protect your valuable investment, too. Considering the increasing property values, renting out a place and staying on rent could both help save big sums of money. As renting out a place means additional income, many senior citizens consider renting out a room or two in their flats.
There are various ways to go about this. A look at the factors to consider before renting out your house:
Computing the rent
What you get depends on many factors —the amenities provided, the maintenance fee and demand for the property. After considering these, one would arrive at an approximate rent in that area. Additionally, one can bargain for better rent, depending on the weightage of these factors. In other words, you could ask for a higher rent if your society allows the tenant to use amenities such as gyms, swimming pools, etc. Besides, your broker could easily help you find the current rent rates in your area. However, real estate experts say it isn't always necessary to abide by the broker's word; one should be satisfied with the rent he gets.
The rent one expects for a residential flat is only two to three per cent of the property's annual capital value. A terrace, a furnished flat, a modular kitchen, good wooden fixtures, etc, could help you increase the rent for the flat. If the maintenance fee charged by your society is high, owing to various facilities provided, the rent could either rise or fall, depending on whether the society allows tenants to avail of these.
These factors can add value to rent, especially in a down market, when tenants are selective because of the increased availability of rental homes and their expectations are much higher.
Background check of the tenant
It is extremely important to do a background check of the tenant before allowing him/ her to use your flat. This is because the tenant is also responsible for keeping your flat in good condition.
To be safe, it is best to check for minute details of your society and its by- laws. For instance, some housing societies deny tenancy based on a person's eating habits or his/ her marital status. Real estate experts say tenancy can be denied only if the qualifying conditions are stated in a society's bylaws.
One should also check important details such as the tenant's current job, the contact details of family members and the number of people who would occupy the house. Also, keep a photocopy of his identity proof and verify this with his previous landlord.
Preparing documents
After you find a tenant, you have to prepare a ' rent agreement', with the broker's help. The broker would also help carry out tedious errands such as the tenant's police verification and registration of the lease agreement. Police verification and registering the agreement could take up to eight- 10 working days each. One cannot rent out a flat without completing these formalities.
Every city has a preplanned rent agreement. Since documentation takes time, one should keep this ready as soon as he/ she decides to rent out his apartment. Ideally, the tenant is expected to pay only the electricity bill of the house; property tax, maintenance, stamp duty and registration fees are to be borne by the flat owner. The deposit money, the rent payment mode, the type of agreement, the description of property and the tenure of stay are a few things the agreement should contain. The facilities the tenant is liable to pay for should be clearly mentioned in the agreement.
Fearing misuse, most house owners don't rent out their houses.
However, if your rent agreement is intact, you could add relevant clauses in the agreement that would ensure the damages incurred ( if any) are paid for. A similar legal process and a leave and licence agreement would have to be prepared by anyone who wishes to rent out even a single room of his apartment.
Vacating a house
The tenant and the flat owner should give each other a prior notice of three to six months if they want to terminate the contract. If the tenant damages the property in any way, doesn't pay his electricity bills or does anything outside the contract, as an owner of the house, you could deduct the stipulated amount from his deposit. If the tenant refuses to vacate the flat, you could file a police complaint. In case of breach of contract, it might take two to three months to resolve such cases, depending on the seriousness of the complaint.
While renting out a flat is the flat owner's decision, the housing society in which the flat is located may have a say in the matter. Individual societies are legally empowered to deny tenancy, based on their by- laws. However, the conditions concerned aren't stated in the society's by- laws, one can dispute these.
Some societies may charge flat owners extra maintenance fee if the tenant uses the amenities
The leave and licence agreement should contain the following clauses:
Licence fee: Quantum, due date & consequences of delay/ non- payment of rent
Security deposit: Quantum and refund provisions on termination/ expiry of agreement
Taxes, whether inclusive or exclusive of licence fee
Charges: Who would pay for electricity, water, maintenance and parking
Term of the agreement, as well as renewal ( if any) to be clearly defined |Lock- in period ( if any) agreed between the parties
Termination provisions of both parties
Liquidated damages for breach of obligations, including failure to vacate after termination/ expiry of agreement
Alienation rights of the licensor
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| You are subscribed to email updates from Prajna Capital - An Investment Guide To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment