Friday, August 2, 2013

Prajna Capital

Prajna Capital

Health Insurance - How to Port your health insurance policy

Posted: 02 Aug 2013 05:13 AM PDT

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 



Issues to look at before you switch Health insurers

 

Anand Rao, 42, was suggested by his insurance advisor to switch his health- insurance policy to a new insurer under the portability guidelines applicable since 1st October 2011. Since the benefits and features offered by the new insurer were better, Mr Rao applied for portability nearly 45 days before his policy was due.

He was in for a rude shock when he received a letter from the new insurance company stating that it would accept the proposal on the condition that any claim related to "kidney stones" would be permanently excluded. Mr Rao had a history of kidney stones and he had twice claimed for this ailment from his insurer.

In a similar case, Nitin Kumar, 46, was told to pay an additional premium because of his history of "igh BP" that he had mentioned and which was already covered in his old policy of more than five years.

Before applying for the portability option one needs to be aware of certain important portability guidelines so that one takes the most appropriate decision, since health insurance is one of those policies which one retains for years.

45 days' notice period:

All those applying for portability need to apply at least 45 days before their policies are due. The Irda has offered the new insurer the flexibility to accept an application even if a proposal is submitted within 45 days of renewal date. Normally in policies where the insured is less than 45 years of age, medical tests are waived, qualifying it as a non- medical- test policy.

In such cases, the proposed new insurer accepts portability requests up to 21 days before the due date.

Period of acceptance by new insurer:

The new insurer ( to which an applicant wishes to shift his policy) has to give its verdict regarding acceptance of the proposal within 15 days of receipt of the proposal with relevant documents. After 15 days, the new insurer has to accept such a proposal. In case of delay in processing applications and where the renewal date is approaching, the insured needs to communicate with the existing insurance company, requesting it to provide coverage for a short period not extending up to 30 days from the due date. In that case the insured has to pay a pro- rata premium to the existing insurance company. Underwriting process: The new insurance company is bound to process the proposal according to its underwriting norms. The company may accept the proposal with its standard premium if there are no claims or any pre- existing illnesses.

It can, however, charge an additional premium for any existing illness or past surgery and, in some cases, even refuse to accept a proposal if the proposal does not fit its underwriting guidelines. In other cases such as that of Rao, certain ailments may be permanently excluded.

Waiting- period clause:

The waiting period will be waived depending on the period of continuous coverage with the existing insurance company and will be applicable according to the rules of the new insurance company.

For example, if there is a two year waiting period with the existing insurance company for certain ailments such as hernia, kidney stones, etc., and if the insured has completed only one year with that company, then with the new company the insured will have to wait for that one year more to claim expenses on the ailments falling under the two- year clause. Also, if the new insurance company has a three- year waiting clause for specified illnesses, then the insured has to wait for two years more. Therefore it's very important to note the waiting- period clause of the new company. Those who have been continuously insured for more than four years without any claims, typically will be covered immediately in the new insurance company for all ailments without any waiting period.

When should you shift via portability?

Consider all aspects of your health policy such as sub- limits, noclaim bonuses, ease- of- claims procedure, etc., and compare them with other health policies. Only if you are sure that your insurer is not providing you with the best health policy consider the following. People who are young ( under 45 years) and have never claimed hospitalisation expenses related to any surgery or ailment can switch, as their proposal would come under the non- medical category and will be ported immediately. For those above 45 years of age and with a clean medical history, it is advisable to do a complete medical check- up before applying as medical reports can indicate the state of one's health.

In case any anomaly is detected, one can maintain one's existing policy.

Those who have pre- existing illness and have claimed expenses related to certain surgery can consider maintaining their present policy.

This category of people can take additional cover but it makes sense to retain the old health policy as one is sure of getting claims towards one's pre- existing illness from the old insurer, who is aware of one's health history and where one has already completed the mandatory waiting period.

Those above 45 years of age and with a clean medical history should do a complete medical check- up before applying for a new policy.

It is very important to know the waiting- period clause of the new company

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 )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund


Invest in Tax Saving Mutual Funds Download Any Application Forms
Buy Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now

How to discontinue your life insurance policy

Posted: 01 Aug 2013 11:49 PM PDT

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

 

Some time people realise that the policy that they have got in their hand is not what was explained to them or it's not what they have understood and some people who have bought policies about five-ten years ago realise that now they do not want to continue with these policies. So, one needs to understand the options clearly because life insurance contracts are long-term in nature and there are lots of restrictions at the time of withdrawal. Let me take it on a case to case basis:

 

(1) If a person who has bought a fresh policy and the document has been delivered to him. Every insurance policy has a clause of 15 working day free-look period and within this free-look period he can return the policy back to the insurance company and the insurance company is bound to give the full refund of the premiums that has been paid subject to a couple of deductions like stamp duty that has been paid on the policy, the cost of medical test which the company has incurred and the premium for the number of days he has provided cover with. In case of a unit linked insurance policies (ULIP) policy the net asset value (NAV) as on date of returning the policy is to be paid minus all the expenses. So, this is in case one has bought a fresh policy and the document has just landed in his hand.

 

(2) If one has a traditional policy bought earlier on. In traditional policies, one has to pay premium for at least three years. If one haven't paid premiums for three years, all the money that has been paid gets forfeited and nothing comes at a time of closing the policy. In case premiums have been paid for more than three years then there are two options available;

(a) stop paying any further premium to the policy. The benefits that have been accrued in the policy gets freezed as on that date and the payout happens when the original maturity was scheduled to be, for example he had a policy for 20 years, paid premiums for five years and then stopped making any premium payments but all the benefits accrued from five years will be kept as it is and given at the end of 20 years. In case he do not want to wait for that number of years then there is an option to surrender policy back to the company and the company after deducting certain charges, which are pretty heavy in nature, he gets the money in hand immediately.



(3) Talking about united linked insurance policies. If a person has bought a policy before September 1, 2010 then he can go back to the insurance company, ask for surrendering the policy and the company based on the current NAV minus the surrender charges will refund the money straight in hand. In case if the policy has been bought after September 1, 2010 then there a minimum locking period of five years. So, one can stop making the premium payment and even if he has made just one premium payment then he does not have to make a payment for five years. The money gets transferred into the policy discontinuation fund and the insurance company is entitled to deduct maximum of Rs 6,000 from that fund. The balance amount will remain in the policy discontinuation fund and be given at the end of five years, which is a minimum lock-in period. In the interim period one gets an interest at the rate of what the savings bank account holder of a State Bank of India gets, which his currently 4 percent.

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 )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund


Invest in Tax Saving Mutual Funds Download Any Application Forms
Buy Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now

Changed Rules of Filing Tax Returns

Posted: 01 Aug 2013 07:59 PM PDT

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

The tax authorities have introduced several new guidelines for filing returns this year. Find out how these changes are likely to impact you



First they made it compulsory for businesses to e-file their tax returns. Then they made it mandatory for taxpayers with incomes of over 10 lakh to take the online route. This year, the income tax authorities have cast a wider net and made e-filing compulsory if your taxable income is above 5 lakh a year.


The lowered threshold represents one of the key changes in the tax filing rules this year. Some of these are mere tweaks, such as mentioning your bank's IFSC number, instead of the MICR code, in the return. However, some of these variations are tectonic, such as the mandatory e-filing for incomes above 5 lakh a year. In the following pages, ET Wealth explains the new rules and how they will affect the way you file your tax return this year.


E-filing tax returns


E-filing of tax returns has grown tenfold since its introduction in 2006. Less than 8% of the 3.37 crore taxpayers e-filed their returns in 2007-8. Last year, 45% of the 5 crore taxpayers took the online route. That's a big jump and the figure is expected to go up significantly this year.


The change has spawned a massive opportunity for tax e-filing portals. These websites charge individual taxpayers between 200 and 4,000 for uploading their tax returns. You can also do it for free on the official website of the Income Tax Department. However, private tax filing portals hand-hold the taxpayer through the process. They guide you while filling the form and even correct you if you make a mistake.


Filing tax returns online is easy. The average taxpayer won't take more than 30-40 minutes to enter all the details and upload the return. However, the average taxpayer also harbours several misconceptions about e-filing. Mumbai-based Harshad Doshi has fallen in and out of love with online filing during the past three-four years. Doshi started e-filing in 2008, but when he got a scrutiny notice in 2010, he was advised by a relative to desist from the online route. The next year, he reverted to physical returns, but still got a notice. This year, Doshi has no choice but to e-file his returns because his annual income is above 5 lakh. I have realised that one can get a tax notice, irrespective of whether one files his return online or offline.


He's right. Tax returns are picked up for scrutiny through a computer assisted selection procedure that has no human intervention. If the computer detects certain discrepancies in the return, it raises the red flag and the individual gets a notice. In fact, there is a greater probability that a return filed offline will get picked up for scrutiny. The information in your physical return is ultimately fed to the computer by operators. A typing error at this stage can introduce a discrepancy in the return, leading to a notice being sent to you.


This problem can be avoided when you file online because the chances of going wrong are lesser. The e-filing portals further reduce the risk of errors by calculating the tax as you fill in the form. Some e-filing companies, such as Taxspanner, even verify your return for a small fee. If you are ready to shell out 200, the portal will check if you have entered correct information and alert you when you are going wrong. Tax professionals go through your return form, tallying the numbers and cross-checking the information before it is uploaded.


Choose the right form


The online filing data reveals that more than 32% of the 2 crore individual taxpayers used the basic ITR 1, also known as Sahaj, to file their returns last year. Only 11% used the more complicated ITR 2. These statistics indicate that a lot of taxpayers who should have used ITR 2 filed their returns using the simpler Sahaj form. The income level does not matter; what is important is the source of income. For instance, if one had made capital gains or earned rent from more than one house, he should have used ITR 2.


Whether the popularity of ITR 1 was out of ignorance or a deliberate attempt to conceal income is not clear. However, the government has now changed the rules to capture a better picture of the income of taxpayers. If you received more than 5,000 tax-exempt income during 2012-13, you will have to use the ITR 2 for filing your return this year. Exempt income includes tax-free sources of income, such as the interest on PPF, tax-free bonds and dividends (see table). Also, a taxpayer is is not supposed to use ITR 1 if he has foreign assets or has claimed tax relief under any double taxation avoidance treaty.


Experts are divided over the interpretation of exempt income in this regard. This change will have a big impact on the salaried taxpayers because HRA, LTA or conveyance allowance are commonly availed of by most of them. This effectively means that a vast majority of salaried taxpayers will have to use ITR 2 this year. Even if they don't claim HRA exemption, they get LTA, or at least 800 conveyance allowance per month, which is tax free.


However, other experts believe that the 5,000 limit for exempt income does not include HRA, LTA and other allowances that a taxpayer receives from an employer as part of the salary package. More clarity is needed on this aspect.


The stress on disclosure demonstrates the tax department's resolve to plug the leakages in tax collection. The direct tax collection of 5.58 lakh crore in 2012-13 fell short of the revised target by 7,000 crore. Addressing a meeting of tax officials in May, Finance Minister P Chidambaram exhorted them to "target non-filers and stop-filers to widen the tax base". Almost 12.5 lakh such "non-compliant" taxpayers have been identified by the Central Board of Direct Taxes, and almost 2 lakh notices are already on their way. The taxpayers who have not filed or s t o p p e d f i l i n g would do well to take heed of the warning. If you have not filed your return for last year as well, you can do so now. A return filed after the due date is a delayed return. If you file your delayed return before you get a notice, you have a better chance of getting away lightly. The taxman will not take you to task for not filing your returns, just give you a mild rap for waking up late.


Automatic choice for e-filers


For some online tax filers, choosing the right form is not an issue. A taxpayer has to just enter what he has earned under different heads of income and the portal automatically chooses the applicable form. For instance, if the person has only income from salary and no exempt income, his return will be filed using ITR 1, but if he made some capital gains, has rental income from more than one house or his exempt income exceeds 5,000, ITR 2 will have to be used.


However, taxpayers who upload their returns through the official Income Tax Department website will have to be more careful about the form they use. Delhi-based Kuldip Kaushik used the ITR 1 last year, but since he had dividend income of over 5,000 for the year 2012-13, he will have to use ITR 2 this year.


If a taxpayer uses the wrong form and the mistake is discovered by the tax authorities, the return may be rejected. Every year, thousands of defective returns are sent back to taxpayers. A defective return is not an earth shattering matter. If you get a notice, you will have to file a revised return within 15 days. If you meet the deadline, the return is treated as valid. Get delayed and your return will become invalid and you will have to file afresh.
If you discover on your own that you have made a mistake in the return or used the incorrect form, you can file a revised return to rectify the mistake. Your new return will overrule the previous one if the assessment has not been completed.


Check your TDS details


Before you sit down to file your returns this year, spend a few minutes to check whether the tax you paid for last year has been correctly credited to your name. The Form 26AS has details of the tax deducted on behalf of the taxpayer and can be easily checked online. The The TDS paid on his income from fixed deposits was credited to another PAN by mistake. Though he was eventually given credit for his TDS, Singh is not taking any chances this year. He has diligently matched all his TDS details with his Form 26AS online.


Checking your tax credit details online is child's play if you have a Net banking account with any of the 35 banks that offer this facility. Otherwise you can go to the official website of the Income Tax Department and click on 'View Your Tax Credit'. First-time users will have to register but it takes less than five minutes before you can log on and view your details. It is necessary that taxpayers check their TDS when they file their returns.


Forms seek more information


If salaried people are feeling jittery about using the more detailed ITR 2, imagine what partners in firms and businessmen are going though. In an attempt to dig deeper for undisclosed income, the government has made it mandatory for partners, professionals and businessmen with an income of over 25 lakh to furnish details of their assets and liabilities. There is a new 'Schedule AL' in the ITR 3 and ITR 4. If the taxpayer's income exceeds 25 lakh during the year, he will have to declare his assets and liabilities.


Don't forget the ITR V


The most important form in the whole process is the ITR V. This is the acknowledgement of your return. If you file offline, this form has to be submitted along with the ITR. If you file online without digital signature, this form has to be sent to the CPC in Bangalore by snail mail within 120 days of uploading the return. This also means that for a vast majority of efiling taxpayers, the process is not fully online. The CBDT is considering a proposal that will do away with the physical posting of the ITR V. However, till then you will have to send it by ordinary post.


Others feel that the cost of digital signature should be brought down and its usage expanded to cover other areas as well. If e-filing has been made mandatory, the government should also make the use of digital signatures mandatory.


Choosing an e-filing portal

Charges should not be the only reason for choosing a portal. Here are some other factors that you should consider.

Is it comprehensive?
The more details sought, the better it is. If the return uses only Form 16, you might lose out on deductions you were eligible for, but didn't claim.

Assistance in filing
For a small charge some portals guide you in the process to ensure there are no mistakes. Others pick up documents from your office or residence.

Follow-up services
Does the portal help even after the uploading? Some alert you if you forget the ITR V. Others send it to the CPC in Bangalore on your behalf.

Privacy policy
The data in your tax return form is priceless for financial services companies. If it goes out, you will be inundated with calls and spam mail.

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 )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund


Invest in Tax Saving Mutual Funds Download Any Application Forms
Buy Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now

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