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Thursday, October 6, 2016

Prajna Capital

Birla Sun Life Dynamic Bond Fund
How to save your Term Insurance premium
Health cover Reimbursement Claim

Posted: 06 Oct 2016 04:43 AM PDT

Invest Birla Sun Life Dynamic Bond Fund Online

Sometimes factors that are not in your control can have an impact on your financial goals.

By investing in Birla Sun Life Dynamic Bond Fund (An Open-ended Income Scheme) you have gone a long way towards potentially ensuring that they aren't affected by fluctuating interest rates.

	When interest rates are likely to rise: The fund invests in short-term bonds that mature faster, so that it can invest in newer bonds of higher rates.
	When interest rates have reached their peak: The fund invests in long-term bonds. Your investment then benefits from a higher interest rate for a longer term.
	When interest rates are going to fall: You will gain by selling your higher interest-rate bond at a profit. When the interest rate falls, the prices of bonds rise. Hence, bonds that were bought when yields were high are due to generate capital gains when they are sold in a falling interest rate scenario.
	The investment team of Birla Sun Life Mutual Fund, through its research and process driven investment strategy, would endeavour to capitalise on the available opportunities in a timely manner.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in India for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Religare Tax Plan

4. DSP BlackRock Tax Saver Fund

5. Franklin India TaxShield

6. ICICI Prudential Long Term Equity Fund

7. IDFC Tax Advantage (ELSS) Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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

Leave your comment with mail ID and we will answer them

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

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

How to save your Term Insurance premium

Posted: 06 Oct 2016 01:49 AM PDT

While buying a term plan, many will concentrate only on the comparison of Term Insurance Premium of different companies. However, there are other methods by which one can save their term insurance premium. Let us see them in detail.

#1: Using Life Insurance Ladder–

How you arrive at the sum assured requirement for your life insurance? In simple terms, these are based on below assumptions.

You need money to cover your family expenses until your spouse dies or your kids get a job-To arrive at this value, you must know the current household expenses, number of years you need this income stream (up to the death of your spouse or job of kid), inflation of such expenses and suppose you die today then how much return you can expect from the corpus of term insurance maturity claim.
Based on your financial goals-Insurance requirement for such goals be arrived at by considering the current cost of your financial goals.
Based on your existing outstanding loans-You are clearing the interest part by paying the EMIs. Hence, you must consider the outstanding principal to arrive at insurance requirement.

Let us take an example. First, we calculate the total amount of requirement for meeting your family expenses. Suppose your monthly expense is Rs.25, 000, inflation of such expenses is around 9% and you are sure that these expenses will be for the next 30 years. In addition, we have to consider the return on investment (when we invest the death claim amount of term insurance) to meet these expenses for next 30 years. I mean to say that how much amount you need today so that we invest that amount in any product and start to withdraw money monthly from this. Hence, we have to assume the return on investment of such corpus. Let us assume this around 9%. The total corpus required for meeting these expenses will be Rs.90, 00,000. This amount is your insurance requirement to cover the household expenses for the next 30 years (in case you die today).

In the same way, we have to calculate for the each financial goal. For example, kid's education. You need Rs.15, 00,000 (in current terms) for education after 10 years from now. Let us assume the education inflation at 10% and return on investment to generate this much amount will be 9%. Then the current amount required to meet this goal will be around Rs.17, 00,000.

Finally, you also include the outstanding loan principal to your life insurance requirement. This is required, because if you die today, then your family member will pay and clear off the loan from the claim amount of Term Insurance. This let us say as Rs.50, 00,000 (current outstanding amount).

Many people add up all these figures and arrive at the sum insured requirement. In addition, they try to choose the term up to the age of their retirement or the maximum term offered by insurance companies. However, you all know that term insurance premium depends on the term you chose. The premium will be higher if your term insurance term is longer and shorter if the period is shorter.

Instead of sticking to one term plan and choosing a single term, if we split based on our requirement like one for expenses, others based on the tenure of financial goals and one for outstanding debt, then definitely this saves premium.

From above three examples, if we split our term insurance buying like Rs.90, 00,000 to meet the household expenses (up to your retirement age), Rs.17, 00,000 to meet the financial goal of kid's education and a term of 10 years, and finally Rs.50, 000 term insurance matching the term equal to loan tenure. Instead of having a term insurance of Rs. 1, 57, 00,000 (Rs.90, 00,000+Rs.17,00,000+Rs.50,00,000), if we split based on our requirement like above then it will drastically reduce your premium. We buy Rs.90, 00,000 sum assured term insurance with tenure of 30 years (Hoping you are 30 years of age and planning to retire at the age of 60 years), Rs.17, 00,000 sum assured term insurance with tenure of 10 years (to meet kid's educational) and Rs.50, 00,000 term insurance for tenure of 15 years (hoping loan tenure is 15 years from now).

This step of laddering your life insurance will definitely reduce the premium you pay towards term insurance.

Advantages of using the Life Insurance Ladder method-

Indirectly you are planning for your major financial goals. Hence, it creates a systematic financial approach.
You receive a fresh cash flow as and when the individual policies close.
It may lower your premium.

Disadvantages of using the Life Insurance Ladder method-

It may complicate nominee to handle all policies. Hence, better to have insurance with one company rather than choosing different companies.
It creates a major financial burden, in case you not planned for other goals. From above example, if one not planned for retirement and dies at the age of 55 years, then his nominee will receive the claim amount of Rs.90, 00,000 only (because two policies matured due to maturity of tenure of kid's education and loan repayment). However, if one opted a single policy until his retirement age, then his nominee will receive a higher sum assured (In above case Rs.1, 57, 00,000).
Tracking of term insurance will leads to complication. Because managing a single policy is easier than managing 5-10 policies.
Finally, if your insurance company giving you higher sum assured rebate or loads for a lower sum assured options then this may not actually save premium.
Postponing of goal may harm the goal funding. For example, you assumed that kid's marriage will be after 20 years from today and buy a term insurance matching 20-year term. However, if kid's marriage postponed to 24th year and your death occurs after 22 years from now then your nominees may feel hard to fund the marriage expenses. Hence, you must be particular about goal period.

#2: Buying at early age–

We all know that buying a term plan when young is cheap. Because term insurance premium depends on age. Younger the age means lower the premium. Hence, try to buy the term insurance immediately once you start to earn.

#3: Restricting your term of term insurance–

People have a tendency to try to get benefit at any cost from term insurance. They know that risk of dying is higher when they get old. Hence, instead of restricting the tenure up to their retirement age, they go beyond that. They look for term insurance, which covers them up to their age of 70 Yrs of 75 Yrs. However, sadly they forget the simple funda that, the value of current sum assured they looking for will not be same when they return at that age.

In addition, by increasing the tenure, you are indirectly increasing your premium payment. As I said above, longer the term insurance period leads to higher the premium. Hence, restrict your tenure to the maximum of up to your retirement age.

#4: Comparing the insurance companies–

There is a huge competition among insurance companies when it comes to term insurance. Hence, all companies lure you by providing the competitive rate. Therefore, do your own research to compare the premium. However, never compromise on the features you are actually looking for. Usually, new insurance companies offer lesser premium than the older. However, at the same time, I am not suggesting you to go for new companies. Instead, buy from a company, which suits your need and your comfort with the company.

Note-Never, heed the advice of comparative portals. I know they insist you for a particular company to go. Because there is a commission if they promote or sell a particular term insurance (even if it is ONLINE).

#5: Buying a plain product-Nowadays, insurance companies offer many variants of term insurance plans. Few of them are like premium back term insurance, part of the sum assured as a lump sum along with monthly income over a period or 100% of Sum Assured on death and a monthly income depending upon the option chosen: Level income or increasing monthly option. Understand your need, cost involved in such fancy offers then only try to buy.

Along with such fancy offers, insurance companies offer riders like accidental or critical illness. Nothing is free, that applies to here too. All these features will actually come up with a cost. Hence, don't buy those products which combine riders. Instead, I always suggest buying accidental or critical insurance policies from General Insurance companies. If buying them separately, then you will get many more features than these riders will.

Hope above 5 points will definitely help you to save the term insurance premium.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds
Top 10 Tax Saving Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online
Invest Online
Download Application Forms
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300

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

Health cover Reimbursement Claim

Posted: 06 Oct 2016 12:22 AM PDT

Health cover Online

Policyholders can make health insurance claims either through cashless or reimbursement mode. Some hospitals do not offer cashless hospitalisation facility. In this case, the policyholder has to pay all dues to the hospital and then submit a claim to the insurer.

Intimation

In a planned hospitalisation, a policyholder intimates insurers about the forthcoming claim. In emergency hospitalisation, claim intimation must be sent to the insurance company or TPA within 24 hours.

Documents collected at the hospital

Before leaving the hospital, it is important to collect the discharge summary, copy of investigation reports, bills, prescriptions and pharmacy receipts.

Form

Policyholders need to fill up prescribed reimbursement claim forms. Some sections need to be filled by the hospital and signed by the doctor who treated the patient. The form can be downloaded from the insurer or TPA's website.

Bank details

At the time of submission of the claim, one should submit a fresh bank mandate with the policyholder's bank account details and IFSC. A cancelled cheque may be required to be submitted.

Submission

Claim form with documents like a copy of the policy, discharge summary, medical bills and investigation reports should be submitted to TPA. The claim must be submitted right after discharge.

Process

On receipt and scrutiny of papers, the insurer may call for other documents for processing the claim, or intimate the reasons for repudiation of the claim.

Retain old health insurance papers, as copies of these may be required when making reimbursement claims.

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

Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds
Top 10 Tax Saver Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online
Invest Online
Download Application Forms
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300

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

Wednesday, October 5, 2016

Prajna Capital

Tips to save Income tax for Salaried Person
Retirement Planning is not only about Money
What is Disinflation?

Tips to save Income tax for Salaried Person

Posted: 05 Oct 2016 04:52 AM PDT

Often, investment for most individuals begins and ends with tax planning. Although it is pertinent to avail tax breaks, this should not be the sole focus. Start by jotting down your key financial objectives, the tentative time of money requirement and the corpus needed to achieve those goals. One can use tax saving investments effectively, to achieve financial goals. For example, one can take a children's plan that also provides tax benefit. Consider the impact of inflation on your needs. After your first few working years, as income goes up, it is wise to invest beyond one's tax saving investments to achieve your goals. Also, evaluate the life cover requirement, while planning for your taxes. We are giving below a brief on some of the Popular allowance / Exemption and deductions, benefit of which can be taken by the salaried taxpayers to reduce their tax burden.

Maximising your Tax saving

1. Exemptions/reimbursements – Identify the reimbursements available from the company and take maximum advantage of the same. Normal expenses that one incurs could help save tax. Example- Telephone/fuel reimbursements, meal vouchers and company car. A person in lower tax slabs can reduce his tax liability to nil with exemptions alone.

Similarly, salaried employees staying in rented apartments can claim exemption under Section 10(5) of the Act in respect of house rent allowance by making the HRA a component of there salary.

Some of The Popularly Known Exemptions/Reimbursements

House Rent Allowance
Minimum of –

1. Actual HRA

2. Rent Paid – 10% of Basic

3. 40a% of Basic (Non-Metros) or 50% of Basic (Metros)

House Rent Allowance (HRA) Taxability & calculation

Transport Allowance
Rs 800 / Month (1600 Per Month from A.Y. 2016-17)

Leave Travel Allowance

Two trips in a block of 4 Yrs Amount not exceeding Air Economy or Rail AC I Fare shall be for shortest distance and for a single destination

Taxability of Leave Travel Allowance (LTA) – Section 10(5)

Medical Reimbursement – Section 17(2) proviso

Up to Rs. 15,000 in aggregate in a year

2. Deductions

Section 80C allows a maximum limit of Rs 1.50 lakh across investments ranging from provident fund, PPF, infrastructure bonds, fixed deposits (5 years or more), Sukanya Samriddhi Account, NSC, insurance/pension plans, unit linked insurance, equity linked savings scheme etc. It also includes tuition fees of your children and the repayment of principal on your housing loan. Deduction under section 80C and Tax Planning

The interest component on your home loan has a separate limit of Rs 2 lakh. Income Tax Benefits from House Property and Loan

Medical premia upto a maximum of Rs 15,000 (Rs. 20000/- wef A.Y. 2016-17) qualifies for deduction, with an additional Rs 15,000 for parents. Additional deduction of 20,000/- (Rs. 30000/- wef A.Y. 2016-17) could be availed in case of a senior citizen.You can claim a separate deduction for medical premium of your parents. Deduction U/s 80D for Mediclaim Premium to Individual, HUF, Senior Citizens

A person who have spent money on the maintenance (including medical treatment) of dependant persons with disability, could avail deductions 80DD of the Act. Section 80DD Deduction- Medical expense of disabled dependent.

Individuals paying interest on education loan should obtain the interest payment certificate under section 80E of the Act. Section 80E – Deduction for Interest on education Loan

Those who are suffering from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent of Rs. 100,000/- under section 80U of the Act. Deduction U/s. 80U for disabled persons

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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

Leave your comment with mail ID and we will answer them

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

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

Retirement Planning is not only about Money

Posted: 05 Oct 2016 03:58 AM PDT

Besides building a corpus, it is essential to prepare for a post-retirement social life.

When people think about retirement, it tends to be in financial terms. The main consideration is whether or not there will be enough money to live on when they stop working. A related concern is finding a plan that allows them to accumulate a retirement fund. HSBC's recent Future of Retirement survey found that the current generation of retirees in India generally regretted not saving early enough in life, and they wished they had saved more. The survey also found that those who are now preparing for their retirement expect to save for at least six more years than the previous generation.

Starting to save early is perhaps the most common piece of advice when it comes to retirement. Incremental investment returns accumulated over a long period of time can grow into a substantial sum of money, but the earlier you start, the more pronounced the effect. Of course, having sufficient funds is key to a comfortable retirement. But, at the same time, we know that money does not necessarily buy happiness.

Imagine a senior executive who has worked hard in a company over many years. He not only wielded a position of authority in the organisation, but was also treated respectfully by colleagues. His job is a major contributor to his self-worth. For someone like him, retirement can be quite a sharp change. He may have enough money to maintain his current lifestyle, but no longer enjoys the benefits of employment--seniority, productivity and interaction with clients and co-workers. The loss of all these things can make retirement feel like a forced redundancy for some people, rather than a natural progression in life that comes with age. This can result in a damaged sense of purpose.

When this happens, there is a tendency among some retirees to just accept their lot and make little or no effort to improve their mood; old age is something to be endured rather than enjoyed.The newly retired who find themselves in this situation should resist despondency by being open-minded and proac tive about how best to meet both their financial and psychological needs. For example, a retiree might take a bridge job that allows them to gradually shift away from full-time employment. The growth of the so-called gig economy is a major development in employment that could provide attractive opportunities to older workers. In addition to providing a meaningful activity, a part-time job also brings in a regular income that can supplement retirement savings.

Another consideration is to nurture a range of interests other than work, cultivate relationships with family and friends, or find activities that can keep them busy at the end of their employment. These can provide continuity of purpose and activity in retirement, a contributor to satisfaction in old age that ranks alongside financial stability and good health in importance.

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

Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in india for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Religare Tax Plan

4. DSP BlackRock Tax Saver Fund

5. Franklin India TaxShield

6. ICICI Prudential Long Term Equity Fund

7. IDFC Tax Advantage (ELSS) Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

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

Leave your comment with mail ID and we will answer them

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

Leave a missed Call on 94 8300 8300

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

What is Disinflation?

Posted: 05 Oct 2016 02:18 AM PDT

Prices don't fall during disinflationary periods, they just don't rise as much. Prices are still rising in the Indian economy, though the pace has slowed down. This means, India is currently witnessing disinflation: the price rise has slowed down significantly as compared to, say, 2 years ago. Unlike deflation, disinflation is considered a positive sign and capital markets, especially the bond markets, tend to react positively to it.

But disinflation without economic growth can be a cause for worry. If inflation slows down quickly, and is not accompanied by a faster growth of gross domestic product (GDP), it could lead to a slowdown of economic growth, followed by falling productivity and rising unemployment.

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Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds