Taxman Calling !

It is time to gird your loins and meet the tax demon head on, as March approaches !
Pull out that Calculator or Spread sheet and arrive at the Tax savings to be made.

Review your Tax savings plans and :

• Pay your Insurance premium- Nowadays, you can make online payment by directly debiting your bank account. Check with your current bankers and act
• Check the Mediclaim validity
• If you have a PPF account, remember, you need to make at least one payment in a year before March 31st.
• If you have Housing loans, your employer may ask for the latest certificate on Principal and Interest paid for this financial year. Call your Bankers and request for one , so that you can pick up the same during the weekend. 
• Note to pay your Property tax, which could be included for tax purposes.
• Check and ensure that your house is insured. Make sure that your financiers have done this otherwise you pay this and advise them against double payment.

This is a wake up call , particularly to those who have travelled outside India and normally tend to forget these critical activities. Do Not allow policies to lapse due to delinquency.

My experiences on Planning & Savings

One need not be in a high flying job, to secure a peaceful post retirement life. It is not necessary, one need to allocate huge chunk from his monthly salary. You need not worry, if your job does not provide you for post retiral monthly benefits. Some planning and small monthly savings could help you overcome this. Employees in a Bank are more adept in this and I have had firsthand experience on their planning skills. They will borrow for anything and wherever facility is available, so that your borrowel becomes a monthly commitment and also gets absorbed in a fixed monthly repayment plan, which gets closed after a specific period of time. My intention here is to share some of the savings options, through which I had benefited.
 Bank Recurring Deposits: I have heard people lamenting in Feb every year that the month's salary will be considerably reduced due to the Income Tax deductions. It is not as though it has been announced only now that IT will be deducted. You are aware of this even last April, when the financial year started. A little forward planning and a monthly savings could save you the blushes every Feb-Mar. Similarly, think about the fixed yearly commitments such as LIC Premia, Mediclaim premia, Car Insurance, Car Service, and Vacation. A single or multiple RDs will take care of all these commitments without hassles. Believe me, only the first year could be tough and the rest will be smooth. Also, wherever possible provide for Standing Instructions (SI) at the Bank branch where your salary is credited, so that your amnesia will not hamper this plan!

NSCs: In older times, the National Savings Certificate (NSC) issued by Govt of India was the most popular investment for Income Tax and it used to double in 5 to 6 years- not sure of the present status. We used to invest continuously for 6 years and from then on rotate the matured value of the first year NSC, so that there are no more fresh investments. One can also avail a 75% loan from Banks on NSCs. But, the scenario seems to have changed and would advise checking for the latest, before investing.

Tax Saver Bank Deposits: This appears to be the new chip in the block in that the amount you invest in this is safely locked up for 5 years, during which period you cannot foreclose or avail loan against this. But, this is taken as investment for Tax savings and also earns a decent 8+% of interest. My recommendations will be to keep investing in this every year for around 5 years and thereafter, rotate the matured amounts and can be construed as the above NSC's cousin

Public Provident Fund (PPF): A very popular scheme that could be opened in any Nationalized Bank (people prefer State Bank of India). The deposit is for 15 years and every year at least once you have to remit a minimum amount of Rs 100/- The catch is the interest rate almost remain stable and people normally pump in more in the last years , so that they get higher interest even for less number of years. You can open this PPF a/c even in your minor Son / Daughter name, which is advisable. Please check with SBI for more details and latest updates.

Gold Coins: My fervent request will be to invest a small amount, (say Rs 1000 per month) and every year buy some gold coins from reputed jewelers. Go for standard coins from the Swiss Volcambi or if not available coins with Bank's seals. Such reliable coins could always be exchanged for either gold ornaments or even cash. I have personally benefited from this investment when a gram of gold was sold at Rs 700 to the current 2000+ (24 carats). But, make sure that you safe keep such investments in Bank lockers and not at home. Go for gold coins and not ornaments. It is like a plot of land which fetches more value than a constructed house!

Silver: This seemed to have gained over Gold and in 2010, Silver fetched more returns than gold! People with girl kids can buy a kilo or so and it will definitely be helpful. By advice is buy silver bars and not articles.

Life Insurance: This investment is better made when you are young, so that the policy could be long term and premium is less. In addition, this will start maturing and providing a sizable return by around 45 years of age, when you start thinking about your Son’s education etc.,

Mediclaim: I had already mentioned that this is the single most investment one should do without any exceptions and the benefits from this are multi fold. I feel there is no need to discuss much on this and everyone must opt for such a medical insurance scheme from the early years so that when you are around 50 you had accumulated a healthy 5 lakhs plus policy. Please rush

I had called life and medical insurance as investments, as it is my earnest feeling that these are the real investments for a safe and happy evening of one’s life.

I have just shared some of the investment options, which in my opinion, are good and I have also been benefited. Please check with the local conditions and counselors before proceeding with investments and also let me know if there are any further options !

In your own interest

With every passing day I am getting increasingly convinced on the need for medical insurance, by every individual, at least everyone I care for. The ever increasing maddening road traffic and the skyrocketing medical costs could burn a big hole in your pocket, if you are not prepared.

A small investment every month, could take you on a comfortable and care free life for years to come. I cannot be more qualified to make this statement, as I reaped the benefits, very early. Way back in 1995, a normal weekend turned a nightmare as I skidded on to the midst of the GST road, due to a lorry rushing against me on the wrong side. Just before leaving for the operation theatre, my friend and Development officer at the Insurance company where I had taken a Mediclaim policy assured me that my policy will cover my expenses and that I need not worry on this count. As it turned out, the policy not only covered my medical expenses but also paid an amount for every week of my absence from my work ! The good officer also ensured that I got the amount reimbursed without any delay.

Though many of my friends who came to know about it got covered under Mediclaim, I find that still there are many who consider this as a waste. The sad part is that all exceptions are being given as reasons:
1. There is no cover in the first year
2. Dental related problems are not covered
3. Hospital Admission is essential for any claim
4. Normally, the hospital overcharge and fleece if they come to know that you are under Mediclaim

Though most of the above are partially true, there are many honest ways through which these could be overcome. First year claims are normally perused more closely but a genuine claim can be passed through with right explanations. As per the recent court ruling, the insurer is not expected to provide a copy of your Sum Insured to the hospital.

Another common excuse is - I am covered by the Group policy in my organization. Please do not commit this mistake. Particularly, with the current trend of people hopping every two or three years, you could be caught when you are on the leap from one organization to another. Further few people check the group policy, which may not provide for 100% coverage. It is always better to have your own policy, in addition to your company policy, so that you are fully covered whether you are employed or not.

In addition, it is my experience that there are reasonable officials who are willing to listen to your side of the story, before they decide.

On the other hand, imagine the timely help it could provide you, when you are in need. Every passing unclaimed year would accumulate sufficient 'no claim bonus', which is added to the Insured. Coupled with that , one could enjoy a sizable chunk of rebate in the form of Investment for Income Tax.

Mulling over the above, I feel every sane individual must avail this facility. I would suggest that the next step of yours should be in this direction. If required, I am also willing to help and guide my friends on this. Believe me, this is more with your interest in mind and I have no axe to grind on this :-)