Question: At age 35, my annual salary package is Rs. 5 lakh. I have prior investment of nearly Rs. 80,000 in MFs. But I want to make fresh investments in the form of pension plans. Which type of pension plan is right for me?

Answer: Pension plans can be bought from MFs or life insurance companies. There are 3 pension focused plans from MFs – 2 are balanced funds & other one is equity-oriented. In MF pension plans (PPs), there is only the growth phase & after certain years, they would give you a lumpsum amount, not the regular pension. Life insurance companies offer PPs with varied asset allocation. You may keep even 100% in equity or debt. It’s always better to diversify. For your retirement needs, create a separate portfolio & spread among the variants. Keep tax benefits in perspective & create wealth for your retirement. Have more queries? Feel free to write to us.

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To insure your life for fixed time duration, you need to buy yourself a Term Insurance Policy.

But what will be the premium that you must pay? That is the problem which will leave you scratching your head. There are many insurance providers out there, and numerous schemes that each of them offers. How to compare all those products?

Let’s not tackle this problem from the wrong end. Rather than look at a large variety of products and confuse yourself, try to figure out what your needs are. This is where a Term Insurance Premium Calculator comes in handy. It helps you to define what you want, and then tells you how much you will have to pay for your Term Insurance Premium. Now you don’t need to search for an Accountant or Maths Professor to help you out.

Term Insurance Premium Calculator is a simple online form. It asks you a series of easy questions. Your answers to them are used to calculate the premium that you will have to pay.

Firstly, it asks for your age and sex. The older you are, the higher your premium. And the premium value also changes depending upon whether you are male or female. Then it asks for your Annual income. This helps it decide how much premium you can afford. Smokers have to pay a higher premium than non-smokers. You fill this column, and enter your personal details. Viola! Your Term Insurance Premium is calculated in the blink of an eye.

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Which vehicle are you planning to board for your golden years, deferred annuity or retirement plan? The question takes you to the land of confusion.  The common impression is that Retirement plans are being offered by only life insurance companies. But National Pension Scheme India came to our rescue on May 1, 2009 inviting all citizens of India between the age of 18 and 55 on voluntary basis. Government employees are not the only beneficiary of this scheme but individuals too can enjoy its benefit.

Pension Fund Regulatory and Development Authority (PFRDA) has taken the charge to make it more attractive by reviewing and reforming (if needed) investment guidelines and introducing more schemes and plans for the individuals.

How to invest in National Pension Scheme India?

Investing in the National Pension Scheme is not a tedious task. All it takes is to approach an approved Point of Presence (POP) service provider. The PFRDA has authorized many banks, financial organizations and the Department of Posts to act as POP. A subscriber is required to make his/her contribution with just Rs. 500 (for Tier I) and Rs. 1,000 (for Tier II). The highly transparent and cost effective schemes and simple to operate rules make National Pension Scheme India more alluring for the man on the street.

What are you waiting for? Your route to golden years can be easily initiated by just making a walk in to the nearest POP of National Pension Scheme.

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If you are already a 30-year-old non-smoker, and still do not hold a life insurance policy, then log on to a Human Life value Calculator immediately. The online tool will help you provide financial security to your family in your absence with the right amount. You can cover your life for Rs. 1 cr. for 30 years for less than Rs. 11,000 per annul (excluding Service tax).

The thumb rule is ineffective

A Human Life value Calculator finds out the exact life cover required by you. The thumb rule says that you should have an insurance cover of around 5-10 times of your annual income. Most of the Human Life Value Calculators are based on age, number of dependents, annual income and expenses, outstanding liabilities like home loan, car loan, investments/savings and lifestyle expenses, but forget to mark game changers -- rate of inflation and increasing rate of life expectancy. An HLV calculator needs to incorporate income from other sources, present values of investments and years you need to support your family and inflation rate too along with all the basic requirements.

Ride it away

No one plans to get sick or hurt, but in case of medical emergencies, nobody wants to impair their ability to earn by paying medical bills. You can maximize the benefits from a term insurance cover by adding riders (additional benefits) for covering you against critical illness or a serious accident? It’s a long term insurance policy where you will get tax-free ‘lump sum’- a one-off payment in case you are diagnosed with serious illness.

Riders are also available to cover your financial loss against partial/total disability and to cover your hospital stay (fixed amount per day of hospital stay).

So, what are you waiting for? Get on the task and get yourself some life even when you are not there. Live forever!

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Buying or selling land, house, commercial property etc. makes you liable for Capital Gains Tax.

You are exempt from this tax when you invest all your capital gains into a Capital Gain Bond. This exemption comes under Section 54 EC of the Income Tax Act.

Keep in mind though that you must invest in Capital Gain Bonds (India) within 6 months of your transaction, in order to be eligible for tax exemption.

The interest from Capital Gain Bonds India is taxable.

The interest that would come from the Capital Gain Tax Bond, that is taxable only, and not the entire transaction that caused the Capital Gain in the first place. This means that you saved substantially on Capital Gains Tax when you re-invested the gains in Capital Gain Bonds.

Capital Gain Bonds eligible under Section 54 EC are:

•    Rural Electrification Corporation Ltd. (RECL)

•    National Highways Authority of India (NHAI)

You can invest a maximum of Rs. 50 Lakhs in one or both of them in a financial year.

Each of these has the same features:

1.    Rate of Interest 6%, which is payable annually.

2.    Minimum Investment is Rs. 10,000/-.

3.    They are non-transferable Bonds.

4.    They are locked-in for 3 years. They are automatically redeemed after this lock-in period.

5.    They can be held in Demat or Physical form.

Good luck gaining on your capital with Capital Gain Bonds.

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