Go directly to: Tax Free Bonds vs Infra bonds | Who should invest in tax free bonds?

​Tax Free Bonds vs Long Term Infrastructure Bonds Tax free bonds differ from Long Term Infrastructure Bonds – Investments made in Long Term Infrastructure Bonds such as SREI Infrastructure Bonds – are exempt from tax upto a limit of Rs 20000 under Section 80 CCF.

What is the meaning of Non convertible debentures or NCDs?

A debenture is a bond issued by a company and not backed by a physical asset or collateral. Some debentures allow the holder to exchange the debenture for company stock. However Non Convertible Debentures are those which cannot be converted to company equity or stock.

Go directly to: Benefits of NCDs | Taxation on NCDs | Muthoot NCDs

​​​​Disadvantages of Non Convertible Debentures

NCDs are more riskier than bank fixed deposits . While Bank FDs are secured upto a limit of Rs 1 lakh, NCDs do not come with any such assurance.

Non Convertible Debentures are not as liquid as a Bank Fixed Deposit. They come with a lock in period. Though NCDs are listed on stock exchange and can be sold, its not as easy as it sounds. Infact if there isnt much trading happening in the NCD, the bonds might have to be sold at a loss.

Taxation of NCDs The interest earned from Non Convertible Debentures is taxable in the hands of investor. This means that while no tax is deducted at source, the investor is liable to pay tax on the interest income himself. So if a NCD gives 12 percent returns, post tax yield, if you fall in 30% tax bracket, will be 8.4% only.

Source: Economic Times

Muthoot NCDs Muthoot financiers have a history of almost 72 years and are the largest provider of Gold Loans as on March 2010. NCDs from Muthoot Finance are open for subscription till 7th Jan 2011. They have been given a rating of AA- by ICRA and CRISIL which implies that these instruments carry low risk and are hence safe. Face value of a single unit of in Rs 1000. Minimum application should be for Rs 5000. The NCDs can be purchased for a time period of 24 , 36, 60 and 66 months. Interest rate is 13 % for a period of 24 months. To know more more details about Muthoot NCD and for a comparison with Bank FDs click here ​Its advisable to invest in a NCD only if you can wait till the end of maturity period. Also invest in small amounts rather than making a lump sum investment. Check the rating of the company issuing the NCD. Invest only if the company has sound financials. Also read BusinessLine’s take on Muthoot NCDs

]]> http://insureinvest.in/muthoot-ncds-non-convertible-debentures-from-muthoot-financiers.html/feed 0 http://insureinvest.in/80ccf-long-term-infrastructure-bonds-2011.html http://insureinvest.in/80ccf-long-term-infrastructure-bonds-2011.html#comments Wed, 07 Dec 2011 18:00:09 +0000 admin http://insureinvest.in/?p=831

What are Tax Saving Infrastructure bonds? The purpose behind infrastructure bonds 2011 in India is to meet the long-term needs of infrastructure development in India. The money raised through these bonds would be primarily invested in infrastructure projects – building of roads, ports, airports, power plants, etc. These investments are of long term duration, and therefore, the bonds too are expected to have long tenures – 5 to 10 years.

Also these bonds can be issued only by certain government and Reserve Bank of India (RBI)-approved entities.

Go directly to: Benefits of 80 ccf infrastructure bonds | Drawbacks of Infrastructure Bonds

What are the benefits of investing in tax saving infrastructure bonds? One benefit of these long term infrastructure bonds is that it allows you to enjoy tax benefit upto a limit of Rs 20000 under Sec 80 CCF. This limit is over and above the 1 lakh limit provided under Section 80 C of Income Tax Act. In addition, these investments are comparatively safer than ones in Stock Market.

Go directly to: Tax Benefits of PPF | PPF Calculator

As per government order, ppf account interest rate has been raised to 8.8%. Also the ceiling on investment under Public Provident Fund is now Rs 1,00,000.

Fixed Deposits vs Public Provident Fund

PPF vs FD

PPF interest rate for F.Y 2012-13 is 8.8%. In addition the interest earned is tax free is as well. So the effective rate of interest rate on Public Provident Fund is 8.8%. Now let us compare this with interest earned on Fixed Deposits. Effective rate from fixed deposit can be calculated as : (1-TR)*ROI, where, ROI is Rate of Interest on Fixed Deposit and TR is Applicabe Tax Rate.

So as you can see hardly any other fixed income investment option gives such a risk free interest rate.

PPF Tax benefit The amount invested in Public Provident Fund is eligible for tax deduction upto a maximum of Rs 100,000 under Section 80 C of Income Tax Act. Also the interest income earned is tax free. Hence PPF provides dual tax benefits. If you have opened an account in the name of your spouse or minor child along with a PPF account of your own, then the amount invested in two accounts is clubbed together.

In other words, the total amount deposited in your own PPF account and the account of your minor child can’t exceed Rs 100,000 in a Financial Year. The only disadvantage with Public Provident Fund is that the money gets locked for a period of 15 years. But that can also be turned into an advantage if you open the account early. That is, say you opened the account when you started your career. Now by the time your son or daughter are ready for marriage, your PPF account would have matured thereby providing you very useful and tax free savings. To determine PPF returns and maturity value after different time periods use following PPF calculator. PPF interest rate calculator How is interest on PPF calculated in a financial year? Public Provident Fund interest calculation is a bit complicated. Interest is calculated on monthly basis but compounded on annual basis only. Also no interest is paid for a particular month if the amount is deposited after 5th of the month. Use the calculator below to know the interest income earned from your PPF account in a financial year. Click here to go to PPF Interest Calculator

]]> http://insureinvest.in/ppf-interest-rate-2011-ppf-calculator.html/feed 0 http://insureinvest.in/laptop-insurance-policy-india-new-india-assurance.html http://insureinvest.in/laptop-insurance-policy-india-new-india-assurance.html#comments Sat, 03 Sep 2011 12:55:54 +0000 admin http://insureinvest.in/?p=725
Laptop is the quintessential part of our daily life. Highly mobile and private, lives of most of us are incomplete without it. Yet these very features make a laptop highly prone to loss and theft. While losing a laptop is an emotional trauma in itself, it also causes a major monetary loss. This monetary loss can be avoided by purchasing insurance for laptop.

Go directly to: Features of Laptop Insurance Policy | Premium Details

Laptop Insurance in India While many standalone laptop insurance policies are available, the laptop insurance policy from New Indian Assurance company stands out. Also called Personal Package Insurance for Executives and Businessmen/ Adhikari Suraksha Kavach, this laptop insurance policy is very well suited for executives who have to travel day in and out with their personal belongings (baggage, mobile phone and Laptop).

As their work involves a lot of travel, chances that these personal belongings get misplaced, stolen or lost due to other’s negligence (e.g. baggage loss due to negligence of airlines) is very, very high.

Features of Adhikari Suraksha Kavach laptop insurance policy

This insurance provides you a package which covers loss of or damage to your laptop, mobile phone, baggage, jewelery and a host of other options. The package consists of following options:

• Insurance for Laptop – The insurance company will compensate you for a loss of or damage to your laptop on a business trip anywhere in the world. It also includes loss due to theft at home. The insurance company deducts 10 per cent from the sum assured amount of laptop or Rs 5,000, whichever is less.
• Insurance for Cellular phone – The insurance firm will compensate you for any loss or damage to your cellphone due to fire, lightning, theft and burglary, malicious or accidental damage due to external agencies, earthquake, flood, storm, electrical problem and mechanical breakdown. The insurance company deducts Rs 1,000 before disbursing the sum for which cellphone was assured.

Insurance against Loss of cash – The insurance covers you against loss of money while travelling within the city or on an outstation trip. However, the maximum amount covered under the plan is a mere Rs 5,000. Baggage insurance – The insurance policy also covers against loss or damage to your baggage during a trip anywhere in the world. You will be compensated for the actual loss or up to the sum insured, whichever is less.

Image source : http://www.brandslaptop.com

• Insurance for jewellery and valuables – If you generally carry expensive jewellery or electronic devices such as digicam, iPod, etc during a journey, it may be a good idea to buy a cover for the likely value of these items.
• In addition you can also opt for Personal accident insurance.
• Mediclaim – Adhikari Suraksha Kavach policy also lets you club together a mediclaim.
• Insurance for Personal liability – This section of the package covers you for a liability in the event of accidental death or injury to a third party or damages to another person’s property caused by negligence on your part.

While opting for this insurance policy from New India Assurance, you cannot, however, opt for insurance for laptop alone. You have to choose a minimum 3 options from ones listed above.
For more details on policy features click here.

Premium rate for this laptop insurance policy

The premium rates are as follows:

• Insurance for laptop – 2% of the sum assured for laptop
• Cellular phone – 2.5 % of the sum assured for cellular phone

Loss of Jewellery or Valuables – 1% of sum assured Personal accident cover – Rs 0.45-3.00 per 1,000 sum insured* * Depending on the risk category and benefits chosen. Mediclaim – Rs 175-5,770** ** Depending on the cover and age Personal liability – Rs 25 for Rs 50,000 sum insured

For detailed terms and conditions of Adhikari Suraksha Kavach insurance of laptop click here.

As can be easily deduced from premium details above, the premium for insuring your laptop and other valuables is quite low under this policy. An insurance of Rs 1,00,000 costs you around Rs 1,400 only. In addition it saves you the headache of constantly worrying about your belongings.
To apply for this policy you can contact: Uday:9860694300​ ]]> http://insureinvest.in/laptop-insurance-policy-india-new-india-assurance.html/feed 4 http://insureinvest.in/provident-fund-india-check-balance-epf-withdrawal.html http://insureinvest.in/provident-fund-india-check-balance-epf-withdrawal.html#comments Sat, 20 Aug 2011 15:02:12 +0000 admin http://insureinvest.in/?p=690  

What is Employee Provident Fund or EPF?

Employee Provident fund or EPF is a fund made up of contributions by the employee during the time he has worked, along with an equal contribution from the employer. It is a calculated as a percentage of employee’s salary (Basic Salary+DA+Retaining allowance), normally 12%, and returned upon retirement. In the absence of any social security cover for the elderly in India, employee provident fund not only provides monetary security and helps them meet daily living expenses, it also helps them live a life of dignity and respect after retirement.

Go directly to: How to calculate provident fund in india | Provident Fund Interest Rate | | Provident Fund Balance | Know Your EPF Balance |

Benefits of Provident Fund:

Apart from being a tool for our retirement savings, Provident Fund offers numerous more benefits:

• PF entitles your to get Pension. As you must have seen in provident fund calculator above, 8.33% of employer contribution goes towards pension.
• Employee Provident Fund in India provides you insurance too – 0.5% of your montly basic pay goes towards providing you insurance. The insurance cover is maximum of –

  1) 20 times the average monthly wage (maximum of Rs 6500) – which comes to Rs 1,30,000

  2) Full amount in your PF account up to Rs 50,000 and 40% of balance amount.

Provident Fund Interest Rate The rate of interest for provident fund is fixed by the Central Government every year during March/April. While the provident fund interest rate in FY 2011-12 was 9.5%, this year it has been cut to 8.25%.

Is contribution towards Employee Provident Fund optional in India?

All industries and establishments employing more than 20 people are required to contribute towards Employee Provident Fund (EPF).

Know Your EPF Balance

Thanks to initiatives by PF Department, provident fund balance can now be checked online. To know your EPF balance go to EPF India’s website. The website shows PF account details for all offices in India. However as of today – 02 Apr 2012 – the account details have been updated till FY 2010-11 only. To learn how to use this online facility click here.

How to calculate provident fund in india? What if you want to calculate provident fund amount on your own? In this section we will explain how you can calculate your provident fund balance: 12% of your basic salary is deducted as contribution towards your Employee Provident Fund. The employer also contributes 12% of your basic salary towards employee provident fund in India.

Of the 12% contributed by employer – 8.33% of the contribution is towards EPF pension scheme, subject to a maximum of Rs 541. The remaining amount is contributed towards your Provident Fund. To make this easier we have prepared a Provident Fund Calculator. To use it click here.In case you find any issues in our provident fund calculator, mail us @ insureinvestwise@gmail.com

Source – EPF India;ET Wealth, Feb 7 2011 Edition ]]> http://insureinvest.in/provident-fund-india-check-balance-epf-withdrawal.html/feed 0