Prajna Capital - An Investment Guide

The earlier you begin investing, the higher will be your returns through your lifetime Traditionally, the domestic market has a high level of household savings. It is advisable to start saving and investing in carefully-selected investment instruments as soon as possible in your earning years. There are many investment options available in the market and sometimes it is quite confusing for new investors to select the right investment instruments to invest their hard-earned money in. Each investment instrument is designed to serve a definite objective and therefore, a fresh investor should take professional help to choose the right options, based on his requirements. It is very important for investors to identify various requirements and lock into a well-designed investment portfolio. Here are some parameters you can consider while chalking out an investment plan: Identify need First of all, identify the broad requirements of funds in the short term (for example, support ...

This article explains how medical insurance is tax deductible under Section 80D of the IT Act With increasing medical costs, mediclaim policies are a good option to hedge medical costs. Mediclaim policies are offered by almost all insurance companies - both in the private sector and the public sector. These policies provide insurance cover for the treatment of most of the ailments and hospitalisation. In addition to the basic coverage, add-ons are available on payment of extra premium. You should go through the coverage and exclusions clauses carefully. In some cases, pre-existing ailments are also covered on payment of additional premium. The cover may be enhanced to ailments which are not normally covered also. Some insurance companies provide cover for day care and annual medical check-ups as well. Mediclaim insurance is a good investment avenue offering tax savings and medial cover. You can insure against medical expenses for yourself or for your dependents. Mediclaim cov...

EVERYONE talks about the importance of being insured. While the debate is pertinent, are we also being taken for a ride by some insurance agents? Today the insurers offer a suite of products which talk about covering every walk of your life. While many are nice to have, the relevant question would be to arrive at the must-haves. This article gives you a run down of the ideal mix of insurance policies that is the need of the hour. 1) Term insurance If you are young and unwilling to make big financial commitments -go in for a pure term cover. It would provide basic risk protection for a period ranging from five to 20 years or even more. The sum insured will be payable to dependants on death of the policyholder. But if the policyholder survives till the maturity of the policy, there are absolutely no monetary benefits. How to take a term cover? You can take a policy at a young age; it works to your advantage. Premium at this stage is lesser and it is fixed throughout the tenure of the po...

HOSPITALISATION is something that most people hate, irrespective of the age they are. There is a sense of helplessness that overcomes you as you lie prostate on the bed, the subject (and victim) of the close study by doctors, nurses and the topic of discussion of those around. The irritation only magnifies itself in the case of an elderly person who is more prone to such emergencies. The sense of helplessness is compounded by a fear that rising medical expenses will force you to look at close relatives (mostly children) for support. Many elderly persons are unwilling to let go of their pride and request either financial or physical help from close relatives. To give elderly citizens the privilege of being independent and keeping their ever-increasing needs in mind, a few health insurance companies in the country have launched specific health insurance products for senior citizens. THE RIGHT AGE A standard complaint of many elderly people approaching companies for health insurance ...

It is easier to ensure a steady income stream through your retirement years if you plan early Some things are hard to predict and planning for post-retirement is surely one of them. The task is more challenging in the current scenario with the growing uncertainties. You are not sure whether you will drag on till 58 or 60 in your current job and the uncertainty could even come from you if you decide to hang up your boots for entrepreneurship in your mid-40s. However, this is for those who are planning to have a long innings in their current job and have a few decades on hand to plan for retirement. Here's how you can plan for a comfortable retirement: List out expenses Before you set out to plan for your life after retirement, check out your expenses. Some of those expenses may not be visible at present but could prove to be a key factor at a later stage. A classic example of this is medical expenditure. As you are aware, medical insurance too does not take care of medical e...

Some conditions that enable you to claim a tax deduction on the expenses incurred towards the medical treatment of family members You can take a medical insurance plan for yourself, your spouse, parents or dependent children. Under Section 80D, you can claim a deduction up to Rs 15,000 for the premium paid. Mediclaim policies are offered by almost all insurance companies. Mediclaim policies provide insurance cover for the treatment of most ailments and hospitalisation. In addition to the basic cover, add-ons are available on payment of extra premium. You should go through the coverage and exclusion clauses carefully. In some cases, pre-existing ailments are also covered on payment of an additional premium. The cover may be enhanced to ailments which are not normally covered also. Some insurance companies provide cover for day-care and annual medical checkups as well. For senior citizens who are tax payers and 65 years of age or more, the limit now has been enhanced to Rs 20,000...

HEALTH, THOUGH important, is by far the most neglected aspect when it comes to health expenses. Notwithstanding the rising medical expenses - thanks to the hectic lifestyle - not many people in the country today have adequate insurance covers. While the public may not be concerned, government ensures that citizens protect themselves and their dear ones with adequate medical cover by giving tax breaks on expenses incurred for getting health insured. Premium paid up to Rs 15,000 on a medical insurance policy is exempted from tax under section 80D of the Income Tax Act. A tax-payer paying premium toward insurance cover of dependant parents shall be entitled to an additional tax benefit of up to Rs 15,000. If the parents are senior citizens, then this limit gets enhanced to Rs 20,000. Thus, the maximum tax benefit that a taxpayer can now avail by insuring the health of his/her entire family (including dependant parents) is Rs 30,000 or Rs 35,000 as the case may be. MEDICAL EXPENSES S...

‘If you always do what you’ve always done, you’ll always get what you’ve always got.’ - Anonymous Most of us vow to do it early, but end up doing it in a hurry. Now is the time to start your tax savings investments. You can also use the ‘ Contrarian Style’ . Asset allocation While using tax saving investments, look at the overall asset allocation, since managing risk is the key to sustaining long term wealth creation. Tax saving avenues may restrict you to the available asset classes. While planning asset allocation, diversify across complementary avenues so that risks are managed better. A contrarian needs to study various asset cycles and accordingly choose the investment avenue where the trend is likely to change. For example, when interest rates are expected to fall, invest in a bank fixed deposit of about 7-10 years instead of just a 5-year deposit. To invest in equity or not? Most of us who have invested in equity linked saving scheme (ELSS) funds last year are likely t...

It is advisable to start investing early in life towards a retirement plan. Here are some tips: Retirement planning should be an essential element of everyone's financial planning. Individuals should start planning for their retirement funds as early as possible in their life. If we look at the way our society is shaping (increase in average lifespan, nuclear families etc), it becomes even more important to plan carefully so that you are totally independent in your golden years. Planning for retirement is a comprehensive process for determining how much money you will need at the time of retirement. Some people feel that retirement planning is important when you cross 40 years of age. It then becomes difficult to build a good corpus within the next few years and eventually these people end up investing in risky investment instruments. They invest their hard-earned money in risky stocks, where the returns are generally not certain. There are many insurance instruments available in...