SURESH SURANA

FOUNDER,
RSM ASTUTE
CONSULTING GROUP
KK MISHRA
CEO, TATA-AIG GENERAL
INSURANCE
DEEPIKA MATHUR
SENIOR MANAGER,
DELOITTE HASKINS &
SELLS
SUDHIR KAUSHIK
CO-FOUNDER
AND CFO,
TAXSPANNER.COM
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Q
I am a retired banker. I draw pension
from my bank. I also have income
from other sources such as fixed deposits,
monthly income schemes and infra-
structure bonds. In 2012-13, I filled ITR-2. I
am not sure if this is the right form for me.
Which ITR form should I use this year?
Q
I invested `50,000 in an
online purchase of inflation
index bonds issued by the
government on August 31, 2013.
However, I have neither received
any allotment letter from the
registrar nor have the bonds been
credited to my demat account.
What should I do?
Q
I am looking for a family floater health insurance policy for myself, my wife and
my son. My son who is two years old was born with a non-restrictive doubly
committed septal defect (congenital), a heart disease. He was operated when he was
about five months old. Now he is absolutely fine and not on any medication. But, my
sons surgery is clubbed under pre-existing disease. All companies I have approached
have refused cover. What options do I have?
Q
I have three credit cards. I am
thinking of surrendering one of them.
Will it have an impact on my credit score?
I understand that you have
invested in the bonds
through an authorised bank.
Normally, on receipt of mon-
ey, the bank registers the in-
vestor on the Reserve Bank of
Indias Web-based platform
E-Kuber and, on validation,
generates the Certificate of
Holding indicating the num-
ber of units of IINSS-C held by
the investor. Considering the
facts of your case, I would
suggest you contact the con-
cerned bank with relevant
documents such as the filed
application form, bank state-
ment showing the amount
debited towards purchase of
bonds and the acknowledge-
ment generated towards pur-
chase of said bonds.
The basic tenet of insurance is risk coverage for an event that may occur in the near
future. However, insurance may not be offered for an event that has already
occurred. Congenital conditions or other health conditions diagnosed at birth are
generally not covered in health insurance policies. Any medical expenses related to
this ailment may not be covered by existing health insurance policy. You could
consider insurance policies that offer insurance coverage, excluding non-restrictive
doubly committed septal defect (congenital). However, this would have a waiting
period of four years.
Q A
&
Q
I had purchased a flat in 2008 for `17 lakh by taking a home loan. The outstanding
loan amount is `7.30 lakh. If I sell the flat now, it will fetch me `24.14 lakh. What will
be the tax implications if I choose to sell the flat?
Since you bought the flat more than three years ago, the profit from the transaction
will be treated as long-term capital gains. You can avail of the indexation benefit for
calculating the gains. Indexation increases the purchase price of the asset by adjust-
ing it against the inflation during the holding period. You have to divide the cost of the
asset by the cost inflation index (CII) of the year of purchase and then multiply it with
the CII of the year of sale to arrive at the indexed cost. The CII for 2008-9 is 582 while
the figure for 2014-15 is 1025. Hence, the indexed cost of the flat would be `29.94 lakh.
In effect, you will incur a long-term capital loss of `6.30 lakh. While there is no tax lia-
bility on you, you can adjust this loss against future capital gains. However, you must
file your tax return by the due date to be able to carry forward the capital loss.
Use of multiple credit cards and time-
ly repayment can actually have a posi-
tive influence on your credit score.
However, this could also result in
missed payments simply because of
the varied repayment dates. General-
ly, it is advisable to get rid of unused
cards. While the impact of this consol-
idation will be positive, it will reflect
in the credit score over a period.
There will be no impact if there are no
delinquent accounts. But if the cus-
tomer has a history of a few defaults,
surrendering credit cards is likely to
improve his discipline and this shall
reflect in his credit score as well.
QUESTION OF THE WEEK
I would be receiving proceeds of approximately `25 lakh from my EPF account. I plan to
invest `15 lakh to support monthly income in addition to salary from new employer
and, invest `10 lakh for short to medium term 1-2 year. Kindly advise what investment
options do I have. Are there any alternative, better ways of investing this money?
The safest option for earning monthly income is the Post Office Monthly Income
Scheme (Pomis). However, an individual can invest a maximum of only `4.50 lakh in
it. You could consider gifting your wife another `4.50 lakh so that she can invest that
portion in her name. Though her income would, most likely, be clubbed under yours,
at least your investment limit will double. The balance amount of `6 lakh could be in-
vested in two tranches of `3 lakh each in long-term fixed deposits (say, 3-5 years) of
any two reputed banks. You could choose the monthly payout option, whereby the
monthly interest will be automatically credited to your savings account. However,
you may have to open a separate savings account in each of these banks for that pur-
pose. The remaining `10 lakh could be invested in a good short-term debt fund. As
you are not investing this portion to earn monthly income, I suggest you choose the
Growth option as it is more tax-efficient. Given your time frame, I would not suggest
any equity exposure.
As your income is from pension and
interest, you can use ITR-1 for filing your
return. However, you might also have
exempt income such as dividends, tax-free
interest and maturity proceeds of
insurance policies. If this exempt income
exceeds `5,000, then you will have to use
ITR-2.
JAYANT R PAI
CFP AND HEAD OF
MARKETING, PPFAS
MUTUAL FUND
MOHAN JAYARAMAN
MD, EXPERIAN CREDIT
INFORMATION
COMPANY OF INDIA
The Economic Times Wealth, July 7-13, 2014
29
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