How Stress Impacts Your Health?

How Stress Impacts Your Health?

How Stress Impacts Your Health?

Stress is a natural reaction to the events we experience daily. It could be triggered by daily events such as running late for a meeting, being stuck in traffic, working on a deadline, prolonged screen hours, meeting everyday responsibilities or could be caused due to transitioning life events like preparing for an examination, getting diagnosed with a disease, war, loss of a loved or moving to a new place for better career opportunities. Short-term stress can be beneficial as it helps you cope with serious situations, and meeting goals but long-term stress also known as chronic stress can have several negative impacts on your health. In this article, we have tried to summarise how chronic stress can harm your health, and how it can be managed.

                                                                                                                           Richa Pande

Let’s begin by understanding what happens to your body when you experience stress. In situations of stress, your body responds to it by releasing hormones that helps you to cope up with the situation that’s causing the stress.  This reaction to stress is also known as “fight-or-flight” response. In our hunter-gatherer ancestors, it acted a survival mechanism that enabled our ancestors to react quickly to life-threatening situations which involved a series of hormonal changes and physiological responses that enabled a person to cope up with the situations. Today, our body react to some triggers in similar manner, but they are not life-threatening. This includes work pressure, personal problems, taking up an exam, etc. If the stress levels stay elevated for longer, then it can take a toll on your health. Chronic stress can cause a variety of symptoms and affect your overall well-being. 

Have you noticed changes in your body during a stressful situation, say, when you are delivering a speech in public. Your heartbeat increases, you start breathing heavily, you might start sweating.  This is because during the stressful situations, our body releases stress hormones in the blood stream which causes these changes. If someone experiences continuous stress every day, these hormones are released in their bloodstream for a longer duration, and they can experience health concerns such as fatigue, sleeplessness, weight gain, increased blood sugar levels, increased blood pressure, irritable mood, irregular menstruation, poor sleep, or even in extreme cases anxiety and depression.

Stress can also be bad for your heart health as stress can cause irregular heart rate and rhythm, increased blood pressure, chronic intrinsic inflammation, and reduced blood flow to the heart. These hormonal surges can damage blood vessels and arteries, increasing blood pressure and raising risk of heart attacks or strokes. Prolonged stress can have negative impact on your digestive health as well. It can cause acid reflux, diarrhoea, constipation, stomach aches, heartburn, and can also increase your risk for having ulcers. Stress can also contribute to the build-up of adipose tissue and weight gain by increasing appetite and increasing storage of unused nutrients such as fat. Release of these stress hormones can weaken your immune system and reduce body’s response to infections. Individuals experiencing chronic stress are more susceptible to infections and prolong recovery from an illness or injury. Individuals with chronic stress can also experience behaviours such as overeating, alcohol or drug abuse, and social withdrawal. Stress can also lead to irregular, heavier, or more painful periods in women and can worsen the symptoms of menopause in women.

Tips on Stress Management 

Minimize screen time  

Several studies have linked excessive increased screen with increased levels of stress. Increased screen time can also negatively affect sleep, which may also lead to increased stress levels. Try to limit your screen time and take breaks in between if your need to work on screen for long hours.

Indulge in self-care

Understand that you can’t control all the stress triggers, but you can train yourself to respond towards them. Practice relaxation techniques including deep abdominal breathing, visualizing tranquil scenery, chanting, relaxation baths, massages, spas, and yoga to help you cope up with stress. It has also been found that taking up many responsibilities may leave you feeling overwhelmed, increasing your stress levels. Another way to manage stress is to focus on your priorities and avoid procrastinating as it may hamper your productivity and leave you stressed, negatively impacting your health and sleep quality.

Start being physically active

Physical activity has been found to have a calming effect on individuals experiencing stress. Practicing stretches or taking walks between work hours have been found to be effective against stress.

Nutrition supplements

Micronutrients can play an important role in determining body’s stress response and elevating your mood levels. Some dietary supplements may help reduce stress levels and improve your mood. For example, magnesium plays an important role in determining body’s stress response. Taking magnesium supplements have been found to improve stress levels. Coupled with vitamin B6 supplements, magnesium supplementation works in a better manner.  Make sure your consult a healthcare professional to take recommended dosage of these supplements. 

Maintain a healthy sleep pattern

Your stress levels are closely interlinked with your sleep pattern. Individuals who sleep for less than eight hours have been reported to have more stress levels than those who sleep at least eight hours every night. Limit your screen time as increased screen timings are linked with disturbed sleep patterns. It’s also important that you keep a check on the caffeine intake. Caffeine is found in coffee, some chocolates, some soft drinks, and energy drinks. Consuming too much caffeine may worsen and increase feelings of anxiety and harm your sleep pattern. People have different thresholds for caffeine.  It’s recommended to keep caffeine intake under 400 mg per day. 

Spend time with your loved ones

Spend time with your friends and family. Plan recreational activities with them. It has been also found that people who enjoy close relationships with family and friends can successfully manage their stress levels. 

Eat a healthy diet 

Ensure that you have a well-balanced diet that has all essential macronutrients and micronutrients. Have foods rich in protein, omega-3 fatty acids, vitamin b complex, and magnesium. Also, include probiotics food in diet and avoid sugary foods.

Multi Sourced Edible Oil (MSEO) – Health Benefits

Multi Sourced Edible Oil (MSEO) – Health Benefits

Multi Sourced Edible Oil (MSEO) – Health Benefits

Edible Oil

The nutritional habits of people have undergone a radical change over the last few years.1 Studies have shown that the food we eat and the day-to-day routine choices we make is directly correlated with various lifestyle diseases.2 Therefore, careful selection of the food consumed and following recommendations set after careful investigations by organizations and governments are critical for our health.

Nutrition consists of three essential macronutrients:  carbohydrates, proteins and fats. These three perform key functions in the body.3 Previously, fats have been predominantly known for being high energy sources. Today, they account for being important parts of our physiological and biological body functions. Fats are a part of structural components. They protect organs, insulate the body, and carry fat-soluble vitamins, amongst various other roles in the body. 4

Sources of Fat and Vegetable Oils

Fat can be obtained from poultry, fatty fish, dairy products, nuts, seeds, and edible oils. Vegetable oils are the predominant source of fat in our diet.5 In India, cooking oil forms an integral part of the household and is involved in every dish and hence, is an important contributor to our health. The nutritional quality of an oil has become important enough to investigate, because of the role of fat in many nervous and cardiovascular diseases.

The nutritional quality of an oil depends upon its fatty acids composition, presence of essential fatty acids and natural antioxidants. Fatty acids are the building blocks of fats and oil and are classified based on chain length and amount of desaturation (number of double bonds) – SFAs (Saturated fatty acids) with no double bonds, MUFAs (Monounsaturated Fatty Acid) which have 1 double bond, and PUFAs (Polyunsaturated Fatty Acid) that have greater than or equal to 2 double bonds.6 SFAs have been associated with increasing total and bad cholesterol compared to MUFAs and PUFAs that have been known to reduce cholesterol levels and benefit heart health. Similarly, studies have also shown that replacing SFAs with PUFAs followed by MUFAs lowers bad cholesterol.7, 8, 9  

The Need for Multi sourced Edible Oil (MSEO)

Individual fatty acids have their pros and cons. Hence a balanced ratio of SFA: PUFA: MUFA is necessary. Single seed oil may not provide a balanced ratio and therefore, the National Institute of Nutrition (India) recommends rotating edible oils, using a combination of oils.10 Although, rotating oil is recommended, scientifically combining oils to derive maximum functional and nutritional benefits can be a challenge. Based on this, Multi sourced edible oils (MSEO) are customized according to Indian cooking habits, with greater attention to health. MSEO category is governed by two regulatory authorities i.e., FSSAI and AGMARK to bring stringent control on Quality and Safety. Very few other food categories like baby food and packaged water have such multiple regulations.11

MSEO offers enhanced benefits that improve nutritional, physiological and functional health. MSEO focuses on a balanced MUFA: PUFA content, which together with essential fatty acids and natural antioxidants can reduce bad cholesterol and be beneficial against cardiovascular diseases.12 In concurrence to this, a study testing a synergistic blend of rice bran oil (RBO) and safflower oil (SO) (70:30) led to significant reduction in plasma cholesterol, LDL-C and had a positive impact on inflammatory markers in blood. The authors concluded that RBO along with SO magnified hypocholesterolaemia efficacy compared to single oils alone13, 14. Similarly, in 2010, studies have been performed with a blend of RBO:SO (80:20) and showed significant antihyperlipidemic effects. 15,16 Moreover, a blend of rice bran oil and sesame oil in an 80:20 blend yielded beneficial effects by improving lipid profiles as well as glycaemic control significantly in diabetic patients and pre-diabetic subjects17. A blend of rice bran oil with olive oil in 70:30 ratio showed lipid lowering properties18. Hence, multisource edible oils are targeted to achieve beneficial functional and nutritional properties for holistic nourishment, health, and well-being.

References:

  1. K., & Giddiah. R. Societal Changes And Its Impact On Food Habits, INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY, FEBRUARY 2020, RESEARCH VOLUME 9, ISSUE 02, ISSN 2277-8616
  2. Farhud DD. Impact of Lifestyle on Health. Iran J Public Health. 2015 Nov;44(11):1442-4. PMID: 26744700; PMCID: PMC4703222.
  3. Kumar, V., Shukla, A., Sharma, P., Choudhury, B., Singh, P., & Kumar, S. (2017). ROLE OF MACRONUTRIENT IN HEALTH. World Journal of Pharmaceutical research. 373 – 381. 10.20959/wjpr20173-7955.
  4. European Food Information Council- Functions of fat in the body
  5. Lyndsey D. Ruiz, BS, DTR Sheri-Zidenberg-Cherr, PhD Center for Nutrition in Schools Department of Nutrition University of California, Davis May 2016
  6. FAO, Fats and Fatty acids in Human Nutrition. ISSN 0254-4725
  7. Katherine M. Livingstone, 6 – Authorised EU health claim for MUFA and PUFA in replacement of saturated fats, Editor(s): Michele J. Sadler, In Woodhead Publishing Series in Food Science, Technology and Nutrition, Foods, Nutrients and Food Ingredients with Authorised EU Health Claims, Woodhead Publishing, 2018, Pages 87-100, ISBN 9780081009222, https://doi.org/10.1016/B978-0-08-100922-2.00006-1.
  8. Book: Healthful Lipids, Oi Ming Lai- Department of Biopress Technology, Malaysia
  9. Weech M, Altowaijri H, Mayneris-Perxachs J, Vafeiadou K, Madden J, Todd S, Jackson KG, Lovegrove JA, Yaqoob P. Replacement of dietary saturated fat with unsaturated fats increases numbers of circulating endothelial progenitor cells and decreases numbers of microparticles: findings from the randomized, controlled Dietary Intervention and VAScular function (DIVAS) study. Am J Clin Nutr. 2018 Jun 1;107(6):876-882. doi: 10.1093/ajcn/nqy018. PMID: 29741564.
  10. Dietary Guidelines for Indians- ICMR-NIN
  11. FSSAI- Compendium- Food Regulations
  12. Hashempour-Baltork, F., Torbati, M., Azadmard-Damirchi, S., & Savage,G. Vegetable oil blending: A review of physicochemical, nutritional and health effects, Trends in Food Science & Technology, (2016), Volume 57, Part A, Pages 52-58, ISSN 0924-2244,

https://doi.org/10.1016/j.tifs.2016.09.007.

  1. Sugano, M., & Tsuji, E. Rice Bran Oil and Cholesterol Metabolism, The Journal of Nutrition, Volume 127, Issue 3, March 1997, Pages 521S–524S, 
  2. Upadya H, Devaraju CJ, Joshi SR. Anti-inflammatory properties of blended edible oil with synergistic antioxidants. Indian J Endocrinol Metab. 2015 Jul-Aug;19(4):511-9. doi: 10.4103/2230-8210.159063. PMID: 26180768; PMCID: PMC4481659.
  3. Malve H, Kerkar P, Mishra N, Loke S, Rege NN, Marwaha-Jaspal A, Jainani KJ. LDL-cholesterol lowering activity of a blend of rice bran oil and safflower oil (8:2) in patients with hyperlipidaemia: a proof of concept, double blind, controlled, randomised parallel group study. J Indian Med Assoc. 2010 Nov;108(11):785-8. PMID: 21510583.
  4. Kennedy, & Menon, Savita & Epuru, Suneetha. (2010). Study on effect of Rice bran and sunflower oil blend on human lipid profile. Indian Journal of Applied and Pure Biology. 25. 375-384.
  5. Hota, Srinivasan, D., Sahoo, A., Behera, J., Patro, K., Bandyopadhyay, B., Sehgal, D., & Rajesh. (2020). Possible Anti-Diabetic and Anti-Hyperlipidemic Efficacy of Blended Rice Bran Oil with Sesame Oil in Comparison with Soybean Oil: A Clinical Investigation in Pre-Diabetic and Diabetic Individuals. 10.35248/2167-0870.20.10.419.
  6. Choudhary, M., Grover, K., & Sangha, J. (2013). Effect of Blended Rice Bran and Olive Oil on Cardiovascular Risk Factors in Hyperlipidemic Patients. Food and Nutrition Sciences. 04. 1084-1093. 10.4236/fns.2013.411141.

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Mutual Funds Investing: Is It That Hard?

Mutual Funds Investing: Is It That Hard?

Mutual Funds Investing: Is It That Hard?

Do you get heavy thoughts after hearing words like mutual funds, SIP, investment, etc.? Do you start feeling that this is not your thing? In reality, this is because you have either incomplete information about these things, or whatever information you have is wrong. Despite the regular advertisements of the Association of Mutual Funds in India (AMFI), people still have many misconceptions about investing in mutual funds, which we will try to clear today.

                                                                                                                                   Subas Tiwari

Following are some of the most common misconstructions about mutual funds.

  1. You need to be an expert to invest in mutual funds

Investors often avoid mutual funds as they do not know much about it. There is a common argument, ‘I don’t understand these.’ It is a wrong argument that you need to be an expert to invest in mutual funds. The reality is that mutual funds are the best option for those who do not understand investing. In this, your money is managed by professionals and the person do not have to worry about which shares to buy and when to sell. In this, the fund manager chooses the stocks for you.

  1. How much to invest

The second myth is related to the quantum of investment. Many investors feel that they need to invest a huge amount in mutual funds to earn good returns. This is not right. You can invest Rs 500 per month through SIP. Gradually you can increase your investment. In such a situation, if you have a small amount, then do not hold back from investing.

  1. Mutual funds invest money only in stocks

Investors who do not have much knowledge of mutual funds often assume that the funds invest only in equities. If there is volatility in the equity market, it will sink their money in mutual funds. You should know that debt mutual funds account for 66% of the assets and management of mutual funds. Equity mutual funds account for only 32 per cent of the market. In such a situation, if you want higher returns and better tax benefits, but want to avoid the risk of equity mutual funds, then you should invest in debt funds.

  1. You can’t go wrong with five star rated funds

In this, past performance does not guarantee future returns. Mutual fund trackers such as Value Research and Morning star give ratings to funds and this gives investors some ideas. However, keep in mind that this rating is subject to change. A five-star fund can convert into a three-star or two-star fund, depending on its risk-adjusted performance and volatility in returns.

  1. SIP is the name of an investment product

A lot of people think that “SIP” is the name of some investment products other than mutual funds. So they say – “I want to invest in SIP”. However, SIP means a systematic investment plan, which just means a way to regularly invest only in mutual funds. In this, a pre-fixed amount is automatically deducted from your account and gets invest in mutual funds on a pre-defined date.

  1. I can’t stop SIP in between once I start it

Another myth that stops investors from entering mutual funds is that they think starting SIP for X years, is a commitment they can’t break in between and they will face some penalty if they stop their investments.

A lot of people do not want to give any PROMISE of regular payment. However, the truth is that once you start the SIP, you can anytime stop the SIP in between. So don’t worry while starting the SIP for the next 5, 10 or 30 years. The day you want to stop it, it can be stopped with just one notification!

  1. Lower NAV is cheaper than higher NAV

Most of the mutual fund’s investors think that a smaller NAV mutual fund is a better deal compared to a higher NAV mutual fund. While this may be sometimes true in case of stocks because a Rs 10 stock has the potential to grow faster than a stock with Rs 10000 stock value.

But in case of mutual funds, NAV has no significance. It’s ZERO!

Because your mutual fund’s appreciation has everything to do with the appreciation in NAV value in percentage terms and not an absolute value. I mean if you invest Rs 10 lacs in a fund with NAV of Rs 10, and if the mutual fund performs great and in the next 5 yrs it doubles in value, then the NAV will rise to Rs 20 and your fund value will rise to Rs 20 lacs.

However, if the NAV was Rs 10,000 per unit, still the effect would be the same for you. The NAV would have increased to Rs 20,000 and your value would have increased to Rs 20 lacs. No difference as such. So stop thinking that a fund is better (especially NFO’s) just because its NAV is lower.

  1. Dividend in mutual funds is better than growth option

When you choose a mutual fund to invest, you have to choose between the dividend and growth option. Now a lot of investors think that dividend option is better because they are getting “extra dividend”. However, it’s not true.

Dividends are not extra!, The NAV comes down by that margin after the dividend is paid, on top of it, if the fund is not an equity fund, a dividend distribution tax is first paid by AMC, which lowers the return of the investor. However, in the case of growth option, the money remains in the fund itself.

  1. Mutual funds means stock market

One of the most common myths is that mutual funds are highly risky because they invest in stocks. However, this is half true. Only equity mutual funds invest in stocks and are risky (in fact volatile is the right word, not risky).

There are other categories of mutual funds called debt mutual funds, which do not invest in equities. They invest in bonds, govt. securities, and other secured investments. While debt funds have their own risks and even their returns are not 100% stable, still, debt funds are highly stable when it comes to returns and often provide better tax-adjusted returns then most of the bank fixed deposits.

  1. You have to invest big amounts in mutual funds

Many small investors stay away from mutual funds and stick to recurring deposits and other products because they think that mutual funds are for big investors and one has to invest big money in it. However, you can start a monthly investment of even Rs 1,000 per month in most of the funds. If you want to invest on the onetime basis, the limit is Rs 5,000.

So someone who is just earning Rs 10,000 per month and wanted to invest 10% of his income, can also start mutual funds SIP.

  1. Mutual funds are always for long term

Mutual funds are marketed as long term investments most of the time. However, it’s not always the case. There are mutual funds called liquid mutual funds and even short term debt funds which can be used for short term investment horizon like 6 months or 2 years.

Only in case of equity mutual funds, it’s suggested that one should invest from a long term perspective to reap the maximum benefits.

  1. Mutual funds offer guaranteed returns

No, Not always. Actually never!

Mutual funds never offer a guaranteed return like a fixed deposit. This is one reason why many investors who are totally in love with “assurity” shy away from investing in mutual funds.

Various categories of mutual funds offer various return range. An equity mutual funds can offer return anywhere from -50% to 100% return in a year (just a high level estimate). However, a debt fund can also deliver a return ranging from 5% to 15%. And a liquid fund will mostly give a return in range of 6-8%

So the returns are not guaranteed, but highly probably within a range depending on its category. Also note that as the investment horizon shifts from 1 year to 10-20 years, the probability of getting a stable return within a range increases.

  1. I will lose my money if the mutual fund’s company goes bankrupt

This is common thinking, but not true. Mutual funds are highly secured in terms of structure. The way it’s designed and regulated by SEBI, it’s almost impossible for investors to lose money due to a scam or AMC going bankrupt. Your mutual fund’s units does not lie with AMC (it just takes the decision of buying and selling). Units and all the money lies with the custodian and highly secure.

  1. Past returns in mutual funds indicate future returns

Not correct. While past returns can surely tell you that the fund did very well in the past and there is some probability due to legacy that it will perform well. But it’s not written on stone.

  1. More mutual funds means diversification

Diversification is an ill-treated word, at least in mutual funds. Just because you invest in more mutual funds does not always mean that you have achieved diversification. The reason is simple. A mutual fund invests in close to 50-100 stocks. So when you invest in an equity mutual fund, your money is already well diversified across sectors, types of companies, etc. When you add another mutual fund, most of the stocks might be the same and also in the same proportion, giving you very little extra diversification.

  1. I can start SIP and forget it for long term

A lot of investors think that once they have started a SIP investment or even lump sum investment, they can just sit back and relax for the next 10-20 years. This is not suggested.

Mutual funds need constant review every year. So you should at least keep an eye on your fund performance. Do not overdo it and start looking at weekly and monthly returns, but do that in 1-2 years.

  1. SIP can be done only on a monthly basis

No, an SIP can be done even on a weekly or quarterly basis. While monthly SIP is the most suitable for all (we all get monthly income), but at times if you want to invest on a quarterly basis or weekly basis, even that can be done. However, note that it depends on a mutual fund if it gives you the facility of weekly/quarterly SIP or not. Most of them do, but at times, some mutual funds might choose to not have that option.

  1. Mutual funds investments are complicated

While investing in mutual funds is definitely not as simple as creating a fixed deposit, it’s not too complicated. You need to do a one-time documentation to start with and once it’s done, you can buy/redeem mutual funds online.

  1. I can’t add more lump sum amount in my fund where I do SIP

A lot of investors feel that if they have started a SIP in a fund XYZ, then they can’t add additional money in the same fund under the same folio. It is not true. When you invest in a fund (either SIP or one time), you get a folio number. This is like an account number. You can anytime add any amount of fund to the same folio.

  1. You need documentation every time you want to invest in mutual funds

Again a big myth. Once you are done with the first time documentation, after that every time you want to invest and redeem or switch, you can do it online. The documentation comes into picture only when you want to do changes like your email id, phone or address, etc.

  1. Mutual funds are not for retired investors

This is entirely false. There are various kind of mutual funds which are suitable for retirement needs. You can invest your hard-earned money in debt funds and keep them secure while it’s growing at a decent return. One can choose an option for a monthly dividend and get an income.

  1. I can’t invest in mutual funds because I need high liquidity

Again a myth. Mutual funds are highly liquid and you can get your money ranging from instant redemption to 3-4 days depending on the fund type. If you want very high liquidity, then you can invest money in liquid funds, from where you can redeem in 24 hours.

  1. I can’t skip an SIP payment once started

A lot of people are worried about what will happen if they skip the SIP in a particular month when they are low on funds?

If your bank account does not have sufficient money for a month, then on the SIP date the SIP will not get processed, but from next month it will go fine again. Mutual funds companies does not charge any fine or penalty for this, but your bank can levy a small charge for this like Rs 200/300.

I think it’s good, because that way you will be disciplined enough to make sure that your SIP’s go on time, but also does not hurt you too badly in case of emergency.

  1. TDS is applicable when mutual funds are sold and redeemed

Mutual funds are not like fixed deposits or recurring deposits. When you sell your mutual funds, there is no TDS which is deducted. You get the full amount in your bank account and then you need to figure out the tax amount and pay it later. However there is no exception to this. In the case of NRIs, if they redeem their debt funds, then TDS is applicable.

  1. My money will be locked in mutual funds like other products

Many investors think that in mutual funds their money is locked for a specific period. In case of mutual funds, most of the funds are open-ended funds, which means that you can invest any time and redeem anytime.

There is no lock-in except in ELSS funds (which comes under 80C) and close-ended funds (which specifically tell you the duration for lock-in).

  1. I can’t switch from one mutual fund to another fund

Many people do not know that it’s possible to move from one fund to another fund across the same fund house. You don’t need to sell the fund, get the money in your account and then again invest in another fund of the same fund house.

  1. Mutual funds of bigger and trusted brands are always better

Do you know that LIC also has mutual funds business?

However, LIC mutual funds are one of the worst-performing funds across the whole MF industry. LIC mutual funds are not the same as LIC insurance.

In the same way, SBI mutual funds should not be confused with SBI bank. A lot of first-time investors in mutual funds investors want to go with trusted brands like LIC, SBI, or HDFC.

  1. I can’t partially withdraw from mutual funds

Yes, you can. Mutual funds can be redeemed in parts. You just have to choose the number of units you want to redeem or the amount you want to redeem (it will calculate the units required). So that way, it’s a great product. Because in case of deposits it’s either the full amount or none.

Source courtesy: Jago Investor

Mistakes to Avoid While Buying Life Insurance Policy

Mistakes to Avoid While Buying Life Insurance Policy

Mistakes to Avoid While Buying Life Insurance Policy

After the advent of Covid-19, buying life insurance has become a priority for many people. This epidemic has killed lakhs of people in the country. Financial strain has made people understand the value of life insurance. However, people often make common mistakes in buying it. Today, we will be discussing this mistakes and how to avoid them.

                                                                                                                              Subas Tiwari

It is good for people to be aware about life insurance and taking steps to protect themselves and their loved ones from any financial worry. Given below are some of the most common mistakes people make.

  1. Delay in decision making-People postpone the decision to buy life insurance for many reasons. People of 30-35 years do not understand the need to spend on this. The reason is that they do not see any threat to life. Experts say that the longer you do not buy life insurance, the longer the risk remains.
  2. Not taking term plan- In a regular term plan, the sum assured is paid to the nominee if the policyholder dies during the policy term. However, no maturity benefit is available if the policyholder survives the policy term. Most of the people do not take a term plan because of this. Most of the life insurance policies are taken by looking at the investment aspect with insurance.
  3. Hiding important information- Many people hide important information while buying a policy. These include pre-existing diseases, medical history in the family, smoking, etc. Concealment of such information or providing forged documents at the time of purchase of the policy may result in rejection of the claim.
  4. Taking a long term policy- Some insurance companies offer policies of 100 years or more. Experts say to avoid such policies. In this, a higher premium has to be paid for the increased cover.
  5. Buy short term policy-Buying a policy for too short a term is also a mistake. Buying life insurance for 45-50 years of age can be cheap. But, after the term of the policy is over, the risk comes on the family.
  6. Opting for return of premium- In such policies, if the policyholder survives the policy term, the entire premium is returned. This might sound like a good deal. But, this is nothing but bait to trap the fish. In this you pay more premium.
  7. Not reviewing life insurance- There are many such phases in life when the responsibility of the people increases. Marriage or the birth of a child in the family are such stages. At that time the need for life insurance increases.
  8. Choosing the wrong payment option- Most life insurance policies come with different payment options. On the death of the policyholder, the payment is made to the nominee based on the option chosen. It is important to choose the right payment option.
  9. Selecting limited pay mode- In the regular payment option, the premium has to be paid annually for the entire term of the policy. But, you can also choose the ‘Limited Pay’ option. In this, you have to pay only for a few years. However, experts will ask you to be wary of its benefits.
  10. Family not knowing about the policy- This is the biggest mistake made in buying life insurance. When many people buy policies, they do not inform their family members about it. They are not able to get its benefit when needed. Therefore, not only should family members should be informed about the policy, they should also be made aware of its features.

Choose Your Life Insurance Company Based on this Criteria

  • Persistency Ratio-This number reflects the number of people who renew their policies with the insurance company every year. It reflects the company’s retention capability and trustworthiness. The higher the persistency ratio, the more the customers trust the brand. When looking at persistency ratio, look for two numbers-people who have renewed their policy after one year and after five years. Ideally, both should be high.
  • Premium Rates- Today, you can compare rates for term plans on various life insurance-related websites. While a lower premium rate is always welcome, since you would be paying it for a long time, let that not be the sole criteria. The company offering the lowest premium may have a lot of exclusions. Ideally, you should choose a company whose rate is around the industry average. Also, check the amount of commission that you pay for your insurance — the lower the commission, the lower the premium.
  • Claims Settlement Ratio (CSR)– This indicates the percentage of claims settled by the company. The CSR is one of the most important numbers that you should look at before you buy insurance. The higher the CSR, the higher the number of claims settled. According to experts, in the life insurance business, any CSR less than 95% should be a red flag. Again, do not look at just the current year’s figures. Look at data for the last five years at least.
  • Percentage of Grievances Solved– This is the number of grievances solved as against the number of complaints received by the insurance company. The higher the percentage of grievances solved, the better it is. You can also check the number of pending claims at the end of each year. It shows how responsive the company is towards customer complaints. Hence, it is an important metric, especially since life insurance is a long-term product.
  • Company Size and Solvency Ratio– A life insurance contract is a long-term commitment. Therefore you want to be sure that the company you buy the cover from will be around, say, 25-30 years down the line when a claim on your policy is likely to be made. There are two ways to check this. First is the size of a company, in terms of its total assets, profitability, market share and growth. The second is the Solvency Ratio. This is an assessment of an insurance company’s financial capabilities. IRDAI (Insurance Regulatory and Development Authority of India) norms dictate that each company should maintain a solvency ratio of 150% to minimize risk and avoid bankruptcy. The higher the solvency ratio, the greater the chances of your insurance claims being honoured. When you look at a company’s solvency ratio, don’t just go by the current number. Check out for at least the last five years.

Keep These Things in Mind While Buying Life Insurance Policy

If you are looking to buy life insurance, are you doing so without having a clear financial or life goal in mind? Sure, it is vital to look at external features such as the life insurance coverage amount offered or the premiums required. But these are not the only factors to consider when buying life insurance. Take a look at what you must consider before you decide on a life insurance plan.

  1. Assess the amount of life insurance coverage needed

The first step before scouting for life insurance plans is to assess the amount of life insurance coverage you and your family members will need in your presence and absence. For this, you will need to calculate the actual monthly and annual expenses of your family. Consider:

  • Monthly day-to-day expenses (household groceries, utilities, bills)
  • Any pending loans or investments (and the money that goes towards them)
  • Any future goals and liabilities (such as a child’s higher education or marriage costs)
  • A rainy-day fund (for unforeseen events such as illness, accident, early retirement)

Add the approximate costs of all these needs and multiply it by the inflation rate 10 to 20 years from now. Factoring in the inflation rate is essential as the price of goods and services goes up every year, but the value of money stays the same. Based on this sum value, you should select the life insurance coverage amount.

  1. Understand the type of risk involved in the life insurance plan

Life insurance plans fall into two broad categories. One kind is a non-linked plan whose benefits/returns are not associated with the equity and debt market performance. Such plans give guaranteed returns and benefits to the buyer and carry very low risk. The other kind is the market-linked insurance plan. In such plans, a portion of the premiums paid by the buyer goes towards making investments in the equity, debt or hybrid market products. The remaining part goes into guaranteeing the life insurance coverage to the policyholder. These plans and the returns accrued under them depend on the performance of the invested premiums and carry a mid-level to a high-level risk. Depending on your appetite for risk (profit and loss), you can choose a suitable life insurance plan.

  1. Check the type of life insurance plan and extra riders offered with it

Life insurance plans are of various types. There are:

  • Term Insurance Plansthat offer a base death benefit to your loved ones on your demise
  • Unit-Linked Insurance Plansthat give the dual advantage of a guaranteed death benefit and income growth
  • Child education plansthat give the death benefit and the option to save and grow your income at the same time for fulfilling your child’s life needs
  • Retirement plansthat give a guaranteed death benefit and the choice to receive monthly income payouts post-retirement
  • Group insurance plansthat give life and health insurance coverage to corporate employees

Selecting the type of life insurance plan should be second on your checklist as the wrong plan can give you only inadequate financial protection. Furthermore, life insurance plans offer extra riders (additional coverage) for an added layer of protection against unforeseen events. These include:

  • A critical illness riderthat gives a fixed lump-sum amount on the diagnosis of a critical illness
  • A waiver of premium riderthat waives off the payment of premiums on the diagnosis of a critical illness
  • An accidental death benefit riderthat pays a fixed lump-sum amount in case the insured dies due to an accident
  • An accident disability riderthat waives off the payment of future premiums or gives a fixed benefit amount in case the insured develops a permanent injury due to an accident

So, before you settle on a life insurance plan, be sure to see the riders offered and the premiums charged for them.

  1. Check the insurers claim settlement ratio and record

This is a step that can be easy to miss before buying a life insurance policy. The hallmark of a reliable and exceptional insurance company is not only its claim settlement ratio but also its claim history. The claim settlement ratio is the number of insurance claims settled by an insurer during a given financial year. While it is crucial to account for that, you should also see the insurer’s performance in the industry, the consistency of their claim settlement ratio, financial strength, persistency and their turnaround time for settling claims. Buying a life insurance plan without receiving assurance that you will get the benefits promised under it on time nullifies the entire purchase.

  1. Read the life insurance plan in its entirety before buying it

Life insurance plans cover several scenarios but not every single one of them. Each life insurance plan has a specific set of exclusions (events that they do not cover) that you can find mentioned in detail in the policy wordings or plan brochures. Moreover, irrespective of the life insurance coverage and benefits the insurance company claims to provide – always check the policy wordings to see whether there are any limitations on the benefits provided. Some of the general policy exclusions include:

  • Death due to engaging in an adventure sports activity
  • Death under the influence of alcohol/drugs/narcotics
  • Death due to a terrorist attack/riot activity
  • Death due to suicide within 12 months of purchasing the life insurance policy
  • Death due to engaging in harmful activities/self-harm

Points to Remember

  • Before searching for a life insurance plan, it is essential to know what you are looking for and do the necessary research.
  • You are also advised to consult your financial advisor before investing to know if the plan is suitable or not.

Keeping these factors in mind will not only help you save your hard-earned money but also lead you to the right life insurance plan.

Home Buyers Interests Put Above All

Home Buyers Interests Put Above All

Home Buyers Interests Put Above All

In civil appeal No. 3778 of 2020 in the Supreme Court, the bench of Judges M.R. Shah and B.V. Nagarathna, in case of Amit Katyal V/S Meera Ahuja & others, allowed the withdrawal of Corporate Insolvency Resolution Process (CIRP) against a builder in an application filed by three homebuyers in view of a settlement plan agreed upon by the majority of them. In the larger interest of the homebuyers, the apex court exercised power under article 142 to permit withdrawal of the CIRP proceedings and set aside all matters pending between the parties. This order was passed on March 03, 2022.

Apex Court held the Insolvency and Bankruptcy Code (IBC), 2016 – The object and purpose of the IBC is not to kill the company and stop/stall the project, but to ensure that the business of the company runs as a going concern.

                                 Dr Prem Lata

What is Article 142 of the Constitution of India?

The Indian Judiciary and the Constitution of India believe that every citizen of India must get “complete justice”. The Constitution of India under Article 142 grants the power to the Supreme Court for passing any decree to do “complete justice”  Further, there is no specific guideline or rule provided by the law which explains when, where and under which circumstances the Apex Court can invoke the said article to do “complete justice”.

This was yet another way by which homebuyer’s interest is protected by making an arrangement to settle their disputes in a very short procedure before National Company Law Tribunal (NCLT). For years, home buyers were dependant on Consumer Commissions only for the redressal of their grievance and refund of their hard earned money invested with builders. Then came the RERA (Real Estate Regulation and Development) Act 2016, which came as an additional remedy to home buyers and made a remarkable change in the real estate sector. The amendment in section 5 of IBC 2016 made home buyers financial creditors which was another boost for consumers. With this, yet another window opened for investors in developers’ projects and now NCLT also came ahead in settling accounts between disputing parties.

The courts are creating history by adopting very positive approach towards the aggrieved consumers through number of judgments during the last decade which is a big relief to the general public at large. In the above case, the Hon’ble Supreme court has exercised its power under Art 142 of the constitution (which is done in rare cases) and given relief to both the parties, home buyers as well as the developers and brought an end to the litigation.

Details of the Case

Home buyers in the housing project, Krrish Provence Estate at Gurgaon had gone against Jasmine Buildmart Pvt and invoked Section 7 of IBC 2016 before the Adjudicating Authority/NCLT, Delhi in CP No. 1722/ND/2018 seeking initiation of CIRP against Builder, the Corporate Debtor and obtained order in their favour. NCLT/Adjudicating Authority admitted Section 7 application on 28.11.2019 and appointed the Interim Resolution Professional ‘IRP’ and declared a moratorium. The original applicants had sought refund of an amount of Rs.6, 93, 02,755/- due to an inordinate delay in the completion of the project and failure to handover possession within the stipulated time and could not complete the project even after a period of eight years. Builders knocked at Supreme Court’s door for stay on the insolvency proceeding against them as ordered by NCLT, in view of the fact that parties have settled the matter between themselves and the petitioner/home buyers be allowed to withdraw their application under section 7 of IBC 2016.

How was the Matter Resolved?

It was revealed before the Court that out of 128 home buyers of 176 units, 82 home buyers have settled the dispute with the corporate debtor including the original applicants/respondent nos. 1 to 3 who had initiated the IBC proceedings. It was reported that the original applicants/ respondent Nos.1 to 3 as well as 79 home buyers have settled the dispute with the corporate debtor in terms that the corporate debtor shall complete the entire project and hand over the possession to the home buyers who wanted possession within a period of one year from today. In view of this development and pursuant to order dated 4.2.2022, 1 to 3 original applicants before the NCLT who has initiated the proceedings under Section 7, filed an application for withdrawal of the proceedings. However, there is no provision in the Code or the CIRP Rules in relation to permissibility of withdrawal post admission of a CIRP application. In the present case, although the COC was constituted on 23.11.2020, there has been a stay of CIRP proceedings on 3.12.2020 (within ten days) and no proceedings have taken place before the COC. It is to be noted that the COC comprises 91 members, of which 70% are the members of the Flat Buyers Association who are willing for the CIRP proceedings being set aside, subject to the appellant and the Corporate Debtor – company honouring its undertaking given to this Court as per the settlement plan dated 3.2.2022.  Therefore, in the peculiar facts and circumstances of the case, where out of 128 home buyers, 82 home buyers will get the possession within a period of one year, as undertaken by the appellant and respondent No.4 – Corporate Debtor, coupled with the fact that original applicants have also settled the dispute with the appellant, we are of the opinion that this is a fit case to exercise the powers under Article 142 of the Constitution of India read with Rule 11 of the NCLT rules, 2016 and to permit the original applicants to withdraw the CIRP proceedings.

The Jasmine Buildmart Pvt. Ltd. were directed to file separate undertakings before this Court, within a period of one week, specifically stating and undertaking that:

  1. They shall complete the entire project within one year from 01.03.2022 and offer the possession to the respective home buyers.
  2. They shall complete the entire project including all the apartments, common areas, amenities, etc.
  • All demands be raised and timely paid.
  1. Company shall continue the provisions of all maintenance services.
  2. Company will make the application for obtaining Occupancy Certificate within six months, before the competent authority.

Tax Planning: How to Save Income Tax

Tax Planning: How to Save Income Tax

Tax Planning: How to Save Income Tax

People are always on the lookout for opportunities to save income tax. However, not all are aware of all the ways by which we can save tax through investment in different schemes.

There are two types of taxes to be paid in India – direct tax and indirect tax. There is no way to avoid indirect tax, but direct tax can definitely be reduced. In this article, we will discuss different ways by which you can reduce your direct tax.

Subas Tiwari

Reducing tax requires special planning. The first thing to do is to complete your tax planning as soon as possible based on your financial goals. There are 17 different ways through which you can reduce your tax liability which includes PPF, NSC and life insurance premium, etc.

Unit Linked Insurance Plan (ULIP)

ULIP Life Insurance Plan is one of the most important investment plans in India. It ensures that one’s family is financially balanced in the case of an event of death. By purchasing a life insurance policy, the taxpayer can avail of the benefit under the income tax act.

Under section 80C of the Income Tax Act 1961, the premium paid towards the purchase of a life insurance policy qualifies for deduction up to Rs. 1.5 lakh. Furthermore, as per section 10(10D), income on the maturity of the policy is tax free. The income is tax-free if the premium is not more than 10% of the sum assured. In the case wherein the money goes to the nominees of the person insured, the same remains as a tax exemption in the hands of the nominee.

In terms of the deduction under section 80C 1961, the taxpayer can claim 20% of tax deduction on the premium paid. The following conditions also apply:

  • The taxpayer purchases a life insurance policy on or before 31st March 2012
  • The policy is in his own name or in the name of their spouse or child

If the life insurance policy is purchased after 1st April 2012, then the premium paid is eligible for tax deduction up to 10% of the sum assured.

Equity Linked Savings Schemes (ELSS)

Equity Linked Savings Schemes are mutual fund investment schemes that invest a large percentage of their portfolio in equity. Furthermore, the fund has a mandatory lock-in period of 3 years which is the shortest amongst all the investment products.

Investment in ELSS funds qualifies for deduction under section 80C of the income tax act up to a maximum of Rs. 1.5 lakh. Both lump sum investment and the amount invested through a systematic investment plan (SIP) qualifies for the deduction. Since ELSS funds invest a large amount in equity, there is always some inherent risk.

ELSS funds provide the dual benefit of capital appreciation and tax-savings. This makes it one of the most popular tax saving schemes amongst investors.

 Public Provident Fund (PPF)

The Public Provident Fund has always been a popular tax saving schemes amongst the taxpayer. One of the major reasons for this popularity is the fact that PPF falls under the category of exempt–exempt–exempt tax status. You can open your PPF accounts with a bank or post office.

Taxpayers can claim a deduction under section 80C of the income tax act for the amount invested by them during the financial year. The maximum amount eligible for deduction is Rs. 1.5 lakhs. Since PPF falls under the exempt category, the interest and maturity amount are exempted from tax.

PPF account comes with a lock-in period of 15 years and it allows the investors the below options at the end of the maturity period:

  • Withdrawal of proceeds from the account
  • Continue for another 5 years

Sukanya Samridhi Yojana (SSY)

Sukanya Samriddhi Yojana has become one of the most important tax saving schemes. It was launched in 2015 by the government of India as a part of the Beti Bachao Beti Padhao campaign. It had a major impact on the general public. The scheme allows a fixed income investment through which the taxpayer can invest regular deposits and at the same time earn interest on it. Investing in Sukanya Samriddhi Yojana also qualifies as an eligible deduction under section 80C of the income tax act.

The government of India determines the rate of interest on the scheme on a quarterly basis and is payable on maturity. The scheme comes with a lock-in period of 21 years and will mature after the expiry of 21 years. A minimum deposit of Rs. 250 is required to be made per year for 15 years. Failure to pay the minimum amount in a year will lead to disconnection of the account. To re-activate the account, you need to pay a penalty of Rs. 50 along with the original Rs. 250 deposit.

In order to open a Sukanya Samriddhi account, below is the eligibility criteria for this tax saving option:

  • Only girl children can claim the benefits of this scheme.
  • The girl child cannot be more than 10 years of age. A grace period of one year is provided which allows the parent to invest within 1 year of the girl child being 10 years of age.
  • The investor must submit age proof of the daughter.

National Savings Certificate (NSC)

A government of India initiative, a national savings certificate is a fixed income investment scheme that aims at the small and middle-income investors to invest and earn handsome returns. It is considered a low-risk investment and as secure as the Provident Fund. The investors can invest as per their income profile and investment habits.

Investment in NSC qualifies for deduction under section 80C of the income tax act up to Rs. 1.50 lakh. Apart from providing the benefit of tax exemption, it provides the investor with complete capital protection and guaranteed interest.

Tax-Savings Fixed Deposit (FD)

Fixed deposits are considered one of the safest tax savings schemes. It’s safer than equity investments in terms of risk and returns. The banks decide the interest rates and it depends on several factors. Below are some of the features of a tax-saving fixed deposit:

  • Investment in tax saver fixed deposit eligible for deduction under section 80C while calculating the taxable income.
  • A minimum lock-in period of 5 years.
  • Senior citizens can get a higher interest rate on investment.
  • In the case of a joint account, the primary holder can avail the benefit of tax deduction while calculating the taxable income.
  • Tax saver fixed deposits do not allow any premature withdrawal. However, after the expiry of the 5 year lock-in period, investors get access to premature withdrawal. The terms and conditions for premature withdrawal vary from bank to bank.

Senior Citizen Savings Scheme

A Senior Citizen Savings Scheme is an income tax saving schemes available to senior citizens who are residents in India. The scheme is available for investment through banks and post offices and offers one of the highest rates amongst the various savings schemes.

Depositors can make an investment with a minimum amount of Rs. 1000 and in multiples thereof. The scheme also provides the facility of investment through cash provided the investment amount is less than Rs. 1 lakh. The deposits made into the scheme matures after a period of 5 years. The depositors also have the option to further extend the maturity period by another 3 years.

School Tuition Fees

The income tax act 1961 provides a deduction under section 80C of the income tax act for payment for school fees of children. This tax saving option is available under section 80C in addition to other investments like PPF, NSC, ELSS, etc. Tuition fees paid to any registered university, college, school, or educational institution qualifies for deduction up to Rs. 1.5 lakh.

The income tax act allows both the parents to claim the deduction to the extent of the amount paid by them. So if the total fee paid by the parents is Rs 1 lakh, of which the father has paid Rs 40,000, while the mother has paid Rs 60,000, both can claim the amount individually as per the payment made by them.

National Pension Scheme (NPS)

NPS or National Pension Scheme has become a popular income tax saving investment product. It is a tax saving option that is available to both government and private employees. It enables the depositor to build a corpus for their retirement along with a regular monthly income. The amount invested by the depositor is invested in several schemes including the equity markets.

There are two types of NPS accounts, Tier-1 & Tier-2. A Tier-1 account has a lock-in period until the subscriber reaches the age of 60 years. The contributions made by the subscriber to Tier-1 are tax-deductible under section 80CCD (1) and 80CCD (1B). Tier-2 accounts are voluntary in nature which allows the subscriber to withdraw the money when they like. However, contributions under tier-2 accounts are not eligible for a tax deduction.

As per the provision of section 80CCD, an individual can claim a deduction up to Rs. 1.5 lakh by investing in NPS. Additionally, a new sub-section 1B was also introduced, which offered an additional deduction of up to Rs. 50,000/-for contributions made by individual taxpayers towards the NPS.

Health Insurance Premium under Section 80D

You can claim a tax benefit of up to Rs. 25,000 in respect of the below contributions:

  • Premium paid to keep in force health insurance covering self, spouse, or dependent children.
  • Any contribution to Central Health Government Schemes.
  • Any other scheme may be notified by the central government as eligible for deduction.

In order to take care of one’s medical emergencies, medical insurance is considered as the safest investment option. This allows the taxpayer to avail of the benefits on two fronts. Firstly, being taken care of by the insurance policy in the case of a medical emergency. Secondly, the tax benefit under the income tax act for investing in an investment product.

Apart from the above, an additional deduction for the insurance of the parents is available to the extent of Rs. 25,000 if they are less than 60 years of age or Rs. 50,000 if they are more than 60 years of age. If the individual and the parent are both above 60 years of age, the maximum deduction available under this section will be Rs. 1, 00,000.

Education Loan

The Income Tax Act provides a tax benefit on repayment of the loan as a tax deduction under section 80E of the act. You must remember that this tax saving option is available to the person who is repaying the loan. Once an educational loan is availed, the interest paid on the education loan qualifies for a tax deduction for a maximum of 8 years, or the interest is repaid, whichever is earlier.

Depending on who pays the EMI for the education loan, the parent or the child can claim the deduction. The deduction under section 80C is available only if you take the loan from a financial institution and not family members. You can claim the tax deduction starting from the year in which the repayment starts.

The income tax authorities provide a moratorium period of up to one year to the borrower from the date of completion to start repaying the loan. This allows the taxpayer sufficient time to manage their finances and claim the deduction once they start repaying the loan.

Rent Paid and No HRA Received

Generally, you receive HRA as a part of your salary and treat HRA as a major tax saving schemes while filing income tax returns. However, there can also be a case wherein it does not form part of the salary of the employee. In such a case, standard HRA deduction cannot be claimed and the taxpayer would not be able to claim the benefit even if they are paying the rent. Further, in such cases, a taxpayer must claim a tax benefit under section 80GG.

In order to provide the taxpayer with benefit even in a case where HRA is not received, section 80GG was introduced. As per this section, a taxpayer can claim the deduction of rent paid even in a case wherein they do not receive HRA. This is subject to the below conditions:

  • The individual is self-employed or salaried.
  • HRA has not been received at any time during the year for which deduction is being claimed under section 80GG.
  • You, your spouse, or the HUF in which you are a member does not hold any residential accommodation at a place where you currently reside.

Interest Paid on Home Loan

In order to claim the interest component on a housing loan as a tax deduction, you must satisfy the following conditions:

  • A home loan must be taken for the purchase or construction of a house.
  • Construction of the house must be completed within 5 years from the end of the financial year in which the loan was taken.
  • The interest component paid as a part of the loan can be claimed as a deduction under section 24 up to Rs. 2 lakh. This is applicable in the case of a self-occupied property. In the case of a let-out property, there is no upper limit for claiming interest.
  • In the case of interest being paid towards a home loan taken during a pre-construction period, the pre-construction interest paid can be claimed as a deduction. The deduction is available in five equal installments starting from the year in which the property is acquired or construction is completed. However, the maximum limit is Rs. 2 lakh.

Savings Bank Account Interest

The Income Tax Act 1961 provides deductions with respect to interest earned from savings bank accounts. Individuals and Hindu undivided family can claim the tax deduction under section 80TTA on the interest earned. This deduction is applicable to taxpayers other than those who are senior citizens. In the case of senior citizens, section 80TTB is applicable.

The maximum deduction under section 80TTA is Rs. 10,000. The limit of Rs. 10,000 applies to the total interest earned from the savings bank account that the assesse has. Any interest over and above Rs. 10,000 is taxable under “Income from Other Sources”.

Medical Expenses Towards Disabled Dependent

As per the provisions of section 80DD, a taxpayer can claim a deduction if they are looking after disabled dependents. This tax benefit will help in reducing the tax liability of the person who is taking care of someone disabled in the family who is dependent on them.

It can be claimed by caretakers who are individuals as well as by Hindu Undivided Families (HUF).

Medical expenses against which you can claim tax benefits are as follows:

  • Any expenditure made towards medical treatment, nursing, training, rehabilitation of a dependent person with a disability.
  • Any amount paid as a premium for a specific insurance policy designed for such cases as long as the policy satisfies the conditions mentioned in the law.

 Treatment of Specified Diseases u/s 80DDB

A deduction under section 80DDB is allowed to a taxpayer wherein a case they have contracted diseases such as cancer, neurological diseases such as dementia, motor neuron disease, Parkinson’s disease, AIDS, etc. All such disease entails expensive treatment costs and the expenses done can be claimed as a deduction under section 80DDB.

The deduction under section 80DDB is allowed for the medical treatment of a dependent who is suffering from a specified disease by individuals or HUF. The deduction is up to ₹ 40,000 or the amount actually paid (whichever is lower). This limit goes to ₹ 1 lakh in the case of senior citizen taxpayers or dependents.

Donations Made to Charitable Institutions

Section 80G provides a tax deduction to the taxpayer with respect to the amount paid by them to an approved charitable organization. The donations made to such organizations should be made via cheque or online transfer. Cash transfers, above Rs. 2,000 do not qualify for deduction under this section. It is very important to take the stamped receipt from the organization wherein the donation has been made in order to claim the deduction.

Depending on the type of organization where a donation has been made, the tax deduction under section 80G can be either 50% or 100% of the donation amount. However, the same is restricted to 10% of the adjusted gross total income of the taxpayer.

There are basically four buckets in which donations can be categorized to claim the tax deduction.

  • Donations with 100% deduction without any qualifying limit, such as the National Defence Fund set up by the Central Government.
  • Donations with a 50% deduction without any qualifying limit such as the Jawaharlal Nehru Memorial Fund or the Prime Minister’s Drought Relief Fund
  • Donations with 100% deduction subject to 10% of adjusted gross total income. The donation must be towards a Government or any approved local authority, institution, or association to be utilized for the purpose of promoting family planning
  • Donations with 50% deduction subject to 10% of adjusted gross total income such as any institution which satisfies conditions mentioned in Section 80G(5).

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