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Old 7th February 2011, 18:36   #136
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Default re: Income Tax savings, Investments and Insurance

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Apart from exemption on 1 lakh, medical insurance is eligible for deduction upto a total of 15K(for covering family and parents) and 20 K if the parents are sr. citizens. However I don't understand what do you mean by "investing" in health cover? Being an insurance it is an expense. Don't end up buying some bundled product and falling for the "investment cum insurance" trap.
Apart from the 15K/annum for medical for self that is allowed a full tax rebate, I usually opt for parent to be included wherein the premium charged is Rs.11,500 per annum which is also considered for full tax rebate.
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Old 7th February 2011, 19:09   #137
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Apart from the 15K/annum for medical for self that is allowed a full tax rebate, I usually opt for parent to be included wherein the premium charged is Rs.11,500 per annum which is also considered for full tax rebate.
I stand corrected. Thanks Avinash.

Mediclaim policy for self & family premium paid is deductible up to Rs 15000 in a year under Section 80D

If you are paying premium for your dependent parents - extra deduction of Rs 15000 or Rs 20,000 ( if 1 of them is a senior citizen)

All this is over and above the Rs. 1 Lakh deduction.
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Old 9th February 2011, 07:53   #138
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However I don't understand what do you mean by "investing" in health cover? Being an insurance it is an expense. Don't end up buying some bundled product and falling for the "investment cum insurance" trap.
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Apart from the 15K/annum for medical for self that is allowed a full tax rebate, I usually opt for parent to be included wherein the premium charged is Rs.11,500 per annum which is also considered for full tax rebate.
Thanks a lot for advice and caution. I will surely keep in mind.

Cheers
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Old 16th February 2011, 09:38   #139
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Question re: Income Tax savings, Investments and Insurance

Friends,

I need an advise from you. This is regarding investing in gold. I am aware that Gold ETF's are available for which you need a demat account but you need to do the buying every month. My wife till now had a monthly investment (BC as they call it in local lingo) with a reputed jeweller in Thane. The reward was pay for 11 installments, get the 12th installment free and 50% off on making charges if jewellery taken/done from that jeweller. Now that scheme is coming to an end, wife wants to continue albeit with an increased amount.

I would like to know whether it would be wise to allow wife to invest in such a scheme or stick to the ETF's. Also would there be an SIP for the Gold ETF's, I still havent come across any although as an alternative there are reports of Reliance coming out with a Gold MF where you can invest in SIP's. The disadvantage of the MF is, it again invests in the Reliance Gold ETF, hence double entry/exit loads.

Pls advise.
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Old 16th February 2011, 10:54   #140
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Friends,

I need an advise from you. This is regarding investing in gold. I am aware that Gold ETF's are available for which you need a demat account but you need to do the buying every month. My wife till now had a monthly investment (BC as they call it in local lingo) with a reputed jeweller in Thane. The reward was pay for 11 installments, get the 12th installment free and 50% off on making charges if jewellery taken/done from that jeweller. Now that scheme is coming to an end, wife wants to continue albeit with an increased amount.

I would like to know whether it would be wise to allow wife to invest in such a scheme or stick to the ETF's. Also would there be an SIP for the Gold ETF's, I still havent come across any although as an alternative there are reports of Reliance coming out with a Gold MF where you can invest in SIP's. The disadvantage of the MF is, it again invests in the Reliance Gold ETF, hence double entry/exit loads.

Pls advise.
Actually some economists feel gold is not that great an investing option. Nonetheless it should be part of ones investment portfolio as gold acts as a wonderful hedging bet in the extreme case when the currency becomes insolvent! What that means is by some extreme misfortune, if tomorrow the value of rupee becomes close to zero (very high inflation, remote possibility but not zero probability) then still it will only be gold which will still hold its value (whatever is prevailing in the international market). Therefore one should always buy the actual metal and not some papers! Those ETFs might not have any meaning in such a scenario!

If you really want to invest in gold, buy solid bars and then keep them some place safe! Now thats an altogether another problem how to keep it safe!
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Old 16th February 2011, 10:55   #141
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Default re: Income Tax savings, Investments and Insurance

Ghodlur,
You can check out Benchmark and Kotak Gold ETFs. You can also run an SIP in those. The only difference that I know of is that, unlike a mutual fund SIP, your monthly amount is not fixed. You will need to buy gold ETFs in multiples of 1 gm and the prevailing rate on that day applies. so there could be variations month to month.
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Old 16th February 2011, 11:07   #142
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What that means is by some extreme misfortune, if tomorrow the value of rupee becomes close to zero (very high inflation, remote possibility but not zero probability) then still it will only be gold which will still hold its value (whatever is prevailing in the international market). Therefore one should always buy the actual metal and not some papers! Those ETFs might not have any meaning in such a scenario!
Why won't ETF's have a value in such a scenario?
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Old 16th February 2011, 11:30   #143
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Question re: Income Tax savings, Investments and Insurance

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Ghodlur,
You can check out Benchmark and Kotak Gold ETFs. You can also run an SIP in those. The only difference that I know of is that, unlike a mutual fund SIP, your monthly amount is not fixed. You will need to buy gold ETFs in multiples of 1 gm and the prevailing rate on that day applies. so there could be variations month to month.
I have checked the ETF's referred by you and also other Gold ETF's but none have an SIP facility. The option can be provided by the trading account provided alternatively for which you would need to deposit money in the trading account for the SIP to take place. The onus of keeping the track of SIP totally lies with the oneself.

Thats the reason to my original query. Should I allow my wife to invest the amount with the Jeweller or start accumulating ETF units. In the former I would have an advantage of saving some cost on physical jewellery making charges which in latter I would have to pay in full when I redeem.
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Old 16th February 2011, 14:42   #144
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Hi everyone.

I have 5k for savings from next month. please let me know how do i invest for a safe future.

Do i need to split this into SIP and PO schemes ? is yes then which SIP is good for returns.
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Old 16th February 2011, 14:51   #145
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Hi everyone.

I have 5k for savings from next month. please let me know how do i invest for a safe future.

Do i need to split this into SIP and PO schemes ? is yes then which SIP is good for returns.
I would select 5 good mutual funds and invest 1K each per month in SIP, using the ECS option. Most SIPs allow to invest 1K a month; with minimum term being 6 months.
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Old 16th February 2011, 15:17   #146
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Why won't ETF's have a value in such a scenario?
For the simple reason that anything on paper will have just paper's value!!!

This kind of situation will happen if there is a big internal war or terrible instability or military takeover. Courts would typically become meaningless and there would be no question of rights. Think of countries like Zimbawbe etc. What would you do if the ETF issuing authority simply refuses to honor its liabilities!
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Old 16th February 2011, 18:38   #147
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For the simple reason that anything on paper will have just paper's value!!!

This kind of situation will happen if there is a big internal war or terrible instability or military takeover. Courts would typically become meaningless and there would be no question of rights. Think of countries like Zimbawbe etc. What would you do if the ETF issuing authority simply refuses to honor its liabilities!
In such a situation, a bank locker where you have hoarded your gold bars also may not allow you to take it out a locker. So only option is to keep the gold bars under your pillow.
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Old 16th February 2011, 19:03   #148
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In such a situation, a bank locker where you have hoarded your gold bars also may not allow you to take it out a locker. So only option is to keep the gold bars under your pillow.
Yes thats why I said the problem is how to keep it safe!

Banks liability is only till Rs. 1L! And in case of govt failure etc, there is no guarantee they will honor it!

How about opening acounts in swiss banks
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Old 21st February 2011, 10:21   #149
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One more solution to my earlier posted gold query. Reliance has come out with a Gold Savings Fund which is typicaly an open ended fund but will invest in Reliance Gold ETF. There is no need of demat account and SIP is possible in this new scheme. But the units given will be similar to the other MF units and not same as the GETF's.

So would this be a good choice to start saving for gold? Anyone gone through the fine print? If so please share.
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Old 21st February 2011, 12:16   #150
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Yes thats why I said the problem is how to keep it safe!

Banks liability is only till Rs. 1L! And in case of govt failure etc, there is no guarantee they will honor it!

How about opening acounts in swiss banks
Does bank have any liability at all for lockers?

I know for deposits, there is a 1L by way of depositor's insurance, but don't know anything about bank's liability for lockers.

What if the Swiss Bank crashes?
Or if the country itself fails?
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