Insure yourself against Terror Attacks

Loss, more than anything else, opens our eyes to the need of insurance. It was the Mumbai attacks that shows the need of a terror attack insurance as well.All though almost all of us have insurance policies, but it is important that we check our policies once again for an insurance against terror attacks. Here is a look at some major insurance covers and what we should look at while taking the cover:Life InsuranceWhile most basic life...

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Reimbursement of Medical Expenses - R.N. Lakhotia

As a general principle, any perquisite in one form of a medical allowance is typically taxable. On the other hand, reimbursement by an employer of medical expenses incurred by an employee is generally tax-free. Read on below for the full picture Medical Expenses Allowance If a fixed allowance is received by an employee for the discharge of medical expenses, it is a taxable perquisite. Hence, an employee should avoid the receipt of an allowance...

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Leave Travel Allowance - Sixth Pay Commission

The sixth pay commission has recommended some modifications to the Leave Travel Allowance rules for the Government employees. These changes have been made effective from September 1, 2008. I've tried to put in most of the changes in this post. Highlights:Parents dependent on the Govt. employees are eligible for LTA irrespective of whether they are staying with Government employee or not. Fresh employees can avail 3 home town travel and...

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What is Sum Assured?

Almost everyone who has a Life Insurance, must have heard the term "Sum Assured". But, do we know the real meaning of the term? How does this affect ourselves? We will try to put some light on this in this post...The Sum Assured is actually the reason for which we buy Life Insurance. This amount affect the insured while living as well as after life. It is the amount that would be paid to the nominee in case of the death of the insured...

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Gold: The best defence against recession

As worries over a global recession deepen, investors should now shift to gold as a safe haven. History also supports this. In the great depression of 1929, Gold was the best performing asset. People had even dumped the currencies and converted to Gold with the fear of even central banks being fail. At that point in time, Gold was the standard on which each currency value was measured. Dollar was fully convertible to Gold and so were many...

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Don't Let your Insurance Policy Lapse

The markets are falling on their head. There is bad news all around. People are losing their jobs. Companies are shutting shops. So, what would one do to cover their finances? First thing that comes to mind is dip into your investments to get money. After all this was the day that you have been saving for...But then there are certain investments that one makes with a goal in mind. It would be better if one doesn't touch those. Your insurance policy can be one such investment. If you have a ULIP (the type that gives better returns...

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Global Meltdown: How safe is your Job?

The writing is clearly on the wall now. There is an obvious meltdown in the world financial markets. The impact is being seen on the jobs as well. The companies have started to downsize the staff (Jet Airways fiasco is the latest example). They actually have no other option. If a company has to survive, it has to downsize to cut costs. The easiest victim would be the employee who is an average performer and is not quite the blue eyed boy...

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Deposit Insurance and Credit Gaurantee Corporation

Off late there has been a lot of talk about some commercial banks going bust/bankrupt. And thus there was a rumor of depositors losing money that was kept in the bank.I was searching on the topic and came to know about this corporation (DICGC). DICGC works on the safety of all the depositor's money kept in savings a/c, FDs etc with the banks. Almost all the banks in India are a part of this corporation and thus the money should be safe enough.List of partner banksBrief History of DICGC:The concept of insuring deposits kept...

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History of Financial Crises

I found this nice article in The Hindu Business Line on the previous financial crises around the world. This is worth a look, so decided to post it here.Not learning from historyParvatha Vardhini C.As the world struggles in the throes of a credit crisis, it seems appropriate to recount some (un)forgettable meltdowns of the twentieth century, the economics behind them and the panic that they created. Each of these major crises had features that have parallels in the current one. Yet, history repeats itself. Could investors have...

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Fixed Diposits: The safe Havens for the risk averse investors

As the Equity markets were on full swing last year, the good old fixed deposits and the post office schemes were loosing their sheen. But now that the markets have tumbled on their head and investors are looking for cover, it's once again time to look at these safest forms of money saving instruments.Investors should go for bank deposits or Fixed Maturity Plans (FMP) of mutual funds which provide cushion and risk free returns during the uncertain times as now-a-days. These can be of paramount importance to senior citizens and...

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Interest Rates and stock markets

Interest is nothing but the cost you have to pay for the use of someone else's money. Credit users know this scenario quite well - they borrow money in order to buy something. When it comes to the stock market and the impact of interest rates, the term usually refers to something else. The interest rate that applies to investors is the RBI bank rate. This is the cost that banks are charged for borrowing money from the RBI. It is the way the RBI attempts to control inflation.What is Inflation?Inflation is caused by too much...

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What is an Insurance?

Insurance works on the concept of pooling of risk. In the ancient times, merchants started this concept by poling the risk of their cargoes being sunk in the sea. They started pooling money which would be used to compensate the damages occurred to the merchant whose cargo sunk.The same concept has been carried forward to the modern day insurance, where one can insure not only his cargo/vehicle but also his health and life!In India, insurance can be broadly classified into 2 categories:Life Insurance: Financially covers the...

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Things to keep in mind while investing

Your journey towards financial freedom isn't complete without obstacles which you must learn to face and conquer. The sooner you learn to take action against them, more money you make.Impulse BuyingAlways buy when you see value not the price movements. Price movements are often due to market momentum and not for the value the stock presents.InflationInflation hurts people particularly those in fixed incomes like the elderly and those whose income isn't indexed to inflation. They lose a part of their purchasing powers because...

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Balanced Mutual Funds: Good option when Markets are down

What is a Balanced Fund?Balanced funds a.k.a. hybrid funds are a type of funds which don't take full exposure either in equity or in debt. They invest in both equity and debt in a well defined ratio as per the fund's mandate. An investor with a low risk capacity and having dependents can use these funds to have stability in his/her portfolio.They are usually classified in two broad categories:Equity Oriented Hybrid Funds:These funds usually invest in the ratio 60:40(equity : debt) or 75:25 (equity : debt). Suitable for investors...

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LTA- Leave Travel Allowance

Leave Travel Allowance (LTA) is an allowance/benefit that your employer gives you to cover your travel expenses. This is a tax saving instrument as well. Your employer gives you money to go on vacation and the money is not taxable! So far so good… But there are stipulations/rules from the government as in any other benefit.Let’s get a look into LTA in this post…What do I do to claim LTA?Nothing more than getting a break from the work! Isn’t that great? · You should take a leave from work and travel to anywhere...

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Learn about your HRA

House Rent Allowance is a very important component of one’s salary. The tax implications of the house rent allowance (HRA) seem to baffle most people. Taking the case of two individuals, Akram and Rafiq, who work in the same company, I have tried to explain this allowance in detail.One significant difference between the two individuals, which is necessary for this study, is that Akram resides in his own house while Rafiq in a rental accommodation.Are both eligible for HRA?Yes. Because the payment of HRA by an employer does...

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Income Tax Rates for FY 2008-09 in India

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