Why You Should Look Beyond Employer-Provided Health Insurance?

Almost 80% of Indians are not covered by any health insurance scheme, reveals the most recent report from the National Sample Survey (NSS). The glaring number is testimony to the fact that health is the most neglected aspect in both rural and urban India. 

Lack of awareness can explain the reason behind negligible uptake for health insurance schemes in rural India, it is the dependency on employer-provided health insurance as well as high premium that can be blamed for insurance gap among urban population. It is still common to see that salaried employees are keen on buying health insurance for their parents without spending a moment on analysing their own medical needs. Thus, employer-provided health covers are the only way out for many in case any critical illness descend upon them. 

In view of alarming statistics, it is imperative to uncover harsh realities confronting every employee, who is dependent on employer-provided health insurance, which are listed below. 

1. Cover that may last immediately - Employer-provided health cover remains in force only until an individual continues to remain employed with a firm. Health cover comes to an end, once an individual decides to resign or leave job. This means that employee is not covered for medical eventualities at the time of his/her transition from one job to another. Things can turn worse if employment ceased due to termination by employer and securing another job can take longer-than-expected time. These are the times when having separate personal health plan does wonders. 
2. Inadequate of coverage sum - Employer-sponsored health plans are not customised as per an individual’s medical needs, but are merely group insurance. It is possible that such covers fall short of an employee or his/her family’s actual requirement. This leaves an employee and his family exposed to possibilities of higher money outflows, in case medical costs outrun employer-provided allocations. 
3. Specific coverage might not continue - Most of the employer-provided health covers include specific coverages such as maternity or senior citizen cover. Thus, during job loss or change, these special coverages will also cease, requiring an employee to bear future expenditures. 
4. Time is money - In case an employee parts with employment to start own venture or business, then the need of an independent health cover in place for self and family is inevitable. However, such procrastinated buying will translate into higher spending towards premium costs than what it would have been earlier. Moreover, an individual has to take onus of paying for medical emergencies for pre-existing diseases during waiting period. 
5. Exorbitant retirement - Decision to buy independent health cover when nearing retirement could be the most flawed decision one can make. Retirement age is the time when most of the health issues emerge, which is why one has to pay a hefty price to seek an optimal health cover. 

These reasons explain why one should look beyond employer-provided health covers to buy an independent cover immediately. Usually, family floater policies are appropriate for families with children that witness lower medical emergencies. However, separate health covers are recommended for families that have a history of frequent hospitalisations or medical care. 

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. Reenika Avasthi is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

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Five Pointers To Check Before Investing In Land

Among plethora of investment avenues, land is the most sought after investment in India because it has the potential to multiply capital at a far greater speed than anything else. Unlike flats that are governed by set residential rates, land has a broader scope to fetch higher returns, which is relative to the development of area around. 

However, investing into land is not as simple as it sounds. There are several legal and other factors  involved that need to be considered before taking any decision. Here is a brief summary of important points that should help you filter most appropriate land for investment. 

1. Clearance from local authority - While many buyers are aware of the difference between agricultural land and non-agricultural land, most of them fail to validate the availability of clearance from local authorities. It is prudent to stay away from land deals, which lack transparency in terms of clearances. 
2. Not within scope of government plan - Before taking negotiations any further, it is imperative to verify that the land in question does not interfere with any development plan by the government. Land under Eminent Domain can leave an investor’s money stuck in the project, forfeiting his/her right to even sell it again. Investors should be extra cautious about cheap lands being offered in interior or rural areas that are meant for public use. 
3. Clear title and demarcation - One needs to ensure that a land has clear title and its demarcation is in accordance with map. Moreover, knowing the history of land in question is also advisable. One can either hire a firm specialised in such verification or accomplish it at an individual level. Record of past transactions and title can be retrieved from Sub-registrar while stamped and signed copy of demarcation map should be requested from the government office. 
4. Basic utilities - Just because you are buying land for investment purpose does not mean that basic utilities can be overlooked. One has to evaluate a property based on the amenities, both present and in future. Land sans septic tank or drainage system will be unappealing and will find hard to get buyers. Besides this, availability of ground water is nowadays key for potential buyers and is important even from an investor’s perspective. 
5. Free from encumbrance - Before closing the deal, check for records to ensure that the land is free from encumbrance by any person or authority. When in doubt, it is advisable to publish a public notice in a newspaper or reach to a lawyer. 

While entering into a land deal for investment purpose is a lengthy process, investors can look forward to launch of Real Estate Investment Trusts (REITs), which has finally received  nod from the Securities and Exchange Board of India (SEBI). Although there are no listed REITs at the moment, but few of them are already in the offing. These REITs are structured similar to mutual funds and will enable even small investors to participate in India’s booming real estate. 

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. Reenika Avasthi is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

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Sequential Order In Which Loans Should Be Repaid

Got extra cash and wondering which loan to repay first?

For most of the loan borrowers, repaying loans with higher interest rate appears to be obvious route. However, this task should not be put into action without incorporating a strategy to cut loose of unproductive debts first so as to make the most of the monthly EMIs.

Here is an ideal sequential order, in which loans should be repaid.

1) Personal Loan - Undoubtedly, personal loans being unsecured carry higher interest rate while they also attract higher pre-payment charges. Still, this loan should take priority over others to save big on interest outgo.

2) Loan against other assets - After personal loans, one should preferably free up assets that are mortgaged for loans such as loan against property, gold, insurance policies, etc. Rationale behind repaying these loans is the fact that they do not carry any tax benefit and also reflect a charge on productive assets. Loans with higher interest rates such as loan against property and gold loans should precede in priority over loans carrying lower interest rates such as PF, insurance policies, fixed deposits, etc.

3) Car Loan -  Loan on car or vehicle comes next in order as it does not entail any tax soap for an individual unless it is used for business purpose or owned by a self-employed individual. Moreover, car is a depreciating asset, therefore, continuing car EMIs till the end of its tenure is not recommended.

4) Education loan - Although interest on education loans is higher compared to car loan, yet tax benefit under Section 80E offsets the difference between the two loans. An individual can claim deduction for interest paid on education loan for a period of up to 8 years or the actual term of interest payment, whichever is earlier. Also, there is no ceiling on the amount that can be claimed for interest deduction in a year. Therefore, it is ideal to retain this debt over others.

5) Home Loan - Being one of the most common forms of debt that Indians hold, home loan fetches tax advantages in terms of both interest and principal payment under Section 24 and 80C. Also, added tax soaps for first-time buyers under Section 80EE further enhances the value of this loan. Because of these tax incentives, home loan should be paid only at last after other loans are settled. Apart from this, limitless deduction allowed on interest payment for second home enlists this loan into good debt. Ideally, repayment of home loan should be completed during the initial years of loan tenure, when interest component is higher than principal outgo.


While the above order reflects best possible way in which loans should be repaid, it could differ from one individual to other, based on interest rate and other factors. It is suggested that one should evaluate all aspects of existing loan to make a sound judgment.

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. Reenika Avasthi is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

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Five Ways To E-Verify Your Income Tax Returns Within Minutes

Through with Income Tax filing and planning to send ITR-V to CPC, Bangalore?  Save yourself from this obligation as Income Tax Department has launched e-verification to do away with paperwork. Below are various methods described to successfully e-verify your returns. 

1) Electronic Verification Code (EVC) - EVC is a ten-digit code, which is generated before filing returns and is received on mobile number and email id of the taxpayer. After an individual uploads Income Tax Return on e-portal, he will get two options for EVC, i.e., 

First Option -  ”I already have an EVC to e-verify my return." 

Second Option - “I do not have an EVC, and I would like to generate EVC to e-verify my return." 

Under the first option, EVC received on mobile number and email ID should be entered and to successfully e-verify your returns. Second option is only available to taxpayers, whose income is below five lakhs and have not filed for a refund. Taxpayers with income above five lakhs will have to e-verify using other modes. 

2) Aadhaar OTP - E-verification through Aadhaar is possible only when mobile number is linked with Aadhaar, and both Pan and Aadhaar of a taxpayer is linked to the income tax site. Linking Aadhaar with e-filing portal is easy as taxpayer has to input Aadhaar number in the pop-up window while logging into account. After submission, OTP is sent to Aadhaar linked mobile number. It is to be noted that Aadhar OTP is valid only for 10 minutes. Hence it needs to be submitted within the given timeframe to e-verify returns. 

3) Netbanking - to e-verify through net banking, a taxpayer has to first log into his/her own online bank account and click on the “income tax e-filing” section. This will redirect the taxpayer to income tax website, where e-verification can be done by simply submitting request against the returns pending for e-verification for a given Assessment Year.   

4) Using Bank Account number - Taxpayers can e-verify by validating their bank account number on e-filling portal. Bank account details including Indian Financial System Code (IFSC) and other required details needs to be submitted, after which EVC is sent to email ID and mobile number. E-verification can be done using the code, and taxpayer should retain the system-generated message, which states that returns are e-verified. 

5) Using Demand Account number - Similar to bank validation, a taxpayer has to submit Demat a/c details in order to e-verify returns using this mode. By submitting information against depository type, DP ID, Client ID, and other relevant fields, taxpayers can generate EVC, which will be sent to the registered mobile number. 

Taxpayers can physically verify tax returns by sending ITR-V to Bangalore if none of the above options works. 

Physical ITR-V should be signed and sent through Post to -  Income Tax Department - CPC, Post Box No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka, India. 

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. Reenika Avasthi is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

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Make A Choice Between Saving And Investing

Saving and investing are used interchangeably, but in reality, the two have distinctive roles to play when it comes to financial planning. Though both of these functions contribute to the future corpus, realizing the difference between the two is crucial to reap the benefits of a well-planned financial strategy.

Most of the times, people try to focus more on savings and fail to channel it into appropriate investment vehicles without realizing that it is only half job done. This calls for a need to demarcate the features and functions between the two so that savers can become investors and are aware of the fact that risking now is far better than putting everything on stake later. 

1. Risk - Risk is the key factor that draws a line between savings and investments. Any investment vehicle that guarantees the return of principal amount is categorized as a savings instrument. Bank deposits, fixed deposits, NSC or corporate deposits fall under this head whereas those avenues that aim to seek profits but also entail risk of losing principal amount are investment vehicles. Mutual fund investments, stocks, real-estate, forex are examples of investments.
2. Tenure of need - Savings works best when the need is short-term while it loses appeal over longer horizon. For instance, it is appropriate to park emergency funds into saving account or fixed deposit, but it would be unwise to leave retirement funds to sit into the same account. It will not be an exaggeration to state that retirement funds in a fixed deposit, or PF is another way to ensure that your retirement dream never comes true. 
3. Return - Investments, if done right, can fetch extraordinary returns versus savings by making your money work hard. For example, a fixed deposit could have returned an average of 9% to 10% returns while same amount, when invested in a stock, can deliver double returns. Savings seek interest but investments aim for profits and thus, higher return. 
4. Accessibility - Ease of access separates out investments from savings. Easier the access to funds, the higher likelihood that your money is working as mere savings and not investments. 
5. Inflation - Most  important factor to consider is how your money is encountering inflation effectively. Biggest drawback of savings is that interest earned is balanced out against inflation. So cash stacked at your home, money parked in bank deposits are not really working to benefit you but simply losing value with each passing day. On the other hand, investments strive to maximize wealth and aim to negate and grow beyond impact of inflation. 

What to Do Next?

Once these differences are clear, it’s time to pull out the statements and analyze if your money is really working or losing value. Do not fret if you discover that your savings urges did not evoke similar investment impulses as you can still make a difference by undoing the wrong.

If work is demanding and you find it difficult to set the ball rolling then reach out to a Financial Planner to help figure out things for you to help you become an informed investor from an assured saver.

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. Reenika Avasthi is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

Image Source: tfl.guide.com

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Seven Things To Help Tax Return Filing For Salaried Individuals

Last date to file tax returns is four weeks away, and it’s time to get into action and escape the urge to wait for the last moment. Here are few things that will help to refresh tax return do’s for the Assessment Year (AY) 2016-2017. 

1. e-Filing or not - Tax returns have to be filed online if salary or total income exceeds Rs 5 lakh. Total income implies salary income along with income from other sources and interest from bank account surpassing Rs 10,000 a year. However, if this income is below Rs 5 lakh, as well as interest from bank account, is less than Rs. 10,000 then e-filing is not mandatory. 
2. Be thorough with Form 16 - For salaried individuals, Form 16 is the key document that matters. Salary details are required to be entered manually on government site while some of the online tax filing platforms automatically upload Form 16 details to do away with manual entry. However, it is advisable to match the numbers before proceeding ahead. Individuals who have switched job during the year need to be extra careful as they will have to enter details of Form 16 from both previous and current employer. 
3. Revisit deductions - Although Form 16 accounts deductions correctly most of the times, individuals should re-check if all the deductions are in place. Change of jobs within a year or failing to submit investment proofs in time would require employees to input the data manually. 
4. Tax Deducted at Source (TDS) - Ensure to enter and reconfirm the TDS already deducted as mentioned in Form 16 or TDS certificate. Form 26AS credit statement is the best way to reconcile TDS. Form 26AS can be sought by registering on the income tax website. Employer or corporate should be reached out if there is any difference between the TDS certificates/Form 16 and Form 26AS. 
5. Type of ITR Form - Most of the online tax filing portals direct tax filer to the right ITR form based on the occupation details provided, however, one has to choose the form manually on the government site. There is a thin line between ITR 1 and ITR2. For instance, a salaried individual owning more than one house property will have to file ITR2 instead of ITR1. The latter is meant for those who draw salary income, own only one house property and have exempt income below Rs 5,000 a year.
6. Enter income from other sources and capital gains - Never miss out on entering income from other sources such as income from subletting, interest on bank or fixed deposits, winnings from lotteries. For clarity, any income that cannot be categorized as income from salary, business, profession or assets, fits this income head. Moreover, income from second property and gains from mutual funds should be recorded under capital gains. 
7. e-Verify - Save yourself from the hassles of sending ITR-V acknowledgment by physical mail when you can e-verify online. Government has enabled e-verification through Aadhaar or net banking to simplify post-filing processes. 

Follow us more to know about the e-verification process in detail. Until then, move ahead with filing your returns. 

Why You Should Stop Treating Insurance As Investment?

“Both terrorism and insurance sell fear -- and business is business” ― Liam McCurry, Author, Terminal Policy

This quote is self-explanatory to highlight the very basis of buying life insurance. But, what can be more ironical than the fact that life insurance is now days pitched as an investment, targeting the deep-rooted fear, which is “what will you get after death?”  It is obvious that anything that does not provide any benefit over your money is undesirable, and our return-prone tendencies veer towards those options that have something to offer to our family members or beneficiaries.

Know the facts
I recently came across an inquisitive client, who was bogged down by the idea that ‘Term Insurance’ is the most expensive insurance on earth. When explained that term insurance is the cheapest form of insurance to manage life risks for a pre-specified tenure, he enquired, what if he will die after the insurance tenure is over as he will not get his money back? However, there is nothing unusual in this question as most of the innocent clients are brainwashed by insurance agents in a similar way.

Answer is simple - Term Insurance is a cost to take care of one’s liabilities through their earning tenure. As far as ‘Benefits’ are concerned, there are other cost-effective alternative solutions such as mutual funds to meet return objectives. Life insurance buyers should not be influenced by only benefits, but should also consider other factors beyond it.

For example, premium for Rs 50 Lakh basic 25-year term plan cover for a 30-year-old non-smoking individual range from Rs 5,000 to Rs 12,000 annually. On the contrary, money back plan for similar cover will start from Rs 3,50,000 onwards for a policy term of 20 years. Similarly, annual premium for endowment plan for 20-year policy term starts from Rs 2,66,577 onwards.

Is the purpose solved?
Such a widening gap in premium between term insurance and conventional plans should be an eye-opener in itself. Second factor that is critical to examine is that steep premiums on traditional insurance policies often drive individuals to buy a lesser cover, which can lead to underinsurance or insufficient insurance. Under such instances, buying insurance does not fulfil its basic role, which is to cover fully against adverse events, i.e., risk management.

A 5 lakh or 10 lakh of insurance cover cannot repay an outstanding home loan of Rs 25 lakh if any unfortunate event occurs. Even this amount is insufficient to meet the living costs of beneficiaries for a reasonable amount of time till they find other income streams on their own. Now imagine how things will be if there was a term plan of Rs 50 lakh to 75 lakh in place.

Then came ULIPs
Just when investors were warming up to the idea of keeping investments separate from insurance, ULIPs (unit-linked insurance plans) made an entry, emerging as one answer to investment and insurance needs. Unfortunately, ULIPs route funds to investment vehicles only after applying list full of charges such as commission and mortality charges. Moreover, insurance companies are not transparent about revealing the actual sum that go towards life insurance and investment while shifting between investment options is quite inflexible too. Hence, it is very much likely that ULIPs can leave one both underinsured and underinvested at the same time.

Final word
Rather than depending on non-transparent means of investments, it is ideal that individuals should buy an appropriate term cover and invest the excess surplus in alternative investment vehicles that can deliver higher returns over a longer-term. This way investors will have better control on their investments and term plan will cover liabilities.
To reiterate, the role of term plan ends once an individual attains 60-65 years of age when liabilities such as home loan, education loan of children or any other debt usually stands repaid. Meanwhile, investments other than insurance become a source of fulfilling life goals such as retirement, vacations or children marriage. For those who are still seeing insurance as investment, it is high time to draw a line between the two.

About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. Reenika Avasthi is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.

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