The National Pension System (NPS) is a voluntary defined contribution plan for retirement income. Individuals aged between 18 and 60 years can open a Tier I and Tier II account. They need to contribute a minimum amount of INR 6,000 per annum to the Tier I NPS account.

The contribution is invested among different asset classes, such as government bonds, corporate bonds, and equities. Contributors can indicate their investment choice to maximize their returns on investments.

Although the NPS was launched in 2009, it did not gain much popularity initially. Individuals shied away from investing in the NPS because of its complexity and a general lack of clarity related to their contributions.

However, in the previous year’s Budget, Finance Minister Arun Jaitley took a huge step towards increasing the popularity of this tax saving investments plan. He made contributions of up to INR 50,000 tax deductible under the section 80 CCD (1B) of the Income Tax Act. This deduction was over and above the existing benefit available for investments up to INR 1.5 lakhs under the section 80 CCE. This offers individuals a total tax deduction benefit of INR 2 lakhs under sections 80 CCD (1) and 80 CCD (1B).

As a result, an increased number of investors started investing in the National Pension System. Assets under management for the NPS crossed INR 1 lakh crores for the first time since the launch of this tax saving scheme.

Working of the NPS

Individual subscribers

They can open their NPS accounts with any of the “Point of Presence (POP)” appointed by the regulatory authority, Pension Fund Regulatory and Development Authority (PFRDA). They need to fill and submit the Common Subscriber Registration Form (CRSF) to the POP along with KYC documents and initial contribution. On successfully opening an account, users receive a Welcome Kit comprising the Permanent Retirement Account Number (PRAN) card and other related documentation. The PRAN is unique for each subscriber and portable, giving you flexibility even if you change your job or location.

Tier I is the pension account while Tier II is the investment account. Withdrawals from Tier I accounts are limited and help to create the retirement corpus. Tier II is a voluntary investment facility and the amounts from this account can be withdrawn without any limitations.

Corporate subscribers

The corporate model for this tax saving scheme was made available from December 2011. It was customized to suit the requirements of different companies and employees. The NPS is an option offered for providing additional retirement benefits to the personnel, and can be made mandatory by the companies for their employees.

Companies can join this tax saving investments scheme through the POP. Employers who contribute to this pension plan on behalf of their employees also receive tax advantages, which make it attractive for them. Companies can claim such benefits for an amount that is up to 10% of the employees’ salaries (basic + dearness allowance) through deduction as business expenses.

Share to Explore !!

Facebook

Digg

Pinterest

Twitter

Reddit

Linkedin

StumbleUpon

Tumblr

Print

email

Yummly

Buffer

Everybody has heard the saying “health is wealth”. While it is true that good health is something that money cannot buy, access to funds can certainly give you the best medical care. Life is uncertain and despite all your safeguards, accidents and diseases can strike without warning. It is therefore prudent to make arrangements for the wellbeing of yourself and your family, well in advance.

Medical costs today are prohibitive, making the need for sudden treatment or hospitalization a huge financial burden. If you are not covered under a health plan, you may find yourself in a difficult situation and can end up depleting your savings.

Benefits of Health Insurance

• Financial stability – Medical costs are increasing at a rapid pace. In case of hospitalization, you will have to incur several expenses, such as doctors’ fees, diagnostic tests, medications, and lots more. If you have to pay for these, you may end up spending all your savings. When you have purchased the best health insurance coverage, all these expenses are paid for by the insurer.

• Avail the best medical care – Many people who are not covered under a health plan often compromise on the quality of care they receive. However, with adequate health insurance, you can focus on receiving the best medical care and recover earlier. Most insurers offer a wide network of hospitals, which gives you the additional benefit of cashless hospitalization.

• Tax benefits – In addition to the above-mentioned benefits, individuals can avail of tax benefits on the premium paid for purchasing the health insurance policy. Under section 80 D of the Income Tax Act, premium up to INR 25,000 per annum is tax deductible. An amount of INR 30,000, paid as premium for senior dependent parents covered under these health plans, is tax deductible under this section.

Tips to Avail the Best Plan

• Individuals must pay their monthly premiums on time to ensure the benefits under the health insurance plans remain valid throughout the policy term.

• If you receive any message asking for additional information and/or documentation, it is important that you submit the same quickly to avoid loss of coverage.

• It is also important to pay your renewal premium in a timely manner to continue enjoying the different benefits available under the insurance coverage.

If you follow these simple tips diligently, you can be sure to reap the benefits of your health insurance policy. Do not wait for a health crisis to learn more about health insurance.

Know more about health insurance tips at 5 Paisa Insurance

Share to Explore !!

Facebook

Digg

Pinterest

Twitter

Reddit

Linkedin

StumbleUpon

Tumblr

Print

email

Yummly

Buffer

In today’s fast-driven world, one faces uncertainty in life. Various financial tools like life insurance, endowments plans, medical insurance, etc. are made available to take care of this aspect. Besides, they are also an investment and helps to secure one’s financial future. Life insurance policies also aids in saving tax, improves credit ratings, inculcates saving habit, acts as retirement income and provides for your family in case of untimely death.

What is term insurance plans?

Term insurance is a basic and fundamental insurance product. It is a type of insurance policy that provides coverage for a specified ‘term’. In case of death of the policy holder during the policy term, death benefit will be paid by the insurance provider to the beneficiary. The premium for term policies is very low as compared to other insurance plans. This is because there is no investment component and the entire premium paid is directed towards covering risk.

What is endowment plan?

An endowment policy is a type of life insurance policy which apart from covering the life of the policyholder helps him to save regularly over a period of time so that a lump sum amount is received at the end of the maturity term. Thus, such plans fulfill the dual need for life cover as well as investment, under a single plan. The main benefits of such a plan is regular savings, financial protection of family in case of death, loans against the policy and tax benefits under section 80C and 10(10D) of the Income Tax act, 1961.

Which plan is best for you?

Based on financial goals

Both types of life insurance plans have their own pros and cons. An individual needs to make a choice between the two depending on his financial goals. Some may take a policy for the sole purpose of a life cover while some may take it with the goal of investing and growing their money.

Cost of premiums

Endowment plans have higher costs than term policies for the same coverage and duration. Customers are charged premium for both investment and life cover. Various charges like mortality charges are deducted and the balance amount is then invested in other instruments. Term plans, on the other hand, charge premium only for life protection and not for investment. Hence, term plans come at very low premium and give good returns to the family in case of death of the holder.

Rate of return

Amount received as premium in endowment plans are invested in debt as well as stock market after deducting insurance cost, mortality cost, etc. The rate of return depends on the performance of the stock market. Considering that the term of endowment policies is usually long-term (around 20 years), the return is low. You could reap a better return by investing in mutual funds, which give a higher rate of return as compared to these plans.

Regular income

Most endowment policies declare bonus once a year. The bonus received is a certain proportion of the sum assured. This acts as a regular income as compared to term plans where you do not receive any returns whatsoever. In case of term insurance the nominee receives the sum assured amount only if the policyholder passes away.

Conclusion

If the sole purpose is to buy a life cover, it is advisable to go in for a term plan. Though you may not receive any amount on maturity, the low premiums are quite affordable. In case of death of the policyholder, the amount given to the beneficiary is quite high. This amount can then be used by the dependents for purposes like marriage, house loans, paying debts, etc.

For those who already have a term planin place and are seeking investment gains, endowment plans are best suited for them. It provides an avenue for disciplined investment even though the returns are not very high. It is important to make the right choice between the two depending on your financial goals.

Know more about endowment plans and term insurance at 5 Paisa Insurance.

Share to Explore !!

Facebook

Digg

Pinterest

Twitter

Reddit

Linkedin

StumbleUpon

Tumblr

Print

email

Yummly

Buffer

So – you’ve had an excellent idea for business and thought it might be a success? Well, congratulations. It’s an amazing experience owning a startup and seeing something grow from an idea to an actual business. However, there are a lot of things that can go wrong – unless you have the right protection in place.

Most business owners understand the importance of security – but you have to start sooner rather than later. In fact, ask any legal expert and they are likely to tell you to sort out your protection before you even write your business plan. In this guide, we’re going to reveal five simple legal tips for fledgeling startups. Take a look and make sure you have the right protection.

Consider your structure

Before you start work, you will need to register your business with HMRC. It’s advisable to register as a company, rather than a sole trader, as it gives you a little extra protection. You should have a chat with an accountant, too – they will tell you the type of company you should be to save on your tax bill.

Contract everything

From the second you start dealing with other people, make sure you have a contract. It could be a partnership or an employee – it can also be a supplier or investor. In short, anyone that has any contact with your business needs to be held in a contract. It outlines everyone’s responsibilities and expectations and holds both parties to account.

Intellectual property

Don’t forget that your ideas have value, too – and it’s essential you protect them. Trademark registration is a simple process, as is applying for patents or copyrights. Ensure you do this as early as possible. If you have a very good idea, you don’t want someone stealing it from you and making a fortune off the back of it. It’s happened many times before, and will continue to do so if you don’t have intellectual property protection.

Hire a business lawyer

Don’t underestimate how useful a business lawyer can be for your fledgeling startup. They can help you cover yourself in a legal sense, and highlight areas of potential improvements. If someone files a claim against you, they can react quicker as they already understand your business. Just like having an accountant, it will save you money in the long-term. The amount of legal help you might need will be enormous as you grow your company. It makes sound sense – financial and otherwise – to use the same person.

Get insurance

If the worst happens, you have to have insurance. No matter how safe you think you are operating, there is always the chance of something happening. A slip, trip, or fall on your premises can lead to an expensive lawsuit. An unhappy client could pursue you for damages – even if you think you have done nothing wrong. It all adds up to a large payout, which could blow your startup out of the water before you even get started. Insurance will give you the peace of mind you need to make your business success.

Share to Explore !!

Facebook

Digg

Pinterest

Twitter

Reddit

Linkedin

StumbleUpon

Tumblr

Print

email

Yummly

Buffer

London is one of the most sought after places to live on the planet. People from all corners of the world would love the chance to live in this energetic and vibrant city. Whether you’re moving closer to your family or for your job, living in London is unlike anywhere in the world. You have incredible shopping destinations, endless culture and fabulous entertainment right on your doorstep. But due to it’s popularity, buying a home in London can be challenging. From high house prices to finding a suitable area, there is plenty of things you must consider. To make the process easier, there are three things you must do first.

Do your homework

London is an enormous city that is full of different boroughs all of which have their own unique qualities. Use accommodation search engines, talk to friends and search on Google to establish which boroughs might appeal to you. Do plenty of research into each one including property types, transport links and local entertainment. The house prices will also vary from borough to borough and how close you want to live to the city centre. So find out what the average prices are as this will help you budget and plan ahead. If you have a family, you should also research what schools, parks and attractions are in each borough too. This should help you choose some viable places to start your search.

Visit the city

It’s not alway wise to move somewhere you have never been before. So if you have never visited London before, you should always take the time to do so before moving here. You may find that city life is not for you after all or that the areas you can afford to buy in aren’t what you thought they would be like. If you have visited before, you should still visit again but from the perspective of a buyer not a tourist. You can spend your visit contacting Canary Wharf estate agents or viewing potential properties. Try to fit in as many viewings as you can to see what options are available. You can also use this time to explore the borough’s you researched previously. Doing this will help you determine whether moving here is right at this moment in time.

Look for work

With people from the UK and beyond looking for employment in London you face stiff competition. The sooner you start your search for work the better. If you work for a large company, you may be able to relocate to their London office. Or you might want to look for something completely different to what you are doing now. Sign up to recruitment sites or contact an agency to help you find a suitable role. Securing work should be a top priority as it will help to fund your new home and life.

Whatever your reason for wanting to move to London, these tips will help make the transition go a lot smoother. Take the time to do each action and carefully consider each decision you make. Acting on impulse may sound exciting, but it could have expensive repercussions.

Share to Explore !!

Facebook

Digg

Pinterest

Twitter

Reddit

Linkedin

StumbleUpon

Tumblr

Print

email

Yummly

Buffer