I want to invest in mutual funds. Will I get tax deductions under Section 80C on them?
You can invest in equity-linked savings schemes of mutual funds, which are eligible for Section 80C benefits. Investments in ELSS have a lock-in of three years. Dividends and long-term capital gains on redemptions are tax exempt.
My eldest son got married in December. How much of cash gifts can we show without being taxed. Also, how much can I put into my son’s and daughter-in-law’s account without them being taxed?
The receiver has to pay tax on any gift valued at R50,000 or more. But there are certain exemptions. The exempted gifts include those one receives from relatives on marriage; gifts received by a daughter-in-law from her parents-in-law; gifts received from parents and grandparents; and gifts by will and inheritance. The relations who come under the ambit of the exempted category are mostly blood relations and have been defined in the Act. But the gifts received by a son-in-law from his parents-in-law are taxable.
I purchased a plot in May 2012 and paid stamp duty of R3.5 lakh. Can I claim R1 lakh as stamp duty under Section 80C?
The amount you pay as stamp duty when you buy a house and that you pay for registration of the documents of the house can be claimed as deduction under Section 80C in the year of purchase of the house. The exemption is not available on plots.
What long-term factors should I look at before taking a pure life term policy?
The sum assured of the term policy should factor in the expenses of the family in the remaining life period of the spouse in case of the demise of the bread earner, education expenses of the children, marriage expenses of the children and outstanding loans. The existing life insurance cover and available financial assets can be reduced from the above aggregated amount to arrive at the required sum assured. In selecting the insurance company, you may compare premiums, claim settlement and repudiation ratios and service support. Also, online term plans are much cheaper.
Should I take two health insurance policies to spread the risk?
Health insurance policies issued by general insurance companies are mostly indemnity policies, i.e, the reimbursement amounts cannot exceed the hospitalisation expenses. If two policies have been taken from two different companies, the premium load is increased, but the expenses are shared among