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RBI had announced the base rate system which will set the interest rates for the bankers to lend their borrowers. Earlier the rate is known as the Prime Lending Rate(PLR) for the banks. Normally the banks can not lend the money below the PLR to avoid any loss or risk. But, banks started offering the loans cheaper than the PLR to lure the customers. This is also called as the Teaser Loan Rates where the actual loan rates will increase in the later period of time. That will put the extra burden on the borrowers.

RBI come up with the new base rate system where banks can lend the loans based on the new rating system. Earlier it announced that the new system will be effective from April 1,2010. After hearing the request from most of the banks to postpone the new system implementation for another few months, recently RBI announced that the new system will be effective from July 1, 2010.

Also RBI had agreed to exempt the three categories of the loans under this system as follows:

• Staffer Loans
• Loans against Fixed Deposits
• Loans under the differential rate of interest scheme

After the implementation of the new system, it is expected to be increase in the interest rates on the various loans. It includes the home loans which currently offer the teaser rates like 8% for first two years and later the new rates will be effective.

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Introduction

In this article I will be writing about the key points related to choosing the right health insurance policies. It is one of the important financial planning for you and your family. In the recent survey, it shows that India has the highest number of diabetes patients in the world. It is very shocking news and people have to be cautious for protecting their family from the unexpected incidents. This article explains the importance of taking the medical insurance and the key points needs to be considered while taking the health policy. If you have any doubts, please post it in the comments section. If like the article, please get the free email updates.

What is Sum Insured?

Sum Insured(SI) is the one important thing in the health insurance product. It is the maximum amount paid  in case of  claim. Taking the appropriate Sum Insured has to be decided up on the several factors like age, marital status, health condition, nature of work, etc. It is good idea to to talk to the financial adviser if you don’t have the enough knowledge on the financial planning.

Individual Policy or Family Policy?

Another big question is whether you have to go for the individual policy or the family policy which protects the whole family. It depends on the financial situation of your family. If you are not married, then you will go for the individual policy. Normally, the family policy is recommended to reduce the over all costs of the premium. If the money is not a problem, you can go for the individual policy as well.

When to take policy?

There is no right time to take the policy. It is always recommended to take the policy at earliest to reduce the premium. In most of the insurance companies, taking the policy after the age of 35 will under go medical tests and other formalities. That will increase the premium amount payable for every year.

Points to ask before taking the policy

Here I am listing some of the important points which you need to ask before taking the policy.

• What is the maximum amount reimbursed for the room rent, boarding and nursing expenses?. Most of the companies restrict to 1% of the total sum assured.
• What is the maximum amount reimbursed on doctor fees?. Normally it is restricted to 25% to 30% of the sum assured.
• What is the renewal period of the policy?

Summary

I hope this article will be useful for those who want to take the new health insurance policy. It is important for every one’s life and take the suitable health cover for your family. If you have any doubts, please post it in the comments section. I am happy to answer all your queries.

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Earlier I have posted that RBI had suspended the Indian paypal payments. As we know many of the webmasters and small business owner rely on paypal service to receive the money from other countries. The reason why RBI had issue is, you can send the any number of amount using the paypal as the personal payments. These transactions are not submitted to the RBI’s notice and it requested PayPal to provide the adequate information on the issue, till the time resolve is sorted out, RBI ordered paypal to stop the payments to Indian users. Last two weeks Indian paypal users can not withdraw money to their local bank accounts.

From 3rd March, 2010… PayPal lifted the ban and allowed users to withdraw money to their bank accounts. But, there is no option for the personal payments and we can not send any payment as the personal payments. PayPal allows only the commercial payments. It also introduced the Purpose Code which is used to identify the nature of income for the users. The following is the table lists all the purpose codes.

It is good time for the common man when the union finance minister announced the new tax slabs for the common man. The new slabs will definitely reduce the burden of common man and it will be some relaxing news for them because already inflation is soaring to new high. The following table shows the revised tax slabs for the individuals:

The government would allow a deduction of up to Rs 20,000 for investments in long-term infrastructure bonds. The deduction would be in addition to Rs 100,000 allowed under Section 80C of India’s Income Tax Act.

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The government has announced a hike in the prices of auto fuels like petrol prices by Rs 2.67 per litre and diesel prices by Rs 2.58 per litre with effect from tonight.

India’s second largest private sector bank HDFC Bank has increased the fixed deposit rates by 150 points. Earlier I have posted about the CRR Ratio hike by the Reserver Bank of India(RBI). As I have explained in the post. CRR hike will reduce the liquidity of the banks and will tighten the money lending to the customers. This process will force them to borrow money from the public. The only way to attract the public deposits is increasing the deposit rates. We can expect the other banks also will follow the HDFC bank. The following is the updated interest rates:

• ** Only Senior Citizens / Retired Personnel (60 years and above) who are Resident Indians are eligible. The special rates are applicable only for INR deposits.
• *** The FD rate applicable for a monthly interest option will be a discounted rate over the standard FD Rate. Please contact the nearest Branch for further information.
• ****For interest rates on Fixed Deposits for Rs. 15 Lacs and above, please contact your nearest HDFC Bank branch.

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This article explains about the new mutual fund scheme announced my Birla Sun Life Mutual Fund. The name of the new fund scheme is Birla Sun Life Capital Protection Oriented Fund – Series 1. It is close ended 27 month period investment options.

The highlight of this investment is, those who want to invest on the traditional deposits like Fixed deposit,etc. may choose this type of the fund as alternative. Because they invest 90% of the fund into high quality debt markets and remaining 10% will be invested into the equity market. It has less risk compare to the growth fund and also it gains good returns then bank fixed deposits. The following are the some of the important factors about this fund:

• It is close ended fund.
• New Fund Offer Opens: 5th February 2010
• New Fund Offer Closes: 5th March, 2010
• Asset allocation of Debt securities and Money Market Instruments: 80%-100%, Equities and Equity related instruments: 0%-20%.
• Rated AAA(so) by CRISIL
• The scheme shall have Growth Option only.
• The scheme will have duration of 27 months from the date of allotment. No redemption or repurchase shall be permitted prior to maturity of the Scheme. Investors wishing to exit may do so through stock exchange mode.
• Minimum of Rs 5,000/- and in multiples of Rs. 10 thereafter during the New Fund Offer period
• Here’s the best part of investing in this fund. When investing in traditional deposits, you can end up paying as much as 30.9% tax on your returns. However, in Birla Sun Life Capital Protection Oriented Fund – Series 1, you may have to pay as little as 10.3% tax as long term capital gains.
• You can download the application here.

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Introduction

In this article I will be writing about the IT returns filing and why it is important to file the IT returns on correct time without fail. I have been receiving lot of questions related to the IT returns from our readers. This article will answer those questions and subsequently I will write another article about filing the IT returns through website. Please read this article and post your doubts in the comments section. If you like the article, please subscribe to free email updates.

Who has to file the IT Returns?

There is lot of confusion among the people about who are eligible to file the income tax returns and who are not required to file it?. The following conditions has to be met for filing the IT returns:

• You need to file an Income Tax Return if your total taxable income exceeds the basic exemption limit before taking into account deductions.
• For the financial year 2009-2010, the basic exemption limit is Rs.1,60,000. For women, the limit is Rs.1,90,000, while for Senior Citizens it is Rs.2,40,000.
• You do not need to file an income tax return if your total taxable income does not exceed the basic exemption limit before taking into account deductions, even though you may have a PAN.

What are the deductions?

You are required to pay the income tax only for your taxable income. There is certain sections providing the options to reduce the taxable income by investing your money into that specific category. For example section 80c specifies the investment on Insurance, Mutual Funds, Fixed Deposit, Home Loans, etc as the standard deductions. If you are looking for the more details, please read these article:

1. Provident Fund(PF)
2. Public Provident Fund(PPF)
3. Tax Saving Fixed Deposit
4. National Savings Certificate(NSC)
5. Equity Linked Savings Scheme(ELSS)
6. Life Insurance
7. Principal Payment on Home Loans

What are the different ITR forms?

When you are filing the IT returns, depends on the income type your ITR forms will be different. If you want to know more about the each ITR forms, please read the official site.

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Summary

I hope this article will be useful for those who want to file the it returns first time. It is necessary to file the IT returns and it will be good if you do it online. If you have any doubts, please post it in the comments section.

This budget may bring the smiles in people who are looking to invest their money bank deposits and save the tax. Most likely this budget may amend the existing restrictions on tax saving fixed deposits. Nowadays most people prefer the mutual funds as the tax savings instrument because of their 3 years lock-in period. Tax saving fixed deposit has the 5 years as the lock-in and it reduces the banks to get more depositors. Indian Banks Association(IBA) has requested the finance minister to sweeten the tax saving term deposits to lure the investors. The sources said FM is accepted their proposal and we can expect the change in the budget. The union budget will be announced on Feb 26, 2010. The following are the expected changes in the budget but it may have changes.

• The lock-in period for the tax savings fixed deposit will be reduced to 3 years. At present it is 5 years.
• As of now you can show only Rs.100000 in tax savings fixed deposit. It is expected to be increased to Rs.200000 for the financial year 2010-11.
• If the interest earned on single branch exceeds Rs.10000, it is taxable and TDS is deducted by the banker. This limit will be increased to Rs.25000.

These are all only expected changes in the budget. Part of this may be applied or they may ignore it completely. We have to wait and watch till next week. I will write the follow up mail once the budget is announced. Get free email updates to know the budget news.

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