Money Today experts answer your personal finance queries -
Q. I have had a car for three years and plan to buy a new car by the end of next month. Can I transfer the noclaims bonus to my new car or can I sell it to the potential buyer of the existing car for a premium? If yes, how do I go about it? -Rashee Mishra, via email
A. The no-claim bonus on the older vehicle can be transferred to the new vehicle by substituting the vehicle in the policy and retainng the insurance with the owner. In case the insurance policy is also sold along with the vehicle to the new owner, the insured can apply for no-claim bonus reserving letter from the exiting insurer and utilise the reserved no-claim bonus within a period of three years.
Q. My parents do not have health insurance and my mother is a diabetic. Can I buy health insurance for them? What are the factors to be considered before buying insurance? Can a person with diabetes buy insurance? How much should I pay for such a cover? -S Chatterji, via email
A. There are many insurance companies that offer coverage for diabetes, so you can review the benefits, waiting periods, exclusions and features of such products for your mother. Remember that the premium levied on health insurance products rise with age, as it is dependent on the risk insured and health status of a person. Since your mother is diabetic, we would suggest that you purchase individual policies for each of your parent, which suit their different needs and health conditions. Please remember to disclose all medical condition while filling up the proposal form. This will help you have a hassle free experience at the time of claim.
Q. I am 40 and want to buy insurance. I suffered an artery block in 2007 and had a stent implanted. Will any insurance company provide me a life cover? If yes, will it be more expensive than normal coverage? Also, please let me know if I can buy also buy a health cover. -Priya Doshi, via email
A. As you have had a stent implant, a health insurance provider will classify this as a pre-existing condition and levy specific exclusions and waiting periods in your policy. Before choosing a health insurance policy, we would recommend you to evaluate all the policies that are available in the market. You must share the details of all your existing health condition and previous surgery to ensure a hassle-free claims procedure in future. A life insurance company may also levy a higher premium given your condition as per their underwriting guidelines. Please consult an advisor you trust for right suggestions on the possible cover that you may choose.
Q. I am 47, while my wife is 42 and my daughter is 15. I have a family floater health cover of Rs 5 lakh from Oriental Insurance. However, I have been advised to raise my cover to at least Rs 15 lakh. I am not sure if I should take a fresh policy from one of the private companies or increase the cover with the existing insurer. What are the features that I should look for while increasing the cover? -Prashant Singh, Noida
A. A cover of Rs 5 lakh is not inadequate for a family of three. However considering your age, you may consider increasing your existing cover. It would be advisable to opt for a top-up cover to your current policy as you might have finished the waiting period on several ailments. This will also help you cut cost on the insurance premium. In case you are not satisfied with your current insurer, you also have an option of porting your existing policy to an insurer of choice. Features like lifelong renewal, no sub-limit, cashless transactions, wide hospital network, claims settlement procedures etc. must be reviewed while buying, porting or increasing the cover of a policy.
Q. I took a home loan from a private bank. But when I asked the bank for a copy of the valuation report, it refused stating that it was an internal document. Am I entitled to a copy generated by the bank on the property I am buying? -Manikandan, via email
A. As per the regulation that governs credit information companies (CICs), a borrower is entitled to receive a copy of the credit information report (CIR) from the lender only when the credit facility has been denied. Thus, in the current scenario, the bank is well within its rights to deny sharing a copy of the CIR with the customer. Alternately, you can directly apply for a personal copy of the CIR from one of the CICs by paying a nominal charge and submission of identity documents.
Q. We have two flats, one of which is in my husband's name and from which we receive rent. The second is registered in both our names, but we are yet to get its possession. We have taken a loan for the latter, the interest for which exceeds Rs 1.5 lakh and the EMIs are being paid from our joint account in the bank. How should we calculate our tax? -Malay Singh, Delhi
A. Your husband needs to declare his rental income from the first house as he is the owner of house. He can claim 30% deduction from rental income and municipal taxes also. In case there is any interest on loan for first house same can be claimed without any limit. Since the second house is pending for possession, no income-tax liability or deduction is applicable in this case.
Q. I had opened a savings account with a public bank over four years ago, after being introduced by a third person and fulfilling all the know your customer (KYC) requirements. Recently, I tried to open another account with the bank jointly with a family member. I introduced myself for the purpose, but the bank refused to accept it and insisted on an introduction by a third person. Is the bank justified in doing so? -Shivam Pandit, New Delhi
A. It is common practice for most banks to take such proactive steps in order to authenticate and validate the identity of the person who intends to open a bank account with them. Such steps are taken in order to protect the bank and public in general against frauds and misuse of banking system. So, the bank is justified in its demands.
Q. Can I use the fee slips for my MBA coaching to save tax? Under which Section can I apply for the same? I had also got my bike serviced for about Rs 8,000. Can I use the expense incurred on it as a tax-saving option? If yes, under which Section? -S Gunavarthy, via email
A. Claiming deduction for your MBA coaching is neither allowed in Section 80 C nor Section 80E. Section 80 C allows tuition fees paid on children education only and Section 80E allows deduction for interest paid on education loan. In case you are a self-employed person, then the expenses incurred on bike service can be claimed, assuming the bike is being used to serve your customers.
Q. Ten years ago, my father invested Rs 1,000 in a fund and opted for the dividend option. He, however, did not specify any nominees. He passed away a few months ago. Now, I am unable to encash the dividend cheques. How can I transfer these benefits and ownership of the fund? -SN Shrestha, via email
A. In such cases, one should ideally look at getting the holding transferred to the legal successor/heir. In order to do so, one should place a request with the respective asset management company (AMC) in the prescribed format. In this case, if the fund had been jointly held then the second holder would have become first holder. For this, a request should be sent to the AMC in order to get the same transferred to the legal heir. The documents that you will need to submit includes the death certificate, the know-your-customer form, bank account details of the applicant, probate of the Will, succession certificate. Also, please note that in case there are other legal heirs, you will need to produce a No-Objection Certificate (NOC) from other legal heirs and submit the same to avoid any legal troubles in the future.
Q. I have spent my entire savings on research and development activities pertaining to a manufacturing process and have now achieved a breakthrough in an area of technology application in the manufacturing sector. However, I am currently short on cash and need about Rs10 lakh to set up a small unit. What will be the maximum seed capital that I can avail of under the National Equity Fund scheme from any nationalised bank? What are the requirements for getting a loan under the scheme? -JS Verma, Mumbai
A. As per the National Equity fund you can avail maximum of Rs 10 lakh as benefit provided the project cost, including margin money for working capital should not be more than Rs 50 lakh and the promoter contribution is 10% of the total project cost.
Q. I sold my shares in HUL in March 2014. I had inherited these after my father's demise but I do not have a definite proof of inheritance. Will this sale transaction attract any long-term capital gains tax? -PN Vohra, Mumbai
A. The sale transaction has fulfilled the three necessary conditions for tax exemption: namely, the shares are listed, the securities transaction tax is paid and the holding period is more than a year. Also, the holding period starts from the date your father acquired these shares. Since these shares were held for more than 12 months before sale, it is a case of long-term capital gain.
Anil Rego, CEO, Right Horizons, has tackled financial planning; Antony Jacob, CEO, Apollo Munich Health Insurance and KK Mishra, CEO, Tata AIG General Insurance have answered insurance queries; Mohan Jayaraman, Country Head, Experian India, takes on loan-related queries & Sudhir Kaushik, Co-founder and CFO, Taxspanner.com, has provided tax solutions.