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Petrol dearer by Rs 1.55
LIC retains top slot in insurance sector with 81% market share
Rebate on PPF contribution allowed sans form H
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persona finance
Benefits of buying health insurance online
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Petrol dearer by Rs 1.55
The country’s biggest fuel retailer, Indian Oil Corporation (IOC), said in a statement that since last price change, the downward spiral of rupee against the US dollar has continued to reach a low of Rs 60.03 as against Rs 58.94 during the previous fortnight. International oil prices have also shown an uptrend and increased from $115.29 a barrel to $117.19 a barrel. The combined impact of deteriorating exchange rate and increasing international oil prices has resulted in the need to increase petrol prices by Rs1.55 a litre, IOC said. Oil companies raised petrol rates by Rs 1.55 a litre, excluding local sales tax or VAT. The actual increase will be higher and will vary from city to city depending on local taxes. Petrol price in Delhi has been hiked by Rs 1.86 per litre to Rs 70.44, effective tomorrow, as against Rs 68.58 at present. This is the fourth increase in rates since June. Oil firms had on June 1 raised prices by 75 paise, excluding VAT, and followed it with a Rs 2 per litre increase on June 16 and a Rs 1.82 on June 29. With today’s hike, petrol prices have risen by around Rs 7 since June. The revision in prices, as per the practice of changing rates in line with cost every fortnight, was due on Tuesday (July 16) but will be raised a day earlier. However, there will be no change in diesel prices yet as the revision in rates is due at the month-end. With the latest increase, all of the gains made from four reductions in prices earlier this year has been neutralised. The rates cuts had brought down the price to Rs 63.01 at the beginning of May. IOC said there has been a further increase in under-recovery on sensitive petroleum products. At current level, IOC is suffering under-recovery of Rs 9.45 a litre on sale of diesel, Rs 30.53 a litre on kerosene, and Rs 368.50 per cylinder of LPG. For the year 2013-14, IOC is expected to incur under-recovery of Rs 67,000 crore on sale of three sensitive products, which, for the industry will be Rs 1.26 lakh crore.
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BIZ TALK There has always been some kind of stigma attached with the largest public sector insurance company, the Life Insurance Corporation of India (LIC). Opening up of the insurance sector did have its effect on the company, but it has roared back with innovative schemes and improved performance with regard to customer satisfaction to remain as the number one insurance company in the country. AP Singh, Zonal Manager (Northern India) and Executive Director, LIC, talks to Girja Shankar Kaura on the performance and future of the life insurer. Q. What is the market share of LIC now compared to earlier, especially after a number of private insurance companies having come into the country following the opening up of the insurance sector to FDI? A. Yes, there are 23 private insurance companies as of now apart from LIC. Despite the fact they have been there since the year 2000, our market share as on March 31, 2013, was 81 per cent in terms of policies sold and 80 per cent in premium. When it comes to zones, Northern zone is the biggest zone in the country and its growth rate was the highest in the country. Q. What has been the effect of privatisation on the insurance sector and the market? A. When the insurance sector was thrown open, it was expected that this would result in the expansion of the market and the penetration and density of the market would increase, but that has not happened. The market has expanded, but the density continues to be a matter of concern. And rather the penetration has come down. It was 5.1 per cent of the GDP in 2010-11 and it has now come down to 4.1 per cent. The main reasons being sluggish economy and high inflation. People do not have much of disposable income. Whatever they have, they prefer to invest in physical assets like gold and land instead of going for financial instruments. This is happening despite the fact that the disposable income with the people has gone up. Q. How was the business in the last financial year compared to the previous year? A. LIC’s business as on March 31, 2013, was 3,67,55,451 policies as far as the individual policies are concerned. And we earned a premium income of Rs 29,159 crore. Apart from that we have group insurance. Q. What is the target that you have set for this year? A. This year, we have set a target of 57,25,000 policies for northern India. For all India, our target is 4,05,00,000 individual policies with a premium payment of Rs 33,000 crore. Q. How do you see LIC in comparison to other private insurance companies as far as services are concerned and the kind of policies being offered? A. I will not comment about the private insurance companies. They have to run their show as per their own perspective and targets. But as far as we are concerned, one thing is enough for me to point out that despite the passage of more than 12 years, we continue to retain the trust of people, on account of which we are able to sell them products as per their requirements and provide them with the services as per their expectations. As long as we are confident that we would be able to provide them with such services whereby we settle their claims (running into crores) on or before due date, we are confident that we will retain their trust and whatever be the number of players, it is not going to affect us. Q. When the private insurance companies came in, LIC was hit hard and lost a number of customers. How did LIC evolve itself and what is the reason that the customers have come back to LIC? A. It would not be right to say that LIC got a setback and customers went away. They did not go away in hordes. The going away happened over a period of time because people were enthused with the idea of new companies, which made glitzy and glossy presentations. The customers got carried away not only by this but also by the unrealistic expectations that they aroused, which we knew that they would not be able to deliver. It was not connected with ground realities, so we allowed things to happen. We had the confidence that the customers would come back and that’s what happened. For some years we did suffer, but the customers soon realised that LIC was the right place to be and soon they started coming back. And they came back in a much shorter time than the time they took in going out. Q. Can you give us the number of customers that went away and came back? A. There was a time when our market share came down to 50 per cent or even slightly less than that. But now we are again back to 83 per cent in terms of policies that we sold. Q. You would agree that there has always been a mental block with the customers that they would have to run from pillar to post to get the amount due on their policies once they get matured? What has been the change in the attitude of LIC employees now towards the customers? A. As far as we are concerned, we have taken a lot of initiatives to ensure that we create customer orientation programmes for the employees. And that happened much before the competition came in. This has been an ongoing exercise, which started in the 1980s and is still underway. The aim has always been to make the LIC employees customer sensitive and ensure that we are always ahead of the competition.
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Tax Advice by SC Vasudeva
Q. Recently I had read in your column that while extending a PPF account one has to submit form H. I had opened my PPF account with a Post Office on November 20, 1997. I gave an application for extension on April 1, 2013 and the Post Office extended my PPF account but did not ask for form ‘H’. Please confirm whether I should submit form ‘H’ on my own and will I will get rebate under Section 80C. A. The requirement for filing form ‘H’ is contained in Provident Fund scheme. If the Post Office did not ask you to file the relevant form, there is no fault on your part. You would in any case be entitled to claim deduction in respect of amount deposited during the extended period as there is no provision in the Act for not allowing a deduction in case form ‘H’ has not been filed. Q. I understand that long-term capital gains (LTCG) arising on sale of shares of a listed company is exempt under Section 10(38). However, if trading of shares has been suspended at a stock exchange, can the exemption u/s 10(38) be availed. A. Section 10(38) of Income-tax Act, 1961 (The Act) provides that any income arising from the transfer of a long-term capital asset being any equity share in a company would be exempt where the transaction of sale of such equity share has been entered into after the date on which the securities transaction tax became applicable and that such transfer of equity share has been subjected to securities transaction tax. Therefore, if the trading of shares has been suspended, transfer of the equity share may be construed as having been effected in an off-market transaction which may not be subject to securities transaction tax. It would be, therefore, advisable not to enter into a transaction of sale of equity shares quoted on a stock exchange without going through the procedure prescribed in Section 10(38) of the Act.
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Tax treat for senior citizens
Though we don’t have social security net for senior citizens, the government grants various benefits to senior citizens in the form of special savings schemes, pension schemes, postal schemes and health insurance schemes/policies etc. Balwant Jain
Though we do not have the social security net for senior citizens, but the government tries its best to make their lives comfortable by giving various tax exemptions. The government grants various benefits to senior citizens in the form of special savings schemes, pension schemes, postal schemes and health insurance schemes/policies etc. This article dwells upon the various benefits extended to senior citizens under the provisions of income tax laws. Who is a senior citizen?
As per the provisions of the income tax laws, any person who is above 60 years of age or has already completed 60 years as on the last day of the financial year is treated as a senior citizen for the whole year. Let us now understand the various benefits available to senior citizens. Higher income tax slabs
The basic individual exemption limit for general public is Rs 2 lakh up to which a person does not have to pay any income tax. However, in case of senior citizens who are Indian Residents, the basic exemption limit applicable is Rs 2.50 lakh. Moreover, for the special class of senior citizens i.e. the persons who have completed 80 years on the last day of the financial year, the basic exemption limit is Rs 5 lakh. So in case you fall in this special category of very senior citizen, you do not have to pay any tax till you earn Rs 5 lakh in a year. Rebate on Mediclaim
The deduction available for health insurance premium popularly known as Mediclaim is Rs 15,000 for a family. However, if the premium is paid for a senior citizen, the amount of deduction available goes up to Rs 20,000. Likewise for your parents, there is a separate deduction of Rs 15,000 for health insurance premium paid by you. In case the premium is paid for the parent/s who is/are a senior citizen, the person paying the premium can claim a separate deduction of Rs 20,000 in addition to claim of Rs 15,000 in respect of premium paid for self, spouse and children. In case of the person paying the premium and his parents both are senior citizens, the deduction available under Section 80 D for each category will be up to Rs 20,000 each. In that case this person can claim a deduction of Rs 40,000 under Section 80 D. In addition to Section 80 D, the income tax also allows deduction for expenditures actually incurred for treatment of family members in respect of some specified diseases. A deduction under Section 80DDB is available for Rs 40,000 for treatment of self, spouse, siblings, parents, and children for expenditure incurred for treatment of specified disease. However, this deduction goes up to Rs 60,000 in case the person to be treated is a senior citizen. This way we find that the Income Tax Act has provided quite a few benefits to senior citizens to help them wade through their old age, by way of higher benefit for Mediclaim/medical expenses when the medical cost constitute a significant portion of their budget. Form No. 15 H
Senior citizens generally face the problem of cash crunch and this gets aggravated when tax is deducted from their income especially when they do not have taxable income. So here also the income tax laws allow them a concession by letting them submit form No. 15 H for no deduction of tax. Senior citizens can submit form no. 15H for receipt of income without deduction of tax at source for income like interest, withdrawals from NSS account, and income from units of mutual funds if total tax liability is nil for the year. This form needs to be submitted every year to the payer of the income. Exemption from advance tax
Generally for the senior citizens who have retired and are living on their savings in the form of deposits, they have to go through the tedious process of having to pay the advance tax three times in a year, in case the tax liability payable on their total income exceeds the tax already deducted by Rs 10,000. In order to relieve such senior citizens, the income tax laws provide that these senior citizens do not have to pay any advance tax, and can pay their taxes while filing their income tax returns. However, this relief for exemption from payment of advance tax is available only if you are not having any income which is taxable under the head business or profession. So in case you have taken up consultancy after your retirement, you will still have to pay the advance tax but many senior citizens have been spared from the tedious procedure of payment of advance tax. Rebate under Section 80 C
The deduction under Section 80 C is normally availed by people who are working through their career and the items generally covered are school fee, repayment of home loan, life insurance premium and provident fund contribution etc. But only a few items are available for senior citizens under Section 80 C like contribution towards senior citizen savings scheme. The interest on this scheme is higher than the generally offered under bank fixed deposit and at the same time they can avail deduction under Section 80C. This way you see that the Government of India provides several tax-saving provisions for senior citizens. Their lives will become more comfortable if we as a family unit show compassion towards them and make society a better place for them in their sunset years. The author is CFO, Apnapaisa. The views expressed in this article are his own |
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Benefits of buying health insurance online
Shopping online is a trend that is rapidly catching up with people the world over. Today, in addition to purchasing retail products online, service providers too are giving their customers the benefit of purchasing services online. An increasing number of people are getting comfortable with the concept of buying products online, be it air, railway, or even bus tickets. Insurance is one such service/product that is accessible to everyone from the comfort of their home. These days, there is an array of insurance products ranging from motor to health and even a travel policy that one can conveniently buy online. Moreover, in addition to the ease of purchase, there are a whole lot of other advantageous features that the online option comes with. Some of them are listed below. Why online is beneficial for you
quick quotes: Several insurers these days offer online premium calculators. This feature provides you with the advantage of being able to determine the premium to be paid, depending on the plan of your choice, thus allowing you to pick the product that you consider most suitable for your needs. exclusive offers and add-ons: The benefit of buying products online is the availability of exclusive add-ons which are not offered otherwise. Some insurers also offer exclusive benefits such as discounts on medical expenses, etc., upon renewal of an already existing policy. This is usually offered by virtue of exclusive tie-ups that insurers have with hospitals, service centres etc. less time consuming: Buying your health or motor insurance policy online is also less time consuming. One of the prime reasons for this is the instant policy issuance which takes place in just a few minutes, without any hassle. ease of purchase: A major plus point when purchasing your health, motor, or travel policy online is the immense ease of purchase. Since the entire process is done by you, you get the advantage of browsing through an array of products, and deciding on what suits you best, without the possible biased opinion of any intermediary. Also, buying your insurance plan online usually offers you with the option of various modes of payment, thus allowing you to pick the one you find most convenient. lower costs: The prime advantage of buying your insurance online as compared to doing it offline is the cost factor. The lower cost of administering a policy brings in the advantage of lower premium costs. Furthermore, availing of the online facility to buy your insurance plan also comes with the advantage of various discounts, and even an EMI option, depending on the type of insurance plan purchased. other benefits: In addition to the usual benefits that are offered, some insurers also offer other valued added services, including live chat services for health-related issues. This could comprise of product-related queries, policy related queries, or even chats with doctors, specialists, and other health experts, upon purchase of a health insurance plan. The author is Head, Operations, Customer Care & Direct Marketing (Web Sales), Bajaj Allianz General Insurance. The views expressed in this article are his own
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New Delhi, July 14
It is well-known that the true character of a society is judged by the way it treats its elders. The senior citizens of a country need to be taken care of by the society in general and by their children in particular.
