Money today june 2014 IN

PLUS: EQUITIES How auto ancillary stocks are likely to perform BEST MUTUAL FUNDS JUNE 2014 GETTING YOUR ACT RIGHT Strategies to maximise gains from mutual fund investments PLUS: HOW TO CALCULATE CAPITAL GAINS TAX LIABILITY INSURANCE Things you should know while buying a home cover RNI No DELENG/2006/18800/REGISTERED NO L/HR/FBD/258/1315/BPC FARIDABAD/DATE OF POSTING :EVERY MONTH Rs 50 MoneyToday MAKES YOU RICHER JUNE 2014 www.moneytoday.in Editor-in-Chief: Aroon Purie Group Chief Executive Officer: Ashish Bagga Group Synergy and Creative Officer: Kalli Purie Executive Editor: Sarbajeet K Sen Senior Editor: Mahesh Jagota Associate Editors: Tanvi Varma, Dipak Mondal Assistant Editor: Teena Jain Kaushal Special Correspondent: Rahul Oberoi Principal Correspondents: Md Shoaib Zaman, Renu Yadav Senior Sub-editor: Amit Kumar Art Department: Chief Visualiser: Asit Roy Senior Infographist: Pragati Srivastava Chief of Production: Harish Aggarwal Production Coordinators: Narendra Singh, Rajesh Verma Group Business Head: Manoj Sharma Associate Publisher (Impact): Anil Fernandes Impact Team Senior General Managers (Impact): Kaustav Chatterjee (East), Jitendra Lad (West), Head—(North) Subhashis Roy, General Managers: Shailender Nehru (Bangalore), Velu Balasubramaniam (Chennai) Consumer Marketing Services: Vikas Malhotra, Head, CMS/CRM News-stand Sales: DVS Rama Rao, Chief General Manager Deepak Bhatt, General Manager (National) Manish Shrivastava, Senior Manager (North) Joydeep Roy, Senior Manager (East) Rajesh Menon, General Manager (West) Rakesh Sharma, General Manager (Operations) Volume 9, Number 6, for the month June 2014, released on May 25, 2014 ● Editorial Office F-26, Connaught Place New Delhi 110001; Phones: 011 23315801-4; Fax: 011 23736217 ● Subscriptions: For assistance contact Customer Care India Today Group, A-61, Sector-57, Noida 201301, UP Phones: (95120) 2479900 from Delhi and Faridabad; (0120)2479900 from Rest of India Fax: (0120)4078080; e-mail: wecare@intoday.com; ● Sales: Direct all trade enquiries to General Manager (Sales), Living Media India Limited, A1 – A2 Enkay Center, Vinujya Nikunj, Udyog Vihar, Phase 5, Gurgaon, Tel: +91-124-4948400 ● Regd Office: K-9 Connaught Circus, New Delhi 110001 ● Impact Offices: India Today Group, 1201, 12th Floor, Tower 2A, One Indiabulls Centre, (Jupitar Mills) S.B Marg, Lower Parel (West), Mumbai-400013 Tel: 022-66063355; Fax: 022-66063226 ● Living Media India Limited, Guna Complex, 5th Floor, Main Building, No.443, Anna Salai, Teynampet Chennai-600018 Tel: 044-28478525; Fax: 044-24361942 ● 201-204 Richmond Towers, 2nd Floor, 12, Richmond Road, Bangalore-560025; Phones: 22212448, 22213037, 22218343; Fax: 22218335; Cable: Livmedia, Bangalore ● 52, Jawaharlal Nehru Road, 4th Floor, Kolkata-700071; Phones: 22825398; Fax: 22827254; Cable: Livinmedia, Kolkata ● 6-3-885/7/B, Somajiguda, Hyderabad-500082; Phone: 23401657, 23400479, 23410100, 23402481, 23410982, 23411498; Fax: 23403484 ● 39/1045, Karakkatt Road, Kochi 682016; Phones: 2377057, 2377058 ; Fax: 2377059 ● 2/C, “Suryarath Bldg”, 2nd Floor, Behind White House, Panchwati, Office C.G Road, Ahmedabad-380006; Phone: 26560393, 26560929; Fax: 26565293 ● Copyright Living Media India Ltd All rights reserved throughout the world Reproduction in any manner is prohibited Published & Printed by Ashish Bagga on behalf of Living Media India Ltd Printed at Thomson Press India Ltd., 18-35, Milestone, Delhi-Mathura Road, Faridabad-121007, (Haryana) Published at K-9, Connaught Circus, New Delhi - 110 001 ● India Today does not take responsibility for returning unsolicited publication material For reprint rights and syndication enquiries contact syndications@intoday.com or call +91-120-4078000 From the Executive Editor T he Indian electorate has delivered a historic mandate in favour of a Narendra Modi-led government at the centre By the time this issue hits the stands, the process of constituting the new government would have been set in motion with Modi likely to be sworn in as Prime Minister on May 26 The whiff of a strong government under a decisive leader has ushered fresh hopes for growth and development by bringing an end to the extended policy paralysis that had afflicted the outgoing regime The changing mood can be felt by developments in the stock market The benchmark indices scaled new highs as counting day, May 16, approached And as results trickled in indicating a clear majority for the National Democratic Alliance, the BSE Sensex spurted over 1,400 points intra-day to breach 25,000 for the first time and touched a record high of 25,375 The consensus view is that this may be the beginning of an extended bull run in equities These could be good times to dabble a bit in the equity market But what if you are not adept at investing in the stock market? If you not know the rules of the game and the way it is played, equity investment is fraught with high risk It is then best to leave it to experts to manage your money to help you ride the likely bull run We have always held that the best way for those with lack of knowledge or expertise in the markets is to adopt the mutual fund route The mutual fund industry is among the best regulated sectors of the financial landscape and handles your money at negligible cost However, even when you choose to adopt this route, there are basic investment norms relating to the sector that you should be aware of to maximise your gains Among these, you should know how a systematic investment plan weighs against investing a lump-sum amount You should also know how to approach sectoral funds and thematic funds and how risky are these Should you invest in new fund offers or go for established funds that have track records? We tell you how to tackle all these issues, and some more, in our cover story starting on page 20 The investing tips may come in handy Though your mutual fund investments are likely to witness less volatility, there are market risks associated with them Little wonder the variation among fund performances For example, the two best performing openended equity diversified funds, UTI Transportation & Logistics Fund and Reliance Small Cap Fund, have delivered returns of 60.95% and 43.17%, respectively, for the year ended 31 March 2014, while the worst performing funds, Sundaram Select Thematic Funds - PSU Opp and Baroda Pioneer PSU Equity Fund, delivered returns of -0.35% and 1.35%, respectively In our annual mutual funds special issue, we also bring to you the best performing funds at the end of 31 March 2014 A glance through the comprehensive data on fund performance should give you a good idea on where to place your bets SARBAJEET K SEN, Executive Editor @sarbajeets www.syndicationstoday.in MONEY TODAY June 2014 03 CONTENTS Illustration: PRAGATI MUTUAL GAINS Cover Story 20 The basics of mutual fund investing and how different schemes performed in 2013-14 38 Strategies to build a mutual fund portfolio that can give the best returns 42 Fund managers of best performing funds talk about what made them click 50 Are exchange-traded funds a good investment option? Cover: AJAY THAKURI DISCLAIMER MONEY TODAY aims to inform readers and impart knowledge on investment options and schemes Every possible care is taken in providing the most accurate, updated and objective analysis and data, but readers are expected to make their own decisions MONEY TODAY will not be held liable for any loss arising out of any investment or business decision taken on the basis of features and articles published in the magazine Investing 16 SECURE YOUR HOME Questions that you should ask while buying a home insurance policy 74 FAST FORWARD Auto ancillary stocks are expected to perform well in the near future 78 TRACKING YOUR GAINS A guide to calculating tax on capital gains from stocks and mutual funds 80 DONATE AND SAVE TAX Contributing to charities and NGOs allows you to reduce the tax outgo of auto parts makers have seen a major uptick of late These may be good 74 Stocks investment bets in the coming year Advisory Expert Speak 44 On why private banks such as ICICI Bank and Axis Bank may be rerated ANAND RADHAKRISHNAN CIO, Franklin Equity, FT Investments – India 48 On how valuebased stock picking helped his fund outperform peers VINAY R KULKARNI SrVP, Fund Manager, Equity, HDFC AMC 49 Anticipating rate movements helped his fund deliver good returns 82 READY YOUR DOCUMENTS Experts from Deloitte tell you about the papers that you need while filing tax returns 84 ON THE WAY UP How the recent appreciation of the rupee will affect various asset classes 86 NOT WORTH ITS WEIGHT Gold has not been performing well of late Investors will not lose much if they stay away 88 THE ART OF BATTLING GIANTS Cases where minority shareholders made their views heard by the managements MALAY SHAH Fund Manager, Peerless Mutual Fund MT News & Data 10 Markets Ride the Modi Wave Cover Clause May Hit Company FDs RBI Ends Penalty For Dormant Accounts 98 Best Loan Buys 86 Gold is unlikely to perform well in the near future From time to time, you will see pages titled ‘An Impact Feature’ or ‘Advertorial’ in MONEY TODAY These are no different from advertisements and the magazine’s editorial staff is not involved in their creation in any way TALK BACK | LETTERS TO THE EDITOR The cover story of May 2014 issue (Global Dream) will prove to be a huge help to people who are planning to settle abroad I moved to the US in 2010 for two years and I remember the process of sorting my finances to be an excruciatingly long affair Banks were of little help and instead of helping me, the representatives were busier peddling all sorts of products I think the biggest issue for people who move abroad is dealing with the taxation laws in both the countries It will not be a bad idea for the Income Tax department to I would like to bring to your attention the apathy of national banks at selling the inflation-indexed National Savings Securities These bonds were launched to help investors save at a higher rate than inflation However, when I approached the Bank of India branch in Nagpur, the officials expressed their total ignorance about the scheme and were unable to even list its features Due to this, our HUF was unable to participate in the scheme and invest our funds in time to obtain tax exemption before March What is the point of launching a scheme if it is not marketed well and does not benefit the investors? The National Pension Scheme is another example of a scheme that hasn’t been carefully marketed Good schemes alone won’t suffice; they need to be made available at every branch and the officials need to be wellinformed about them Otherwise, both schemes will fail to benefit most investors NARESH GROVER, Nagpur The guest column by Yurop Shrestha (Quest for a Green Card, May 2014) was an eye-opener Given how coveted the US For Subscription Assistance set up a helpline for people who might be moving abroad but still have a source of income in India SANJAY SINGH, Gurgaon Green Card is, I was surprised to read that the process can be initiated with $1 million There are thousands of people who end up spending a lot more to get a Green Card because they are unaware of the EB route This article will go a long way in helping people who wish to settle in the US AJAY SHAH, Gandhinagar The article on small-cap stocks (Adding Shine to the Portfolio, May 2014) was informative Although small-caps are expected to enjoy a good run, given the improved market sentiments after elections, retail investors should not invest more than 5% of their core portfolio in small-cap stocks VINAY TIWARI, Thane CORRIGENDUM In the Query Corner of May 2014, the designation of KK Mishra and Mohan Jayaraman were incorrect KK Mishra is CEO of Tata AIG General Insurance, while Mohan Jayaraman is MD, Experian Credit Information Company and Country Manager, Experian India Also, the author of ‘Getting a good break’ is Arunima Mishra and not as mentioned The errors are regretted - Editor NOW CALL at the new toll-free number 1800-1800-100 (from MTNL/BSNL lines only); 0120-2479900 from Delhi and all private service providers; Mon-Fri, 10 a.m.-6 p.m., E-MAIL TO: wecare@intoday.com WRITE TO: INDIA TODAY CUSTOMER CARE, A-61, Sector 57, NOIDA, 201301 Mail: How to Talk Back Money Today, FC-8, Film City, Sector 16A, Noida, UP- 201301 E-mail: letters.moneytoday@intoday.com Readers are recommended to make appropriate enquiries before sending money, incurring expenses or entering into commitments in relation to any advertisement appearing in this publication The India Today Group does not vouch for any claims made by the advertisers of products and services The printer, publisher, editor-in-chief and the editors of the India Today Group publications shall not be held liable for any consequences in the event of such claims not being honoured by the advertisers FOR SUBSCRIPTION ASSISTANCE CALL: NOIDA: (0120) 2479900 Toll-Free number: 1800 1800 100 (Delhi only, MTNL line) & 23684850 (Airtel subscribers) Fax 0120-4078080 Record voice mail: 23684848 Ext Dial KOLKATA: Tel 22821922, 22827726, 22825398 Fax 22825398,22827254 BANGALORE: Tel 2212448, 2290562, 2218343 Fax 2218335 MUMBAI: Tel 24444423/4/5/6 Fax 24444358 CHENNAI: Tel 28478525-44 Fax 28472178 Write In: WE CARE, The India Today Group, A-61, Sector-57, Noida (UP)-201301 e-mail: wecare@intoday.com All disputes are subject to the exclusive jurisdiction of competent courts and forums in Delhi/New Delhi only 06 June 2014 MONEY TODAY On the Web BEST OF MONEY TODAY 24x7 MoneyToday Untangle all aspects of personal finance by going through our stories, tools and interactive features on www.moneytoday.in Being a consumer is hard work You have to remain informed to make the right choices and bag the best deal and alert to avoid cons and frauds Read our covers to make your life easier The Year of Hope BEST OF ARCHIVES January 2014: After a lull for a few years, 2014 promised to bring in a number of investment opportunities The emergence of a stable government at the centre has also triggered a bull run which is expected to continue for the next few years Read this story to know how you too can take part in the run and build your wealth Best of Both Worlds May 2014: Peruse this story to know how multi-asset funds are a good way to diversify and earn decent returns Read the story at: Read the story at: moneytoday.in/investmentplan2014 moneytoday.in/multiassetfunds-risk Bull’s Eye LAST MONTH’S QUESTION Do you expect real estate prices to fall this year? Your Answer 2.44% Can’t say Given the demand saturation in most realty markets, it is no wonder that most readers think real estate companies will drop prices to clear inventory 51.22% Conducted between 30 April and18 May Yes April 2014: This story will help you understand how focused equity funds have the potential to generate higher returns than diversified funds Read the story at: moneytoday.in/focusedfunds-returns POLL QUESTION 46.34% How much you expect the Sensex to rise by June-end? No 2% 5% Like us on Facebook! Visit https://www.facebook.com/MoneyToday for updates, information and insights from the world of personal finance 10% Log on to www.moneytoday.in to cast your vote UTILITY TOOLS Risk Calculator Analyse your risk appetite to determine how to invest Risk Calculator Analyse your risk appetite to determine how to invest Education Planning Calculate how much you will need for your child’s higher studies Asset Calculator Plan your investments intelligently to meet future financial needs EMI Calculator Know how much you will have to pay as monthly installment on your loan Retirement Planning Figure out how to maintain your current lifestyle after you retire To access the relevant story, type the headline in the search box on our Website www.moneytoday.in So, to read stories on spending, type ‘How to be a Smart Spender’ or ‘Your Financial Rights’ PERSPECTIVE | N E WS YO U CA N U S E Markets Ride the Modi Wave T Illustration: PRAGATI he victory of the BJP-led National Democratic Alliance (NDA) in parliamentary elections has triggered a bull run in equity and currency markets Analysts are already predicting the ‘mother of all bull runs’ in Indian equities Some are even forecasting that the rupee will appreciate to 55 a dollar Amidst all this euphoria and changing investment landscape, how should retail investors view different asset classes and build a portfolio? Equities: Between May 12, when the exit polls hinted at a comfortable victory for the NDA, and May 19, the Sensex jumped close to 6% from 22,994 to 24,363 On the day of the results, the Sensex breached 25,000 before settling at the 24,100 level at the close of day Despite the run-up, the valuations are still at a fair level and experts see the bull run continuing at least for a year Large brokerage houses have already revised upward their year-end target for the Nifty and the Sensex Nomura has raised its 2014 target for the Sensex to 27,200 from 24,700, while Citigroup raised its year-end target to 26,300 Though the stock market sentiments are positive, the investment strategy has to be different from what it was six-eight months ago in order to make gains The sectoral outlook has changed, and so has outlook for stocks of different market caps The large-cap and defensive sector bias has to give way to a high-beta, cyclical and mid- and small-cap strategy to gain in the short and medium term Sectors such as ener- INVESTING | Y E L L O W M E TA L NOT WORTH ITS WEIGHT Investors won’t lose much if they shunned gold | By Tanvi Varma aveen Mathur keenly tracks economic data from the United States, from growth and inflation numbers to the central bank’s rate-setting meetings Why? These indicators give him clues to the possible direction the price of gold could follow in India, says the associate director for commodities and currencies at Angel Broking And the latest data isn’t very encouraging for the yellow metal Bullion prices are likely to remain weak as an economic recovery in the US will give more room to the Federal Reserve, the country’s central bank, to reduce its monthly bond purchases and raise interest rates sooner than anticipated, prompting investors to shift their money from gold to equities in search of higher returns, he says For years, investors worldwide have pumped money into gold as the yellow metal was considered a safe investment But that view was shattered in 2013 when gold prices slumped 28% in dollar terms This was the first annual loss in 12 years and the steepest in three decades The fading appeal of gold as a Illustration: AJAY THAKURI N Weak Appetite Global gold demand dropped last year as prices fell -15% 3,756 4,416 Gold demand in tonnes 5,000 17% 2,210 1,896 28% 1,654 1,289 1,568 -51% 544 -1% 773 405 279 408 2013 -32% -416% 369 2012 -881 % Change Jewellery Bars and coins -1,000 safe investment is evident also from the changes in demand Investment in gold jewellery, bars and coins rose in 2013 but exchange-traded funds focused on bullion experienced massive outflows ETF investors sold about 900 tonnes of gold Overall, demand for gold fell 15% in 2013 from the previous year (See Weak Appetite) Gold prices in India, however, fell only 5% in 2013 as the rupee fell nearly 20% against the US dollar As India buys almost all its gold from overseas, the rupee’s decline offsets the price drop in overseas markets by making imports costlier Also, the government’s successive increases in gold import duty to curb demand as part of efforts to narrow the current-account deficit created a premium on bullion prices Abhishek Chinchalkar, precious-metals analyst at Anand Rathi Commodities, says this premium is around $70 to $90 (about Rs 4,200-5,400) to the spot international price and this will drop only if the restrictions on gold imports are eased Investors have also been mystified by the divergence in returns generated by gold ETFs in India compared with the market price Gold ETFs showed returns of a negative 14% in 2013 Manish Banthia, Fund Manager, ICICI Prudential Gold ETF, explains the anomaly He Investment Technology Central bank ETFs & similar products says that, while the rupee price of physical gold takes into account the premium, the valuation of the ETFs doesn’t consider physical market premiums because it is based on an old formula that considers the imported cost converted into rupees plus insurance and taxes “Investors should not be perturbed by this since the physical gold derived by selling the ETF can be sold at market price,” he says “The -14 % Gold ETFs’ average returns in 2013 as against 4% rise in the NSE Nifty divergence is only notional.” So, where is gold headed? And what should investors do? Financial planners typically recommend investing 10% of the portfolio in gold, depending on the investment objective and risk appetite According to Angel’s Mathur, long-term investors should add gold as part of their portfolios on every price drop because bul- Total demand Source: World Gold Council lion’s appeal will never wane irrespective of global macro-economic developments He says one should invest regularly via a systematic investment plan to get an average price This could be done via an ETF or through gold coins and bars as a physical investment Chinchalkar says gold prices in rupee terms will depend on the foreign-exchange rate in coming months “If the rupee weakens against the dollar and slides back towards 64 or 65, the downslide [in gold prices in rupee terms] is likely to be contained,” he says He suggests investors should consider selling the yellow metal if prices range between Rs 30,000 and Rs 32,000 per 10 grams Mathur says investors looking to make a lump-sum investment should wait until prices drop to Rs 25,000 per 10 grams as the downside risk is limited from there on He expects gold prices to trade in a range of Rs 24,000-34,000 per 10 grams over the next one year “The general sentiment is negative The outcome of elections will decide the trajectory of gold imports and, in turn, the price,” says Mathur “If the tough stance continues, the likelihood of gold prices underperforming is very high.” Courtesy: Business Today MONEY TODAY June 2014 87 STOCKS | MINORITY SHAREHOLDING THE ART OF 2014 Maruti Suzuki India Suzuki Motor Corp holds 56.21% share in Maruti Suzuki India Ltd (MSIL) MSIL signed a contract with a subsidiary of SMC by which the latter would build its own manufacturing unit in Gujarat and sell the cars to MSIL at a profit, for MSIL to distribute A number of other MSIL shareholders, including ICICI Prudential MF, Reliance MF and UTI MF, have objected claiming MSIL is getting a raw deal Impact Board has decided to seek minority shareholders’ approval Arming the Underdog Reforms of the last decade that protect the rights of minority shareholders 2001 Voting by postal ballot introduced for certain types of resolutions 2010 2012 Shareholder participation in meetings through video conferencing and other electronic means allowed E-voting made mandatory for top 500 companies listed on the NSE and the BSE BATTLING GIANTS When minority shareholders disagree strongly with company policy, they usually sell their shares and exit, fearing they will not be taken seriously But there have been a few doughty ones who have stood up and objected strongly enough to make an impact Some recent examples: Research by: NITI KIRAN and JYOTINDRA DUBEY Graphics by: ANAND SINHA 2014 2012 2011 2009 Essar Global group owns 78% of Essar Energy It proposed buying the remaining 22% stake for $1.5 billion valuing Essar Energy at onesixth of its listing price in 2010 Minority shareholders in Essar Energy, such as Henderson Global Investors and Standard Life, rejected the bid saying the company was being undervalued The government holds 90% share in Coal India Ltd (CIL) A minority shareholder, The Children Investment Fund Management (UK) Llp, accused CIL of damaging shareholder interest by its “acquiescence to interference by the Prime Minister’s Office” on coal prices It has gone to court with a class action suit, claiming Rs212,250 crore Crompton Greaves is a Gautam Thapar’s Avantha Group company where the promoter holds 41% of the shares It bought an aircraft for Rs 270 crore in 2010/11, a year when its net profit was Rs 70 crore and its cash balance stood at Rs 150 crore Minority shareholders questioned the management’s corporate governance practices Ramalinga Raju, promoter and CEO of Satyam Computer Services, with 9% share, proposed buying Maytas Properties for $1.3 billion and acquiring a 51% stake in Maytas Infrastructure for $300 million, moves which could exhaust its nearly $1.2 billion cash pile Many other shareholders objected Impact Impact Impact Impact Essar Energy has set up an independent committee drawn from its board of directors to reconsider its terms of purchase Legal battle is still on The company sold the jet at the price at which it was purchased The acquisition was called off B Ramalinga Raju’s letter, admitting to what came to be known as the Satyam scam, came soon after Essar Energy Coal India Ltd Crompton Greaves Satyam Computer 2012 The new Companies Bill passed which gives shareholders greater rights, including the right to approve certain related-party transactions, exit options, etc It also allows class action suits – lawsuits brought by one or more individuals on behalf of a large group of shareholders who have the same complaint against a company QUERY CORNER | 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 I go about it? INSURANCE R E S O LV I N G F I N A N C I A L D I L E M M A S 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 —Rashee Mishra, via email Illustrations: PRAGATI Q INSURANCE: My parents 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? ing 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 —S Chatterji, via email A Q 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 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-exist- Q I am 47, while my wife is 42 and my daughter is 15 I have a family floater health cover of Rs 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 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 MONEY TODAY June 2014 91 QUERY CORNER | R E S O LV I N G F I N A N C I A L D I L E M M A S 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? INVESTING —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 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 TAXATION: I sold my shares in HUL in March 2014 I had inherited these after my father’s demise but I not have a definite proof of inheritance Will this sale transaction attract any long-term capital gains tax? —PN Vohra, Mumbai A Q duced 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 TAX 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 INVESTING: 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 intro- 92 MJune 2014T ONEY ODAY 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 A 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 —Malay Singh, Delh tax? IINVESTING 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 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 incurred on bike service can be claimed, assuming the bike is being used to serve your customers Q INVESTING: 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 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? Loa n In such cases, one should ideally look at getting the holding transferred to the legal successor/heir In order to 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 —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 DO YOU HAVE QUERIES ON TAX, INSURANCE, INVESTMENTS? 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 Log on to moneytoday.in to submit your questions MONEY TODAY June 2014 93 GOOD HOUSEKEEPING ON THE GO! GOOD HOUSEKEEPING now available on iPad, iPhone, Android, Kindle Fire, PC and Mac Grab your Digital Edition now! TAP TO DOWNLOAD Available on the App Store www.goodhousekeeping.co.in/digitalmagazine SPENDING | PRODUCT REVIEWS The Hot Happening & the not so We introduce new products to help you zero in on those that could offer value for money LENOVO IDEAPAD Z510 Lenovo has launched a new notebook in India, the IdeaPad Z510 The a 15.6-inch laptop, with full HD LED display, weighs 2.2 kg It has fourthgeneration Intel Core i5 & i7 processors and Windows 8.1 operating system It has a backlit keyboard with Accutype, Hybrid 1TB SHDD Storage, NVIDIA Graphics card with 8GB NAND flash, OneKey Recovery data back up, and 1MP HD camera It features JBL speakers with Dolby Home Theater certification Rs 52,954 MOTOROLA MOTO X After the successful launch of the Moto G in India, Motorola has now launched the Moto X smartphone Priced at `23,999, the device features a 4.7-inch 720p display It runs Android 4.4 KitKat and is powered by a 1.7GHz dual-core Qualcomm MSM8960Pro Snapdragon processor along with 2GB of RAM It has a 10 MP rear camera and a 2MP front-facing camera The smartphone has 16GB of built-in storage and is available for sale only on Flipkart 96 MJune 2014T ONEY ODAY SAMSUNG GALAXY TAB NEO The new 7-inch tablet from Samsung is the Galaxy Tab Neo The tablet has 600x1024 pixel resolution and runs on Android 4.2 Jelly Bean operating system It is powered by a 1.2GHz dualcore processor and is paired with 1GB of RAM Samsung has added a 2MP rear camera to this tablet It comes with 8GB internal storage, a microSD card slot and a 3600 mAh battery Connectivity options include Bluetooth, Wi-Fi and GPS The tablet measures 193x117x9.7mm and weighs 310gm Rs 16, 750 GOQII LIFE FITNESS TRACKER The GOQii Life is a wearable device that tracks daily fitness activity and has an integrated human factor which uses health data to provide customised advice The device features a touchscreen OLED display and a 360-degree motion sensor It gives back up for four to five days on a single charge While the company is planning to ship the device to India in a couple of months, Snapdeal has listed subscription plans for GOQii products and services, including band, experts and coaching for six and 12 months at `5,999 and `9,999, respectively Rs 5, 999 ONWARD GOOGLE SLASHES DRIVE STORAGE PRICES Cloud storage is the next big thing To lure customers, Google has slashed prices of its cloud service Drive’s monthly storage plan Google offers 15GB of free storage to Google account users Google cut prices of its 100 GB to $1.99 per month from $4.99 and to $9.99 from $49.99 for 1TB storage The 10TB plan now comes with an option of adding more space, starting at $99.99 For 20TB storage, you have to shell out $199.00 a month, while 30 TB is available for $299.99 UNINOR INTERNET OFFERINGS In order to attract subscribers, Uninor has launched a new scheme where users will get unlimited access to Facebook and WhatsApp The scheme is branded as “Sabse Sasta Facebook” and “Sabse Sasta WhatsApp” One day of unlimited WhatsApp usage costs one rupee, one week `5 and one month `15 For Facebook the plans are 50 paise for an hour, one rupee for a day, `5 for a week and `15 for a month Courtesy: Gadgets & Gizmos MONEY TODAY June 2014 97 BANKING Best Loan Buys Are you scouting for a loan to buy a house, a car or for your child’s education? Given below are the best deals on offer from public and private sector lenders Best housing loan rates on offer by banks and housing finance companies Floating rate loans : Tenure - 20 years; Loan Amount - Rs 40 Lakh; Salaried Persons Private Banks PSU Banks HDFC Bank 10.25% State Bank of India 10.15%* ICICI Bank 10.25% Indian Bank 10.20% Axis Bank 10.25% Canara Bank 10.25-10.75% Bank of India 10.20% 10.20% Citibank 10.75% HSBC 10.25% Dena Bank *10.10% for women Fixed rate loans: Tenure - 20 years; Loan Amount - Rs 40 Lakh; Salaried Persons Private Lenders PSU Banks ICICI Bank 10.25% IDBI Bank Citi Bank 10.25% Indian Bank Axis Bank 11.20% 11.75% Dena Bank 10.50-11.00%# 11.75% HDFC 11.00% 12.00%* Syndicate Bank Loan reset clause may vary; The rate is fixed for the entire tenure of the loan Fixed rate not available for smart home and loan against property; Borrowers are advised to seek further details # up to years *Upto 10 years Car loan rates Personal loan rates Rs Education loan rates IDBI Bank 10.25%* HDFC Bank 12.99-20.00% IDBI Bank 11.25% Bank of Baroda 10.50% Dena Bank 13.00-14.00% Canara Bank 11.70% Bank of India 10.65% IDBI Bank 13.25-14.25% State Bank Of India 11.75% Union Bank of India 10.70%* ICICI Bank 13.49-17.50% Dena Bank 11.80% Canara Bank 10.70% Kotak Mahindra Bank 13.50-17.00% Bank Of Baroda 12.00% Tenure: up to years; Amount: Rs lakh, *Fixed rate Amount: up to Rs lakh; Tenure up to years; Tenure: 5-7 years; Amount: above Rs 7.5 lakh Rs Rs Rs Rs Fixed deposit rates year years 9.30% 9.25% 9.25% years 9.05% 9.05% 9.25% 9.05% 9.05% 9.00% 9.10% 9.10% 9.00% 9.00% 9.00% 9.05% Bank Of Bank of Vijaya India Bank Baroda All rates updated till May 14, 2014 98 June 2014 MONEY TODAY IDBI Bank Canara Bank Vijaya Bank South Indian Bank Canara Bank of Bank India IDBI Bank Canara Bank of State Bank India Bank of India Vijaya Syndicate Bank Bank Data provided by Deal4Loans.com Volume 9, Number 6, for the month June 2014, released on May 25, 2014 Total number of pages 100 (including cover pages) India Today brings Voice Subscription on your Mobile Listen to interesting information on Festivals of India on your Airtel Mobile Dial 505242488 Listen to generic preachings “Mann ki Shuddhi Alerts” on Airtel and Reliance Dial 505242484 * Rs per day for festival pack * Re per day for Mann ki Shuddhi ... 06 June 2014 MONEY TODAY On the Web BEST OF MONEY TODAY 24x7 MoneyToday Untangle all aspects of personal finance by going through our stories, tools and interactive features on www.moneytoday .in. .. for investment.” 36 MJune 2014T ONEY ODAY Investors typically chasing returns must bear in mind that these funds will not be in the top quartile of the best performing funds For instance, in the... www.syndicationstoday .in MONEY TODAY June 2014 03 CONTENTS Illustration: PRAGATI MUTUAL GAINS Cover Story 20 The basics of mutual fund investing and how different schemes performed in 2013-14 38