Queries

Bharti Patnaik, Puri

My fiancé and I have individual health policies with different insurers. Should we consider adding one of us to the other’s policy, or are other alternatives available?

You have several options. First, you could pick an entirely new family floater insurance to which both of you port your current policies. Second, you could combine either of the two policies, and third, you may keep the policies separate if both are good.

The primary consideration here is to have good insurance and increasing the sum insured for both of you. That’s why a combined family floater may be the best.

The mechanics of porting depends upon your respective renewal dates. You can discuss this with your insurers to get guidance on the sequencing. Also, a family floater may give benefits you may not currently have, such as maternity benefit in case you plan to have children.

Kapil Mehta, CEO and Co-founder, SecureNow

S. Balaji shetty, Hyderabad

We are three friends, who collectively pay Rs 30,000 as rent for an apartment in Hyderabad. The rent agreement is in the name of one friend. The remaining two friends transfer their shares to his bank account, which he then uses to pay the landlord. Given this, what options are available for me to claim house rent allowance (HRA)?

HRA deduction can only be claimed  in case the expenditure is incurred. To claim it under Section 10(13A), read into Rule 2A of the Income-tax Act, you must have a rent agreement and rent receipts from the landlord.

In your case, the claim seems to be for rent paid on a sub-lease basis—from the landlord to your friend and thereafter to you; this is not allowed under Indian law unless the landlord provides a “no objection certificate” for it and there is a formal agreement between you and your friend for the sub-lease.

In addition, your friend has to issue you rent receipts with his PAN, address, etc. To avoid this exercise, it is suggested that all three friends should have a joint agreement with the landlord going forward.

Vivek Jalan, Partner, Tax Connect Advisory

Irkan Toppo, Ranchi

I started working in 2021. I have mainly invested in fixed deposits (FD). However, I am now exploring investment options with moderate risk. I am willing to invest around Rs 25,000 to Rs 30,000 per month. My financial goals include funds for my wedding in 2-3 years and house purchase in 5-6 years. What investment options would you recommend?

The general thumb rule is to take some risk when investing for five years and more while taking less risk for shorter periods and almost no risk for an investment period of 2 years. Since the wedding is due in 2-3 years and you wish to take only moderate risk, you may continue with FDs.

You may also consider a systematic investment plan (SIP) into a short-term debt fund, conservative hybrid fund or equity savings fund.

Since the time horizon is 5-6 years for the house purchase, you may allocate your monthly investment to SIPs. A portfolio consisting of a large-cap or index fund, a flexi-cap fund, an aggressive hybrid fund and a balanced advantage fund would be adequate. Remember to gradually reduce your equity exposure from about two years before your goal arrives.

Col. Sanjeev Govila (Retd), CEO, Hum Fauji Initiatives