Queries

Biplov Dev, Kolkata

I am a software engineer working in Bengaluru. My landlord is requesting a security deposit equal to 10 months’ rent. I would like to include certain clauses in the rental agreement to facilitate a hassle-free return of my security deposit when I vacate the property. Please suggest the clauses.

To ensure a hassle-free return of the security deposit in a rent agreement, one must ensure that the security deposit clause is not linked with the lock-in period clause (if any). The rent deed should be drafted in a way that ensures that upon termination notice by either party, the security amount is released not later than the date on which the tenant vacates or hands over the possession of the premises to the landlord. If the landlord cannot pay the security deposit within the timeline mentioned in the contract, the landlord shall be obligated to pay interest at 18 per cent per annum until such default continues. Adjustments from the security deposit amount should be made only for the outstanding rent amount. Any other charges for maintenance, repair etc. should be confirmed with the tenant in writing before adjustment.

Ishmita Walia, Senior Associate, Sarthak  Advocates & Solicitors

S. Kartik, Slem

I am self-employed. I took a unit-linked insurance plan (Ulip) of Rs 1 lakh in 2021 to save on tax. This year, I paid my third annual instalment, but I want to stop it and take term insurance instead. What can I do?

Ulips have a lock-in period of five years. However, there is no compulsion to pay the premium throughout. You can stop paying further premium and take a term insurance plan. Keep insurance and investment separate: At your age, the annual premium of a Rs 1 crore term insurance plan will be about Rs 12,000-15,000, for the entire policy period. For investment, use the remaining amount of around Rs 85,000 in equity mutual funds for the long term, which can provide you with an annual return of 11-12 per cent.

COL. Sanjeev Govila (RETD.), CEO, Hum Fauji Initiatives

Rashmi Singh, Pune

I have a full-time job and save Rs 8,000 a month. I want to save for my financial security. Please suggest how I should go about it.

You should spend your post-tax income in the ratio of 50 per cent for needs, 30 per cent for wants, and 20 per cent for savings. Set your financial goals, such as an emergency fund, retirement, wealth creation, etc., and plan your investments. For an emergency corpus, set aside Rs 2,000 monthly, with a 10 per cent annual increase for five years. You can invest in a bank sweep-in account or liquid mutual funds. For retirement, save Rs 3,000 per month, with a 10 per cent annual increase for 36 years in instruments like National Pension System (NPS), mutual funds, and Public Provident Fund (PPF). Invest Rs 3,000 monthly for wealth creation, with a 10 per cent annual increase for 10 to 40 years in equity, preferably in mutual fund systematic investment plans (SIPs). Note that a 10 per cent annual increase is as per salary increments. You should have at least Rs 1-1.5 lakh for short-term needs, assuming you have already taken care of your health insurance. Term life insurance is for those who have financial dependents.

COL. Sanjeev Govila (RETD.), CEO, Hum Fauji Initiatives