Jagdish Chand, Patiala

Kindly guide if Commutation of pension is beneficial or not on retirement at the age of 60 years.?

Taxability of Commutation of Pension is as follows:

1. A) Government Employees: Wholly exempt.
2. B) Non-Govt. Employees: Where the employee receives gratuity, amount not exceeding the commuted value to the extent of 1/3rd of the pension is exempt.

• In other cases: the commuted value of ½ of pension is exempt.

1. C) Non-Computed pension is fully taxable in the hand of a taxable person (Government + Non-Government employee)

Other than taxation, if you want a lump sum for which you are going to generate higher returns by taking this lump sum and deploying it somewhere else, you should commute your pension.

 CA Abhishek Raja, Founder and Promoter, GST Panacea

Chandra Mohan, Dehradun

Does interest in SCSS come under the exemption of `50,000?

Budget 2018 introduced a new section, 80TTB, under the Income Tax Act, which allows senior citizens to claim tax break on specified interest income up to `50,000 in a financial year. Interest earned on Senior Citizen Savings Scheme is covered under this section.

CA Abhishek Raja,  Founder and Promoter, GST Panacea

Suman Surendran, Chennai

I have been investing in L&T Emerging Businesses Fund via SIP of `6,000 since May 2018. But it is giving negative returns now. So should I switch to HDFC small cap fund? Please guide me.

Past one year has been troublent time in small cap space but this particular fund performance has been particularly bad. Exit from this fund is recommended. HDFC Small Cap is definitely better fund than this. If you have only one SIP in small cap, we would further recommend to split and add some multi-cap fund.

CA Abhishek Raja, Founder and Promoter, GST Panacea

Abhishek Nanda, Bangalore

I am 30 year old working professional based in Bangalore. How are online plans different from the others in the market?

The online term cover offerings allow customers to get insurance at the convenience and privacy of their home. Online term plans are usually offered at a lower premium than their offline counterparts as buying online reduces operational costs and helps the insurers to save on commissions, which can be passed on to the customers in the form of lower premium.

Vineet Arora, MD and CEO, Aegon Life Insurance

Rajarshi Roy, Bengaluru I am 32 year old. Can you please suggest, which are the sectors best to invest? And suggest some companies? I would like to buy some stocks and stay invested for 10-

12 years.

We do not recommend investing in direct stocks. But we would like you to take exposure of some Exchange Traded Funds (ETF’s) like Nifty 50 or BSE Sensex funds or Nifty Next 50 Index Fund. Particularly Nifty Next 50 Index fund would be a great fund for long term.

CA Abhishek Raja, Founder and Promoter, GST Panacea

Prabhu Senthamarai,  I am 35 year old and want to invest `20,000 in SIP for a minimum of 10 years. What is the recommended mutual funds? How many mutual funds can I invest in?

One should not invest in more than four-five funds. Because more funds would reduce your returns and review or managing more funds would also have issues. We would recommend you to add exposure to funds as follows: Mirae Asset Emerging Bluechip Fund (Large and Mid Cap: 20 per cent), Kotak Standard Multi cap and SBI Magnum Multi cap (Multi Cap: 25 per cent each), Kotak Emerging Equity (Mid cap: 15 per cent) and Axis Small Cap (Small Cap: 15 per cent)

CA Abhishek Raja, Founder and Promoter, GST Panacea

Leela, Dehradun

Kindly suggest the best mutual fund basket for long term.

If you are investing in mutual funds for the first time, my recommendation would be to first identify your goals. Define long term for you, ideally long term is five years plus. Then you can invest in equities. Then decide amounts to be invested  and if it is regular or one time. You can start with passive equity funds, like ICICI Pru nifty next 50 fund. You can add a mid cap fund like L&T mid cap fund if your time horizon is seven years above, and you wish to take additional risk. Invest according to your goals and risk profile.

Shweta Jain, certified financial planner and Founder,Investography

Rajesh P,  London, UK

I am an NRI and a UK resident for tax purposes. I had enrolled in a Unit Linked Insurance Plan (ULIP). I have been told that 30per cent tax will be deducted at source automatically on the gains . Also that I might be able to avoid this by using the India-UK DTAA. A. Should I submit Form 10F and Tax Residency Certificate to ICICI Prudential so that they do not apply any tax ? In that case do I need to file an IT return in India ? B. Should I get the money after the deduction has been applied and then use an accountant to claim the tax paid back from IT department in India by filing an IT return in India?

1. You should submit Form 10F and TRC with the company
2. Company will deduct applicable TDS
3. Later file income tax return and claim refund.

CA Abhishek Raja, Founder and Promoter, GST Panacea