Queries
Ravi, Hyderabad
I have existing pure term
insurance policies with a
sum assured of `2.55 crore.
My annual income is
`12 lakh. I wanted to take
an additional `1 crore cover.
My banker advised me not
to mention the details of
my existing policies, which
I accepted and signed the
application. Will that be
a breach and cause any
problems during claims?
It appears you have sufficiently high
cover at present compared to your
earnings. However, disclosure of
existing policy is a must while taking
fresh cover to avoid problems. It
is your responsibility to reveal all
the necessary information to the
insurance company. If you hide
any significant facts, your claim
may get rejected. There is a policy
declaration rule wherein you are
required to disclose existing policies.
It is better to be safe than sorry.
inflation in the long run.
You could invest in IDFC Focussed
Equity Fund and Birla Frontline
Equity Fund in large-caps, Mirae
Asset India Opportunities Fund
Motilal Multicap 35 Fund and
IDFC Classic Equity in the multicap
category, and Mirae Asset Bluechip
Fund, SBI Mid Cap and IDFC
Sterling Equity in mid-cap category.
Dilshad Billimoria, CFP,
Dilzer Consultants
Sanjeev Dawar, Pune
Is it advisable to book long-
term capital gains (LTCG)
on equity shares, followed
by a repurchase? Will it be
favourable keeping in
view tax implications and
cash flow?
Booking profits and rebalancing of
one’s portfolio should be considered
as part of the overall allocation of
your portfolio. If the purpose of
booking profits is only because
markets have reached these highs,
then it’s best to rebalance—book
some profits and move to fixed
income and let the balance grow.
If it is because tax laws may
change in the upcoming budget,
Jyoti, Muzaffarpur
AK Narayan, Founder,
A.K. Narayan Associates
Sanjeev kumar
I am 39 years old and my
objective is to invest for 10
years for the education of
my son. I want to invest `2
lakh as lumpsum amount
and `20,000 every month.
Please suggest a few funds
to diversify my portfolio.
Should I go for large, mid or
small-cap funds?
Please note what kind of education
you would like to seek for your
son, domestic or international.
The costs vary drastically in both
options and planning should be
done accordingly. Since the goal is
10 years away, I would recommend
your investment in a combination
of large-cap, multi-cap and mid-cap
equity funds, both for the lump-sum
and monthly investment. Mutual
funds and select bluechip stocks will
help the portfolio grow well and beat
14
I got land (with a house) as a gift from my father in
January 2007. Now I want to sell it. Does indexation
theory apply on gifted property? What will be my
capital gains liability? By when do I have to pay all
my capital taxes?
The capital gains arise when property is sold. In your
case, property will be considered as a long-term gain
since you have inherited an existing property during
2007. Any profit realised after two years of purchase will
attract long-term capital gains taxes. This is despite the
fact that you have not incurred any cost for acquiring
the property. For the purpose of capital gains, cost of
the previous owner should be indexed, considering his
date of purchase. Indexation benefit is also available for
inherited property. Taxes have to be paid before filing
your returns.
Outlook Money February 2018 www.outlookmoney.com
A. K. Narayan, Founder, A.K. Narayan Associates