Money: Ask Express

You do not need to pay any tax on the gratuity amount that you receive.

I am 45 and a salaried employee with an annual income of Rs 7 lakhs. I have 13 years of service left before I retire. I can save about Rs 2 lakhs per annum. Where should I invest this for next 13 years? Also I do not have sufficient life insurance cover,should I go for term plan ?

Milind Joshi,Ahmednagar

45 is a little late to start retirement planning. But it is better late than never. You could invest abouot 70 per cent of your savings in Mutual Fund schemes and some portion with direct equity. You could also diversify your investments in various other instruments like FMPs,FDs,PPF this you could invest to the tune of 30 per cent. It is better to buy a term insurance plan to cover yourself adequately.

As I understand one can give a gift up to Rs 50,000 under the revised law to spouse and/or to major child/children. The interest/income on the investment of such gift,is to be clubbed up with the donors income. If the receiver credits the amount to his PPF account,will there be any clubbing up of interest received on such PPF account in one hand ? If yes,what will be the effect,since the interest on balance in PPF Account is tax free.

Ulhas Apte,Pune

Interest received will be clubbed with income like you have pointed out. After tax income can be invested in PPF. If receiver invests the interest amount in PPF account,that by itself cannot help in saving tax.

Only life insurance policy premium is deductible or total amount paid premium service tax education cess is deductible under Section 80C ?

Amit Phatak,Pune

The total amount you have paid towards your life insurance is deductible under Section 80C

After taking VRS this year I received payment of gratuity,GPF,and paid leave encashment of 10 months. Is all the payments tax free or do I need to pay tax on it?

Suhas Buddhisagar,Chandigarh

All these payments are tax free for you

I availed a housing loan for the renovation of my house from my employer. As the flat is in the name of my wife she is a co-borrower in this housing loan. The loan is being serviced by me through deductions from my salary.

Can I claim tax exemption on the interest I am paying under Section 24?

D P Negi,Mumbai

You cannot claim tax exemption on this as you are not the owner. Your wife can pay the EMI and can claim the IT benefit.

I have some money lying in my bank account which I do not need for next 12 months. Where should I invest this money so that I get more than normal savings bank account return?

Prosenjit Dutta,Lucknow

You could consider investing in an FMP from Mutual Fund companies which gives a better post tax returns as compared to a bank FD.

Certified Financial Planner Ladder7 Financial Advisories

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