All you wanted to know about Mutual fund ELSS

   There are so many tax saving investment options; how Mutual fund ELSS Schemes stand out from all other options?

   A Mutual Fund ELSS is similar to diversified equity funds. That means the fund manager can invest in shares of various companies across various industries. The difference is ELSS has got the added tax benefit, something a diversified equity fund does not offer.

   ELSS is part of the Section 80C instruments which are cumulatively eligible for a deduction from income up to Rs.1 Lakh. This gives the tax payers benefits from 10 per cent to 30 per cent (excluding the educational cess) based on their current tax slab.

   The other tax saving investments like NSC, PPF will give only 8% return p.a whereas the Mutual Fund ELSS has got the potential to deliver more than 12% return p.a. Also the lock-in period in Mutual Fund ELSS is 3 years and with NSC it is 6 yrs lock-in and with PPF it is 15 years. Among the various tax saving investment option, Mutual fund ELSS has got the least lock-in period.

   Ulips are also one of the tax saving investment options. But now everyone has realized that Ulips has got heavy front loaded charges. Moreover smart investors want to separate their insurance from their investments. They no longer see insurance as an investment; they see insurance as a protection plan. So the smart investors go only for pure term insurance and reject ulips.

  This is how Mutual Fund ELSS stands out of the crowd.

   Before deciding to go for Mutual fund ELSS, here are some points to ponder over. First check your overall portfolio. Does it need more equity exposure? If yes then you can go for ELSS; if no then you can go for PPF or NSC.

   Second thing is to keep in mind, the equity investments are for long term, say 5 years or more. Though the lock-in period in ELSS is 3 years it is better to invest with a time horizon of 5 yrs or more.

   Also investors need to keep in mind, SIP is the best form of investing in mutual funds and ELSS is not an exception. So doing an SIP in ELSS is a good strategy to be followed.

   The poor performing ELSS has given around 10% annualized return in the last 5 years whereas the best performing ELSS has delivered around 25% annualized return in the last 5 years. So investors need to be careful in choosing the right ELSS scheme. Past performance, risk adjusted return, consistency are a few parameters to be evaluated in selecting a best performing ELSS scheme. Investors also can approach financial advisors for selecting the right scheme.

   There are two groups of ELSS investors. Majority of investors belong to the first group. They will wake up late to these tax saving investments. For salaried individuals, it is typical that they will be informed by their accounts department somewhere around end of January to provide proof of tax saving investment immediately or else extra tax will be deducted from their February salary. At the neck of the moment, the choice ends up being guided by convenience alone. They tend to think about tax first and investments later. As long as something saves tax, its real benefits and features as an investment are paid less attention to. That means the investments will be chosen more for convenience than for suitability.

   There is another group of investors. Though this group is a very small group, it is a very smart group. They will not rush for tax saving scheme at the last minute. They will plan in advance. That means they will have more time to choose the right product. They will save tax as well as choose a good investment option. They will also check whether this particular tax saving scheme will suit their overall portfolio or not; will this tax saving investment is going to fit into their comprehensive financial plan. That means they will consciously choose an investment which saves tax as well as helps them in achieving their financial goals like children’s higher education, buying a house, retirement plans.

   So…now just check up which group you are in.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.

Eight simple way to plan your Tax

   Eight Simple Ways to Plan your Taxes. You have got only a few more months to complete this financial year. Very soon you will get a call from your company to submit the proofs for tax saving investments. So why don’t you spend some time on organising your tax plan?

   1) Proper Allocation of Annual compensation

   Restructuring your salary with some additional components can reduce your tax liability. This restructuring doesn’t require any additional cash outflow. The following components can be efficiently used to reduce your income tax liability.

    Transport allowance to the extend of Rs.800 is exempt

    Medical expenses which are reimbursed by the employer are exempt to the tune of Rs.15000

    Food coupons like sodexo or ticket restaurant are exempt from tax up to Rs.5000

    Individuals who are all living in a rented accommodation can include House Rent Allowance ( HRA ) as a part of their salary

    Leave Travel Allowance (LTA) can be part of your salary as this can be claimed twice in a block of 4 years.

2) Effective Utilization of Tax Exemption

   As far as possible utilize the maximum exemptions available under section 80 C, 80 CCF and 80 D. The maximum exemption available under section 80 C is Rs. 100000.

   Under this section Rs.100000 investment or contribution can be made in PPF, NSC, Life insurance premium, 5 year FD with banks and Post offices, Mutual Fund ELSS, Principal Repayment of housing loan, and the tuition fees paid for children’s education.

   Under Section 80 CCF, you can invest up to Rs.20000 in infrastructure bonds.

   Under Sec 80 D, the premium paid towards the mediclaim policies are exempt. The maximum limit of exemption is Rs.15000 and for senior citizens the limit is Rs.20000 and for covering senior citizen parents there is an additional exemption to the extend of Rs.15000.

3) Properly Structure your Housing Loan

   The Principal repayment of a housing loan is eligible for a deduction up to Rs.100000 u/s 80C. The interest paid on a housing loan is eligible for a deduction up to Rs.150000 u/s 24B. If the housing loan is for a sizeable amount, then it is possible that the principal repayment and interest may exceed the specified tax exemption limit. To utilise the maximum tax benefit, an individual can consider going for a joint home loan with his/her spouse or parent or sibling. This will make sure that both the co-owners can claim tax deductions in the proportion of their holding in the loan.

4) Tax Plan in Sync with Overall Financial Plan

   You should not do your tax plan in isolation. You need to do it in sync with your overall financial plan. So a tax plan is not only to just save taxes and also it should assist you in achieving your other financial goals like children’s higher education, buying a home or retirement.

5) Avoid Last Minute Rush

   In fact the right time to do the tax plan is the beginning of the financial year. If you postpone your tax planning even now and do it in the last minute, then you will not be able to choose the right investment. In the last minute rush, you will be forced to choose a scheme which gives the proof immediately. Is the investment sound and profitable? Is there any other better options? You will not be able to choose the best scheme and you may settle with a mediocre one.

6) Invest Some Quality Time

  Before investing your money, you need to invest your time. You need to take some quality time to understand the various tax saving options and compare their benefits and limitations.

7) Check for Future Commitments

   Some tax saving options like NSC or ELSS need only onetime investment. Some other tax saving options like PPF, Ulips need periodical investments year after year. You need to be careful in choosing a tax saving scheme where you need to commit for periodical future payments. You need to check on a few things like; do you need such a future commitment? Will you be able to meet the future commitments at ease? The law may change and you may not get any tax exemption for your future payments. Would you consider the scheme irrespective of tax benefit for the future payments?

8) Changed Your Job; Redo your Tax Plan

   Did you switch your job in the middle of the financial year? Then you need to redo your tax plan with consolidating the income from both the companies. It is advisable to inform the new company about the income during the particular financial year from the old company. So that your new company will deduct the right amount of TDS. Otherwise you may need to pay extra tax at the end of the financial year.

   Whenever you change your job, you need to have a sitting with your financial planner or tax advisor. So that the required changes in your tax plan can be done proactively.

   With proper tax planning you can reduce your tax liability; save more; invest better and become wealthier.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (http://www.holisticinvestment.in/mutualfund-sip ) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.

Recognition of Sumananjali Nursing Home, Aurangabad (Maharashtra) for treatment of Central Government employees under CS(MA) Rules,1944.

No. S. 14021/4/2008-MS
Government of India
Ministry of Health & Family Welfare

Nirman Bhavan, New Delhi
Dated 7th March, 2012.

OFFICE MEMORANDUM

Subject:- Recognition of Sumananjali Nursing Home, Aurangabad (Maharashtra) for treatment of Central Government employees under CS(MA) Rules,1944.

   The undersigned is directed to say that a number of representations have been received in the Ministry of Health & Family Welfare for renewal of recognition of Sumananjali Nursing Home, Aurangabad (Maharashtra) for treatment of Central Government Employees and their family members under CS(MA) Rules, 1944.

   2. In view of the hardships faced by CS(MA) beneficiaries for their own treatment and the treatment of their family members at Aurangabad (Maharashtra), the matter has been examined in the Ministry and it has been decided to empanel Sumananjali Nursing Home, Aurangabad (Maharashtra) under Central Services (Medical Attendance) Rules, 1944.

   3. The Schedule of charges for the treatment of Central Government Employees and the member of their family under the CS(MA) Rules, 1944, will be the rates fixed for CGHS, Pune. The approved rates are available on the website of CGHS (www.mohfw.nic.in//cghs.html) and may be downloaded/printed.

4. The undersigned is further directed to clarify as under:-

   (a) “Package Rate” shall mean and include lump sum cost of in-patient treatment//day care/diagnostic procedure for which a CS(MA) beneficiary has been permitted by the competent authority or for treatment under emergency from the time of admission to the time of discharge, including (but not limited to)-(i) Registration charges, (ii) Admission charges, (iii) Accommodation charges including patient’s diet, (iv) Operation charges, (v) Injection charges, (vi) Dressing charges, (vii) Doctor/consultant visit charges, (viii) ICU/ICCU charges, (ix) Monitoring charges, (x) Transfusion charges, (xi) Anesthesia charges, (xii) Operation theatre charges, (xiii) Procedural charges / Surgeon’s fee, (xiv) Cost of surgical disposables and all sundries used during hospitalization, (xv) Cost of medicines, (xvi) Related routine and essential investigations, (xvii) Physiotherapy charges etc, (xviii) Nursing care and charges for its services.

   (b) Cost of Implants is reimbursable in addition to package rates as per CGHS ceiling rates for implants or as per actual, in case there is no CGHS prescribed ceiling rates.

   (c) Treatment charges for new born baby are separately reimbursable in addition to delivery charges for mother.

   (d) Hospitals empanelled under CS(MA) Rules, 1944 shall not charge more than the package rates.

   (e) Expenses on toiletries, cosmetics, telephone bills etc. are not reimbursable and are not included in package rates.

5. Package rates envisage duration of indoor treatment as follows:

Upto 12 days	for Specialized (Super Specialities) treatment
Upto 7 days	for other Major Surgeries
Upto 3 days	for Laparoscopic surgeries/normal Deliveries
1 day	for day care/Minor (OPD) surgeries

    No additional charge on account of extended period of stay shall be allowed if that extension is due to infection on the consequences of surgical procedure or due to any improper procedure and is not justified.

   In case, there are no CGHS prescribed rates for any test/procedure, then AIIMS rates are applicable. If there are no AIIMS rates, then reimbursement is to be arrived at by calculating admissible amount item-wise(e.g. room rent, investigations, cost of medicines, procedure charges etc) as per approved rates/actual, in case of investigations.

   6. (a) CS(MA) beneficiaries are entitled to facilities of private, semi-private or general ward depending on their basic pay. The entitlement is as follows:-

Sl.No.	Pay drawn in pay band	Ward Entitlement
1.	Upto Rs. 13,950/-	General Ward
2.	Rs. 13,960/-to 19,530/-	Semi-Private Ward
3.	Rs.19,540/- and above	Private Ward

   (b) The package rates given in rate list are for semi-private ward.

   (c) The package rates prescribed are for semi-private ward. If the beneficiary is entitled for general ward there will be a decrease of 10% in the rates; for private ward entitlement there will be an increase of 15%. However, the rates shall be same for investigation irrespective of entitlement, whether the patient is admitted or not and the test, per-se, does not require admission.

   7. The hospital shall charge from the beneficiary as per the CGHS prescribed rates or its own rate list whichever is lower.

   8. (a) The maximum room rent admissible for different categories would be:

General ward	Rs. 1000/-per day
Semi-private ward	Rs. 2000/- per day
Private ward	Rs. 3000/- per day
Day care (6 to 8 Hrs.)	Rs. 500/- (same for all categories)

   (b) Room rent mentioned above at (a) above is applicable only for treatment procedures for which there is no CGHS prescribed package rate.

   Room rent will include charges for occupation of bed, diet for the patient, charges for water and electricity, linen charges, nursing charges and routine up keeping.

   (c) During the treatment in ICCU/ICU, no separate room rent will be admissible.

   (d) Private ward is defined as a hospital room where single patient is accommodated and which has an attached toilet (lavatory and bath). The room should have furnishings like wardrobe, dressing table, bed-side table, sofa set, etc. as well as a bed for attendant. The room has to be air-conditioned.

   (e) Semi Private ward is defined as a hospital room where two to three patients are accommodated and which has attached toilet facilities and necessary furnishings.

   (f) General ward is defined as halls that accommodate four to ten patients.

   (g) Normally the treatment in higher category of accommodation than the entitled category is not permissible. However, in case of an emergency when the entitled category accommodation is not available, admission in the immediate higher category may be allowed till the entitled category accommodation becomes available. However, if a particular hospital does not have the ward as per entitlement of beneficiary, then the hospital can only bill as per entitlement of the beneficiary even though the treatment was given in higher type of ward.

   If, on the request of the beneficiary, treatment is provided in a higher category of ward, then the expenditure over and above entitlement will have to be borne by the beneficiary.

   9. In case of non-emergencies, the beneficiary shall have the option of availing specific treatment/investigation from any of the recognised hospitals of his/her choice (provided the hospital is recognised for that treatment procedure/test), after the specific treatment/investigation has been advised by Authorised Medical Attendant and on production of valid ID card and permission letter from his/her concerned Ministry/Department.

   10. The hospital shall honour permission letter issued by competent authority and provide treatment/investigation facilities as specified in the permission letter.

    11. The hospital shall also provide treatment/investigation facilities to the Pensioner CGHS beneficiaries and their dependent and eligible family members at their own rates or rates approved under CS(MA) Rules, whichever is lower. The hospital shall provide treatment to such pensioner CGHS beneficiaries after authentication through verification of valid CGHS Cards.

   12. However, pensioner CGHS beneficiaries would make payment for the medical treatment at approved rates as mentioned above and submit the medical reimbursement claim to the Addl. Director, CGHS through the CMO i/c of the CGHS Wellness Centre, where the CGHS Card of the beneficiary is registered.

   13. lncase of emergencies, the beneficiary shall have the option of availing specific treatment/investigation from any of the recognised hospital of his/her choice (provided the hospital is recognised for that treatment procedure/test), on production of valid ID card, issued by competent authority.

   14. During the in-patient treatment of the CS(MA) beneficiary, the Hospital will not ask the beneficiary or his attendant to purchase separately the medicines/sundries/equipment or accessories from outside and will provide the treatment within the package rate, fixed by the CGHS which includes the cost of all the items.

   15. If one or more minor procedures form part of a major treatment procedure, then package charges would be permissible for major procedure and only 50% of charges for minor procedure.

   16. Any legal liability arising out of such services shall be the sole responsibility and shall be dealt with by the concerned empanelled hospital. Services will be provided by the Hospital as per the terms given above.

   17. Ministry of Health & Family Welfare reserves the right to withdraw/cancel the above recognition without assigning any reason.

   18. The order takes effect from the date of issue of the O.M.

   19. The authorities of Sumananjali Nursing Home, Aurangabad (Maharashtra) will have to enter into an agreement with the Government of India to the effect that the Hospital will charge from the Central Government employees at the rates fixed by the Government and they will have to sign a Memorandum of Understanding (MOU) (2 copies enclosed only for Hospital) within a period of 3 months from the date of issue of the above mentioned OM failing which the Hospital will be derecognized. Subject to above, the Hospital can start treating Central Government employees covered under CS(MA) Rules, 1944.

   20. This issues with the concurrence of the Finance Division vide their Dy.No.5424 dated 28.02.2012.

sd/-
(Sanjay Pant)
Under Secretary to the government of India

Source:http://mohfw.nic.in/showfile.php?lid=1015