Ask Mint | On Investments

Ask Mint | On Investments
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First Published: Sun, Feb 22 2009. 11 35 PM IST
Updated: Sun, Feb 22 2009. 11 35 PM IST
I invested Rs30,000 in a unit-linked insurance plan (Ulip) whose current fund value is just Rs16,000. I am required to invest a similar amount for at least three years. My investment horizon is only three-five years. Considering that my total investment is currently in an equity fund, and there is no possibility of reversal of the equity meltdown to an appreciable extent in the short term, should I continue investing in this Ulip?
—O.P. Gupta
If you have made this investment primarily for insurance, you should continue with it. But if the objective was some kind of an investment, then I would say you should work out other options, including changing your plan to debt-based schemes or even discontinuation depending on the conditions attached to such step. Generally speaking, it would be better to change your plan to debt-based schemes and continue with it for now.
Is it possible to invest in bonds for saving taxes? Can you give more details about the kinds of bonds, the amount of tax which can be saved?
— Srini
There are tax-saving bonds that offer tax exemptions up to a specified amount of investment. For example, infrastructure bonds under section 80C of the Income-tax Act, 1961, or Nabard/NHAI/REC bonds under section 54EC. Relief under section 54EC is for capital gains, while exemption under section 80C is for tax saving. The maximum sum that would be considered for tax saving purpose under this section is Rs1 lakh.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on information provided here.
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First Published: Sun, Feb 22 2009. 11 35 PM IST
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