Monday Queries (9th July, 2018)
1. What are the pro and cons of buying mutual funds through a non resident external (NRE) account?
The NRE account allows applicants to invest in only a few mutual funds that comply with the Foreign Exchange Management Act (FEMA) and other regulations concerning repatriation of money applicable to non-resident Indian (NRIs). The NRE account holder should be careful to invest only in compliant mutual funds. A non-compliant mutual fund may be unable to repatriate money at the time of redemption and non-disclosure of identity may lead to violation of rules and subsequent counter action by the Government of India.
2. I work with a public sector company that offers part medical reimbursement facility after superannuation. Can I purchase any mediclaim policy that covers the portion not reimbursed by my employer after superannuation?
VISHNU, New Delhi
Yes. Several general insurance companies provide top-up health/mediclaim insurance at comparatively cheaper rates of premium than a normal policy. A top-up health insurance reimburses medical expenses over and above the agreed limit, i.e. Rs 2 lakh, Rs 3 lakh, Rs 4 lakh, etc. You can purchase a top-up health/mediclaim insurance above the reimbursement limit your employer provides in superannuation.
3. I have done a systematic investment plan (SIP) of Rs 15,000 per month through FundsIndia in the following funds: HDFC Mid-Cap Opportunities Fund-G (Rs 2,000 per month), Kotak Standard Multicap Fund-G (Rs 4,000 per month), Mirae Asset Emerging Bluechip Regular-G (Rs 2,000 per month), SBI Blue Chip Fund Regular-G (Rs 4,000 per month) and Tata Hybrid Equity Fund-G (Rs 3,000 per month). Please advice if I should continue investing in these funds?
ANIRBAN ROY CHOUDHURY, Bangalore
Since you have not mentioned your age, tenure and purpose of SIP investment, we are unable to give you specific fund options. Overall, the funds selection is reasonably good and you should continue for the long term.
4. I have a demat account and trade in shares. This year, I have not gained anything, but I am still required to carry forward last year’s losses. Which form should I use for Income Tax Return?
VISHNU, New Delhi
You should use the ITR 3 form. In 2017, the ITR 4 was renamed as ITR 3. It is preferred that you seek advice from your chartered accountant (CA) or tax consultant prior to filing returns.