R M D BHUINYA rmdbhuinya@rediffmail.com

Which is the best Systematic Withdrawal Plan (SWP) for retired people?

You can look at investing in short-term debt funds or low-duration funds for your SWP requirements falling within the next three years. Also, invest some surplus in equity hybrid funds for SWP with a long-term horizon to get some appreciation. The percentage allocation to these two categories will depend on your risk appetite.

We suggest you get in touch with a certified financial planner, who is also a Sebi registered mutual fund distributor or a registered investment advisor for more detailed analysis and suggestions.

Suhel Chander, Certified Financial Planner, CM Handholding Financials

Anupam Mitra

Is gratuity taxable on superannuation?

Gratuity is considered as your retirement benefit and is tax exempted subject to certain conditions of the Income Tax Act. For the intent of taxation on gratuity, employees are divided into two categories:

• Government employees
• Private sector employees

When gratuity is received by an employee at the time of superannuation, the tax exemption rules for government employees differ from private ones.

In the case of the former the entire gratuity amount received on retirement or death is exempt from income tax. In the case of private employees, they are divided as:

• Private employees covered under the Payment of Gratuity Act of 1972.
• Private employees not covered under the Payment of Gratuity Act of 1972.

Where private employees are covered under the Payment of Gratuity Act of 1972, any gratuity received is tax exempt to the extent of least of the following:

1. The statutory limit of Rs 20 lakh. (maximum limit notified by the government)

2. Last drawn salary x 15/26 x No. of completed years in service

3. Actual gratuity: If the gratuity exceeds this limit, it is taxable.

For private employees not covered under the Payment of Gratuity Act of 1972, any gratuity received is tax exempt to the extent of least of the following:

1. The statutory limit of Rs 20 lakh

2. Average salary x ½ x No. of years in service

3. Actual gratuity received

Consult a chartered accountant for queries.

Suhel Chander, Certified Financial Planner, CM Handholding Financials

Dr P K Sardar drpksardar@gmail.com

My wife and daughters have an old investment in Birla Power Solution (NSE: BIRYAM). Since the company has delisted, how do we recover our money? Please advise.

It is not mentioned here that the investment done was in equity shares or corporate fixed deposit. If it is equity, it is not tradable and the company may not buy back. Assuming here the investment done was in a corporate fixed deposit of Birla Power Solutions, corporate fixed deposits carry higher risk and are unsecured. However, good interest rates lure many investors. Senior citizens often invest in these FDs and sometimes lose their money. Investors need to be vigilant about corporate fixed deposits and should evaluate their investment decision.

You can recover your money by following the below procedures:

1. File a complaint with the investor’s grievance cell

2. If you don’t get a response from the company's investor’s grievance cell, then file a complaint with the Ministry of Corporate Affairs (MCA). It can be done online

3. You can also file a complaint with the Company Law Board

4. Another option to get a quick response is to put it on social media like the Twitter handle of the company, where it can reach a large number of people and fast track action is taken

Hina Shah, CFPCM, LUHEM Financial Planner and Coach