Queries

Deepak Solanki, Agra

I started my job as an IT professional last year and, as of now, I don’t have any financial dependents. Most of my major goals (marriage, buying a home) are at least 5-7 years away. I am comfortable with taking risks. Should I consider investing in alternative investments such as cryptocurrency, commodities, global equity, etc., to maximise my returns? What should be my strategy?

In general, alternative investments are not suitable for most investors. Ideally, before investing in alternative investments, you should ensure you have a couple of things in place. First, you should ensure you have sufficient funds kept aside for emergencies. Second, you should have an adequate corpus or be on the path to accumulating enough funds to last three or four decades of retirement. Finally, you should plan for other financial goals like buying a house, taking care of your children’s education, and so on. It is only when all these goals are adequately planned for should an investor consider alternatives. And then, too, they should go with the mindset that these are untested and, therefore, an investor can lose their entire corpus by investing in them.

Rishad Manekia, Founder & MD, Kairos Capital

Debasish Panda, Puri

I started my job this year and have limited savings for tax-deduction investments. I don’t want to invest in instruments with a long lock-in period. What other deductions can I claim to reduce my tax outgo?

You can save taxes through deductions on various components of your salary. If you are salaried, you can claim up to `50,000 as a standard deduction under Section 16(IA) of the Income-tax Act, 1961. Also, if you contribute to a Provident Fund, that contribution will get deducted from your salary for tax under Section 80C, up to `1.5 lakh. You can also claim deductions if you are servicing education or home loans under applicable sections. Besides, if your taxable income is below `5 lakh, you can claim a rebate of up to `12,500 under Section 87A. That said, not all investments have a long-term lock-in for tax-saving purposes; for instance, tax-saving equity-linked savings schemes (ELSS) have a lock-in period of just three years. So, you may consider such instruments, too.

Deepak Jain, Chief Executive, TaxManager.Com

Siddharth Bhaumik, Siliguri

I am joining my first corporate role soon. What should be my expectations in terms of health insurance provided by the employer? Should I buy a separate cover as well?

Employee medical insurance is an integral part of your health insurance portfolio. Generally, employee health insurance plans are simplistic as they cater to a large group in lieu of a tailored, individual policy. Specific features and benefits may also vary with each insurer. Thus, buying a separate personal cover that is specifically suited to your needs is important. Besides, you may change jobs over time. Not all firms will offer adequate health insurance, but if you have your own plan, you do not have to worry. Finally, personal insurance has some vital safeguards not available in group insurance. For instance, personal insurance is renewable for life, and the insurer cannot withdraw your coverage.

Kapil Mehta, Co-Founder, SecureNow