Financial gifts to give your loved ones

Financial gifts to give your loved ones

When it comes to offering gifts to our loved ones, we often overlook valuable financial gifts. You do, however, go a long way toward protecting the future of individuals we care about, assisting them in achieving their life goals, and thus constitute a great gift. Your alternatives were restricted ten years ago, but you now have numerous options to express how much you care for your loved ones.

Health-care coverage 

Health insurance is a must-have in today’s world. It lowers personal costs and preserves family savings in the event of a medical emergency. There are additional benefits as well. Your loved ones will be able to meet other crucial responsibilities with ease if you have health insurance.

You can buy a floating family plan or contribute to an individual health plan. Then, at a reduced charge, provide coverage to all members of the family. If you live in a metro with hefty hospital bills, you should purchase a 10 lakh INR health package.

Compare many fonts and select the one that best meets your requirements. You might be eligible to offer an additional plan if your loved one already has health insurance. Once the basic plan’s guarantee has been exhausted, the supplementary plan advantages kick in. Additional health insurance are less expensive than standard health plans and help to expand the buffer network.

Medicare Taxes

Medicare not only saves money on out-of-pocket payments, but it also saves money on taxes. The tax benefits provided by health plans under Section 80D are listed in the table below:

• Premium paid for self, family, and parents (under 60 years old) — INR 25,000, resulting in a deduction of INR 50,000 under Section 80D.

• Premium paid for self, family — INR 25,000, and parents (over 60 years old) — INR 50,000, resulting in a deduction of INR 75,000 under Section 80D.

• Premium paid for self, family (over 60 years) — INR 50,000, and parents (over 60 years) — INR 50,000, with a deduction of INR 1,000,000 under Section 80D.

• For Hindu Undivided Family (HUF) premiums of INR 25,000 for self, INR 25,000 for family, and INR 25,000 for parents, the deduction under Section 80D will be INR 25,000.

• For non-resident individuals, the deduction under Section 80D will be INR 25,000 for self-paid premiums, INR 25,000 for family premiums, and INR 25,000 for parental premiums.

Investing in excellent long-term equities can help you beat inflation and save for important goals like your children’s higher education, marriage multiples, and so on. Providing them used to be a time-consuming effort, but that is no longer the case. You can quickly provide your inventory now that Central Depository Services (India) Limited (CDSL) has introduced electronic delivery instructions slips.

A stock offering is also a smart approach to urge your loved ones to engage in the stock market and build long-term wealth. Many brokerage houses provide this service, allowing you to quickly transfer shares to relatives and friends. With only a few clicks, you may select the shares and number you want to donate and transfer them. If the receiver does not already have a brokerage account, one can be swiftly established before the gift is delivered. The Indian stock market features a number of multi-pocket corporations that can be added to a portfolio to increase value over time. Investing in these stocks has the potential to create exponential wealth.

Taxation of shares

Stocks are taxed throughout the period of their ownership, with long-term capital gains (LTCG) and short-term capital gains (STCG) being the two types of capital gains. STCG has jurisdiction over shares sold within 12 months of purchase, and a flat fee of 15% is paid.

Shares sold after 12 months, on the other hand, fall under the LTCG’s jurisdiction. LTCG is tax-free up to 1 lakh INR, but wins exceeding that amount are taxed at 10%.

Life insurance

Life insurance, as the cornerstone of financial planning, safeguards your loved ones’ financial interests. They also assist in the accumulation of funds for a variety of short- and long-term objectives. You can devise a time-bound strategy to ensure that those close to you are not put in jeopardy if something horrible occurs. Term life insurance products offer high-quality coverage at a reasonable cost.

You could also give a Reserve Plan or a Unit Linked Insurance Plan (ULIP). Donation plans offer advantages at the time of death and maturation. ULIPs, on the other hand, operate as both an investment and an insurance product. A portion of the premiums in ULIPs is used to provide life insurance, while the rest is invested in the capital markets to create profits.

Life insurance investments

Investing in life insurance, like health insurance, can help you save money on taxes. Premiums paid to life insurance plans are tax deductible under Section 80C of the Internal Revenue Code. Under Article 10, the maturity benefit is totally waived (10D).

Gift an online course.

Knowledge is golden armour in its chivalry for long-term wealth generation, as it aids in sensible decision-making and reduces the chance of falling prey to overselling and rash actions. You can enroll your loved one in online financial institution classes to help them comprehend some basics of money and investment. Financial institutions, such as brokerages and wealth management firms, have created a variety of online courses in personal finance and stock market investing to help you grasp many of its features in a simple and understandable manner.

Taking these courses can help your loved ones to enhance financial literacy in the long run, which will assist them to organise their finances and invest to reach their financial goals. 

Mutual Funds

Mutual funds have made a strong presence in the Indian financial market. Institutional and retail investors have increased their participation. Mutual funds provide diversification by allowing investors to invest in a variety of equities from various industries.

SIPs (Systematic Investment Plans) are a safe way to invest in mutual funds since they are based on disciplined saving habits and help to keep investments going through cycles. market epoch Unlike stocks, you can open a SIP for your minor child even if you can’t transfer mutual fund units from your account to another owner.

You can purchase shares in your child’s name and continue to pay until your youngster reaches the age of majority. Once your child is an adult, a fresh KYC must be completed, and your child will be able to benefit from your investments.

Mutual Fund Taxation

Mutual funds are taxed differently depending on the type of fund and how long it has been kept. The LTCG applies to equity funds with a holding term of more than one year. Capital gains are liable to STCG tax if sold within one year of purchase.

Winnings over 1 lakh INR are subject to a 10% LTCG tax. If the fund is sold in the year after the investment, however, STCG tax is imposed at a fixed rate of 15%.

If a debt fund is held for three years or more, LTCG is applied. The LTCG tax is 20% if the property is sold after three years. In the case of a sale within three years, however, the STCG tax is calculated using the current income tax table.

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