| I have taken a health insurance policy. Shall I be covered if I am abroad and need medical assistance overseas? |
Puneet Mishra, Calcutta |
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| Health insurance policies are generally covered only in India. However, if you are travelling abroad, it is advisable to buy a travel insurance, which also covers health. |
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| Farewell fortune |
| I retired from service two months ago and received my provident fund, gratuity and leave salary. Are these taxable? |
D. K. Saraf, Jamshedpur |
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| While the tax treatment of gratuity and leave salary would depend on whether you are a government employee or not, the amount received from provident fund continues to be tax exempt. Any amount, from your gratuity and leave salary, which is taxable, shall be added to your total income and you can save tax by following the prescribed tax saving investment norms. |
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| Doubts about dividend |
| I have invested in equity shares of some companies and have also inherited some shares from my father. Though many of them declare dividends, there are others that do not announce any dividend. Is it not compulsory for companies to declare dividend? In such a scenario, what should I do? |
Narendra Lahotia, Ranchi |
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| It is not compulsory for any company to declare dividends every year. It is declared at the discretion of a company and is based on various factors such as profitability, availability of surplus funds and capital requirements. However, if you wish, you may sell the shares in the secondary market and reap capital gains. |
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| Reducing balance |
| Now all banks mention that they charge interest on reducing balance? What does this mean? |
Dilip Sur, Howrah |
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| There are two methods of charging interest ? flat rate of interest and reducing balance system. In flat rate, the interest on the total principal amount is calculated over the entire duration of the loan and is divided over a number of instalments. But in the reducing balance, the interest is charged on the outstanding balance of the loan. |
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| If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001. |
