No more Indexation benefits for pure Debt mutual funds

In a major change in the finance bill 2023, the govt has brought some changes in mutual fund taxation which will now treat pure debt mutual funds on par with Fixed Deposits. Most of the investors were not very happy with this sudden change, how this change is now a reality and we have to accept it.

As per the new rule, any mutual fund where not more than 35 per cent of its total proceeds is invested in equity shares of the domestic companies will be termed as “Specified Mutual Fund” and it will be taxed at the marginal rate (as per your slab).

However, the gains from these specified mutual funds will still fall under “short term capital gain” category and not as “interest” income, which still leaves debt funds with some advantages which I will share at the end of this article.

Rule applicable from Apr 1, 2023

This change is applicable only for the new investments which will be made after 1st April, 2023. No impact is there for any old investments.

So if you have any debt fund, you can still hold it for future and you will be eligible to get the indexation benefit. Infact, its suggested that you hold it for long term because the taxation will be only 20% with indexation benefit which makes it a very attractive investments.

Also note that we still have the indexation benefit for those funds where the equity exposure lies between 35% and 65%.

Here is a small chart which will give you a clear understanding of the bifurcation on taxation.

Changes in debt fund taxation by Govt to remove Long Term capital gains benefit

Which category of funds are Impacted?

If you look at the definition, here is the list of categories which will now not be getting the indexation benefit

  • Liquid Fund
  • Conservative Hybrid Mutual Fund
  • International Fund of Funds
  • Dynamic Asset Allocation Funds

The fund of funds which invest internationally will also be impacted as they are still treated as debt funds when it comes to taxation because they don’t invest in “domestic equity”. Their portfolio has equity, but its not domestic, and hence they don’t quality as equity funds.

Why Govt made this change?

As per govt, one rational given was that debt funds have a very strong indicative returns and there is almost no credit risk, so they are very much having predictive return and they shall be treated at part with a fixed deposit and not get preferential treatment.

This a bit odd, because debt funds still carry interest rate risk and default risk still exists no matter how small it is. A person investing in debt fund is investing in a market link product and shall get some extra benefit, however govt has other views.

What does this change mean to retail investors?

Truly speaking, this change will mostly impact those investors who are heavily dependent on debt funds for their long term investments and those who were looking for a very safe investment option with low risk and high tax advantage.

Any ways most of the investors were using debt funds for short term and money would get redeemed in 2-3 yrs, for which it was always a marginal rate earliar also.

So right now do not take action in hurry. Anyways the old investments are not impacted due to this rule.

3 advantages of pure debt funds going forward

While the taxation advantages of debt fund has gone, still it has several benefits worth considering as gains from them still is considered as a “Capital Gain” are as follows

  • Tax only on Withdrawal, not on accrual – You can postpone taxation in future when you withdraw unlike a FD
  • Setoff of gains with losses – You can adjust the capital gains if any with the capital gains which you incur now or later asyou can carry forward the losses for next 8 yrs in your ITR
  • Liquidity – You can withdraw anytime from a debt fund without penalty (after the initial 1-3 months) and not pay any penalty like you do in a fixed deposit

We hope it explains what changes have taken place recently. Incase you have any doubts, do write us below, so that we can answer any of your queries.

10 major changes for salaried person in Budget 2023

Today we will be highlighting the important points from the budget 2023 that would be most relevant for the salaried people.

1. There is no change in the old tax regime.

So first thing to know is that the old tax slabs remain unchanged. The slabs are same like last year which are as follows

Old Tax Regime Slabs

2. New tax regime tax slabs made more attractive

The taxation slabs got better in the new tax regime, which are as follows. The taxation got better for middle class and all the people who will choose new tax slabs will pay lower tax. Here are the new and previous slabs

New tax regime slabs

3. Standard Deduction of Rs 50,000 in New Tax Regime

Earliar, the standard deduction of 50,000 was available only for the old tax slab, but in this budget its also extended to the new tax regime. Which means that one can directly reduce their income by 50,000 before finding the taxable salary.

4. No Tax up to Rs 7 lacs income under new tax regime

Its time to cheer up, as one will not be paying any income tax if the taxable salary is upto 7 lacs. This simply means that a person earning upto 7.5 lacs will not pay income tax because there will be standard deduction of 50,000 now which will make sure you come under that 7 lacs limit. here is an example where we show Tax calculation

Based on the information above, when does it make sense to choose between new and old regime?

When to choose New Tax Regime?

  • Income is less than 7.5 lacs
  • Your Total deductions are less than 2-2.5 lacs (if you claim just 1.5 lacs in 80C and 50k to 1 lac in other things)

When to choose old tax regime?

  • Your exemptions and deductions are very high like 4-5 lacs ( when you claim full 80C, 80D, HRA, LTA and home loan interest)

Old Tax Regime will most likely get killed !

Govt has made its mind and aiming to move towards the simple tax structure with minimal compliances. In future there will be no 80C , HRA, 80D , home loan interests or any kind of deductions. Slowly New Tax Regime will be made attractive and old tax regime will be abolished.

5.  Senior Citizen Saving Scheme Limit raised to 30 lacs.

The senior citizens will feel extremely happy after this amendment as the limit in Senior Citizen Saving Scheme has now increased to 30 lacs which was earlier 15 lacs. The current interest rate is 8% for the Jan-March 2023 quarter

6. Post office MIS limit raised

This clearly shows a glimpse that this budget was in favor of the salaried class. National Savings Monthly Income Account the previous limits have increased.

MIS Limits


7. Leave Encashment is tax free upto 25 Lacs.

Now one will not have to pay any income tax when they get the leave encashment amount upto Rs 25 lacs at the time of retirement or leaving their job. This amount was set at Rs 3 lacs till date which was set long back and was very low. So if one gets 40 lacs as leave encashment, then there wont be any tax upto Rs 25 lacs and rest 15 lacs will be taxable.

8. 20% TCS on foreign remittances under LRS scheme

Taking a foreign tour package or investing abroad will increase one cashflow, as there is a 20% TCS rate now. which means that you have to pay an extra 20% money which will be deposited as advance tax from your side to govt when you make any high amount transactions which sends money to foreign. This is applicable only when the amount is  more than 7 lacs.

Below were the slabs ..

TCS Chart

Note that this TCS amount is not the TAX, but advance tax, which means that at the end of the year you can adjust it with your total tax payable or claim it back by filing a refund in your ITR.

9. Traditional Life Insurance policies maturity amount is taxable if the premium is more than 5 lakhs

All life insurance policies proceeds as income/maturity will be now be taxable if aggregate premium paid per year by the person is more than 5 lacs. Aggregate premium means total of the premium paid in a year by the person in his name from all kind of insurance policies

  • This rule is applicable only for all policies issued after 1st Apr 2023. All past policies does not get impacted
  • This rule does not apply for death benefit (if someone dies and family gets the money, then its tax-free
  • This rule also does not apply for ULIPS


10. Capital Gains exemption on investing in other property is capped at 10 cr

Till now there was no limit on the capital gains exemption under sec 54 and 54F, which means that you could buy another property with all the capital gains and just not pay any tax. But now you can only do this till 10 cr.

This is anyways going to impact only super HNI who deal in properties worth multi crores.

Let us know if you have any query on budget 2023. We hope you got a fair idea on all the changes made.

New Bank locker Rules by RBI (100 times the locker rent as penality)

RBI has recently issued some new guidelines for bank lockers which are consumer-friendly to some extent and will come into effect from 1st Jan 2022.

RBI went through lots of customer grievances and feedback from banks too and finally came up with some new guidelines. Let’s look at some of the most important points which really impact you!

New Bank Lockers rules by RBI which will get implemented from Jan 1,2022

1. Compensation of 100 times the locker rent

If there is any loss of lockers content due to bank negligence or irresponsible behaviour, then bank locker holders will get 100 times of locker rent as compensation. So if the yearly rent of the locker is Rs 4,000, then the compensation will be Rs 4 lacs

Here is what point 7.2 of RBI notification says

It is the responsibility of banks to take all steps for the safety and security of the premises in which the safe deposit vaults are housed. It has the responsibility to ensure that incidents like fire, theft/ burglary/ robbery, dacoity, building collapse do not occur in the bank’s premises due to its own shortcomings, negligence and by any act of omission/commission.

As banks cannot claim that they bear no liability towards their customers for loss of contents of the locker, in instances where the loss of contents of the locker are due to incidents mentioned above or attributable to fraud committed by its employee(s), the banks’ liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker.

2. SMS and Email alerts at the time of locker access

Now you will get email and SMS notifications on the same day when the locker is accessed. This will help if there is any kind of fraud or unauthorised access (like someone from your family opens the locker without telling you)

Here is what point 4.1.3 of the notification says 

Banks shall send an email and SMS alert to the registered email ID and mobile number of the customer before the end of the day as a positive confirmation intimating the date and time of the locker operation and the redressal mechanism available in case of unauthorized locker access.

3. Last 180 days of CCTV footage are required for locker operation

Banks will have to install CCTV to monitor the common areas and doors from where entry and exits happen inside the locker room. This CCTV footage has to be stored for the last 180 days.

Here is what point 2.1.2 of the notification says 

The area housing the lockers should remain adequately guarded at all times. The banks shall install Access Control System, if required as per their risk assessment, which would restrict any unauthorized entry and create digital record of access to locker room with time log. As per their internal security policy, banks may cover the entry and exit of the strong room and the common areas of operation under CCTV camera and preserve its recording for a period of not less than 180 days.

In case any customer has complained to the bank that his/her locker is opened without his/her knowledge and authority, or any theft or security breach is noticed/observed, the bank shall preserve the CCTV recording till the police investigation is completed and the dispute is settled.

4. Banks are allowed to charge 3 yrs of rent as term deposits

Banks are allowed to charge up to 3 yrs of rent + charges of breaking the locker from customers. So they may ask you to create an FD, but this has to be of a small amount, not any exorbitant fees like what happens on ground level. This is just to make sure that banks are protected for a situation where the locker holder does not pay rent on time or is unreachable for some years.

So if locker rent is Rs 4,000, the FD – they can ask you shall be for Rs 12,000 + some more charges like Rs 500-1000. So in total, it shall surely not cross 4 times the rent in any situation.

If the bank official asks you to create an FD for 2-3 lacs or forces you to buy any kind of insurance policy, then please tell them you are aware of rules and you will complain to RBI on this.

Here is what point 2.2.1 of the notification says

Banks may face potential situations where the locker-hirer neither operates the locker nor pays the rent. To ensure prompt payment of locker rent, banks are allowed to obtain a Term Deposit, at the time of allotment, which would cover three years’ rent and the charges for breaking open the locker in case of such eventuality.

Banks, however, shall not insist on such Term Deposits from the existing locker holders or those who have satisfactory operative account. The packaging of allotment of locker facility with placement of term deposits beyond what is specifically permitted above will be considered as a restrictive practice.

Another small point is that if locker rent is collected in advance, in the event of the surrender of a locker by a customer, the proportionate amount of advance rent collected shall be refunded to the customer.

5. Waitlist numbers & Vacant Locker list to be displayed

Now each locker application has to be duly acknowledged and a waitlist number has to be given to the customer. That waitlist number has to also get displayed in banks along with the number of vacant lockers. This is to ensure transparency. Right now the things are very opaque and customers don’t get enough information and clarity about their locker applications

Here is what point 2 of the notification says

In order to facilitate customers making informed choices, banks shall maintain a branch-wise list of vacant lockers as well as a wait-list in Core Banking System (CBS) or any other computerized system compliant with Cyber Security Framework issued by RBI, for the purpose of allotment of lockers and ensure transparency in allotment of lockers.

The banks shall acknowledge the receipt of all applications for allotment of the locker and provide a waitlist number to the customers if the lockers are not available for allotment.

6. New Agreement by Jan 1, 2023, for existing locker holders

A new locker agreement has to be signed with all existing locker holders with all these new guidelines and rules. A draft copy will be framed by IBA (Indian Banking Association). So if you already have a locker, do wait for the bank to reach out to you in 1-2 yrs to sign a new contract.

Here is what point 2.1.1 of the notification says

Banks shall have a Board approved agreement for safe deposit lockers. For this purpose, banks may adopt the model locker agreement to be framed by IBA. This agreement shall be in conformity with these revised instructions and the directions of the Hon’ble Supreme Court in this regard.

Banks shall ensure that any unfair terms or conditions are not incorporated in their locker agreements. Further, the terms of the contract shall not be more onerous than required in ordinary course of business to safeguard the interests of the bank. Banks shall renew their locker agreements with existing locker customers by January 1, 2023.

Here is what point 2.1.2 of the notification says

At the time of allotment of the locker to a customer, the bank shall enter into an agreement with the customer to whom the locker facility is provided, on a paper duly stamped. A copy of the locker agreement in duplicate signed by both the parties shall be furnished to the locker-hirer to know his/her rights and responsibilities.

Original Agreement shall be retained with the bank’s branch where the locker is situated.

7. Closure and Discharge of locker items

The notification lists down 3 situations when a locker can be opened by the bank.

Here is what point 6 of the notification says

This part refers to the breaking open of the locker in a manner other than through the normal access by the customer using her/his original key or password under any one of the following circumstances:

  1. If the hirer loses the key and requests for breaking open the locker at her /his cost; or
  2. If the Government enforcement agencies have approached the bank with orders from the Court or appropriate competent authority to seize lockers and requested for access to the lockers; or
  3. If the bank is of the view that there is a need to take back the locker as the locker hirer is not cooperating or not complying with the terms and conditions of the agreement.

Banks shall have a clear Board approved policy together with a Standard Operating Procedure (SOP) for breaking open the lockers for all possible situations keeping in view the relevant legal and contractual provisions.

Apart from the points above, there are many minor things which are all listed in the notification which can be downloaded below

Download the RBI Guidelines PDF here

Please share your views about this notification and guidelines set by the RBI in the comments section.



Rs 98,779 crore lying unclaimed in various accounts in India

Do you know that there is a possibility that your grandparents or someone else in the family might have some bank account or some policy that you are not aware of till today and the money is lying unclaimed for decades?

Yes, that can happen!!

Can you believe that a whopping Rs 98,779 crore is lying in various investment products in India like banks, EPF, PPF, Mutual funds, LIC, and many other entities!!

In the last 18 months, so many people lost their lives and their families had no idea of the investments made by them, or if they had any life insurance policy or not. A lot of them still don’t know and will never come to know probably.

What happens to that money? How will family members get access to them? How will they claim it?

They WON’T!

Here is the breakup of how much money is lying unclaimed at various places in India, have a look!

How much money is lying unclaimed in banks, LIC, EPF, PPF, Mutual Funds etc. in India

Let’s talk about these

Rs 24,356 in Banks

As per the RBI report, Rs 24356 crore is lying unclaimed in around 8.1 crore bank accounts as of December 31, 2020. This turns out to be close to Rs 3,000 on an average per bank account. The biggest share in this unclaimed money is in SBI bank and then other private sector banks.

Rs 26,497 crores in EPF

This is the amount of money lying unclaimed in EPF accounts across the country. Some of this money may be of those people, who have not withdrawn the money after changing or leaving jobs, but a bigger chunk is lying there for years and years and many of them may never be claimed as the families are not aware of these investments

Rs 17,880 crores in Mutual Funds

A big chunk of money is also lying in inactive folios which is close to Rs 17,880 crores. A lot of investors have invested in mutual funds in physical format decades back and many family members may not be aware of these investments after their demise. This unclaimed amount is close to a little less than 1% of the entire AUM of mutual funds.

Rs 24,586 crore with Insurance Companies

LIC alone had close to 10,509 crores lying unclaimed with them as of Mar 31, 2018, and another 4,657 crore was with private insurance companies. The current figures as per IRDA is at a whopping 24,586 crore with all the insurance companies combined. Most of this is with LIC and you know there are so many policies that are never claimed after maturity due to various reasons.

Here is the old breakup of these amounts companies wise as per financial chronicle report

Unclaimed amount lying with LIC and other insurance companies in India

Rs 3,460 crores with IEPF

A big chunk of money is also lying with IEPF in form of unclaimed dividends and debentures etc., which were lying idle and no one, claimed them back on time. These amounts are transferred to something called IEPF after 7 yrs which is then used in things like investors’ awareness and protection of the interests of investors. Moneylife did an extensive story on this entire topic

Rs 2000 crore from Income Tax Refunds

As per a 2015 report by NDTV, close to Rs 2,000 crore of tax refunds were lying unclaimed with them. If a person pays the extra tax due to excess TDS deduction, one can claim the refund back by filing the returns (for the last 6 yrs). However many times investors are not even aware of these refunds or due to laziness, they don’t file the returns. Now the figures must be on the higher end.

Where does all this unclaimed money go?

The question is – If all this money is unclaimed, who exactly gets benefitted? Does the bank or insurance company keep all this money and just use it for their own benefit unless someone does not claim it back?

The answer to that is that govt has formed some of the FUNDS where these amounts shall get transferred after some number of years and that fund will be used for some purpose. Here are those funds

1. Senior Citizen Welfare Fund (SCWF)

All the unclaimed money from EPF, PPF, Insurance companies and postal deposits go to Senior Citizen Welfare Scheme which works for the betterment of senior citizens who are below poverty line in the country. I am really not clear which are the schemes or ways they do it.

2. Depositor Education and Awareness Fund (DEAF)

All the money which is lying claimed in the banks like saving bank account, fixed and recurring deposits, demand drafts etc. is transferred to this fund called DEAF and it’s used for depositor’s awareness and protection.. Which I really don’t understand what it means !

3. Investor Education Protection Fund Authority (IEPF)

IEPF is another fund which is created for investor protection and financial awareness and it gets all the unclaimed dividends, shares, matured unclaimed dividends etc. I have already written about how to claim refund from IEPF here

Make sure your money does not become part of unclaimed money in future

The learning from this is that you shall make sure that all your investments details etc. are shared with your family properly and they shall be aware of it.

Loan Moratorium Waiver Benefit by Govt – Get Cashback in your bank account soon!

There is good news for those loan borrowers who didn’t opt for the loan moratorium benefit which was introduced by govt due to the pandemic. The govt has decided to pay the interest on the interest of the loan outstanding and pass on the benefit in form of cashback to loan borrowers.

Let me explain

So those borrowers who have opted for loan moratorium benefit will only be paying the simple interest on the loan outstanding and not the interest on the interest. This means that all those who paid their EMI’s are in a way getting penalized for not taking the benefit. Hence govt has with this benefit where all those loan takers who have paid their EMI’s on time will also be just paying the interest on their loan outstanding and not the compound interest for the period of 6 months (from Mar 1 to 31st Aug 2020)

Note that the interest applicable for calculation purpose will be as on 29/02/2020.

However because the EMI payments have already been made, the govt will pay back the difference to your bank account in form of a cashback in a few days. Let me summarize it

  • What you have to pay : Only the simple interest on the loan outstanding as of 29th Feb, 2020
  • What you paid : Compound Interest on the loan outstanding as of 29th Feb, 2020
  • What you will get back : Difference between Compound and Simple Interest for 6 months

Example Calculation

Here is a sample calculation for a loan outstanding of Rs 50 lacs (as of Feb 29,2020) with an interest rate of @9%

Simple Interest = 50,00,000 * 9% * 6/12 = 2,25,000

Compound Interest = 5000000*((1+9%/12)^(12*0.5) -1) = 2,29,261

Difference = 2,29,261 – 2,25,000 = Rs 4,261

So you will get back this amount in form of cashback

This benefit is available on 

  1. Housing Loans
  2. Automobiles Loans
  3. Credit Card Debt
  4. Education Loans
  5. Consumer Durable Loans
  6. MSME Loans

Other Eligibility Criteria to get this benefit

  • The Loan Outstanding should be up to Rs 2 crore
  • The Loans should not be NPA as on 29/2/2020

This benefit will also be passed to someone whose loan is closed during the moratorium period. Do let me know if you have any questions on this and I will be able to answer that.

Corona Rakshak Policy – Get paid when you catch Covid-19

Health Insurance companies have recently launched one more corona specific health insurance policy called as Corona Rakshak Policy” as per the IRDAI guidelines.

This is a benefit based health insurance plan which pays you a lump sum amount when you are diagnosed of covid-19 and are hospitalized for continuous 72 hrs.

Corona Rakshak Policy review

Features of Corona Rakshak Policy

  1. This policy can be purchased only on an individual basis.
  2. Sum Insured options in this policy range between Rs 50,000 to Rs 2,50,000.
  3. There is no pre-medical screening necessary for this policy.
  4. This policy has a waiting period of 15 days.
  5. Adults aged between 18 yrs. to 65 yrs. can take this policy.
  6. Tax benefit on premium paid u/s 80D of Income Tax Act,1960.
  7. The policy cannot be renewed nor it has a free look period.
  8. Its a single premium policy and the tenure have 3 options of 3.5 months (105 days), 6.5 months ( 195 days), and 9.5 months (285 days).

Benefits under this Policy

If the insured person is diagnosed with COVID +ve and is hospitalized of minimum 72 hours then the corona rakshak policy will pay the full 100% sum assured to the policyholder. Note that it’s not going to settle your bills, but make a single payment no matter what are your expenses.

To get the claim, you have to give the diagnosis report of Covid-19 from an authorized govt center and the proof of hospitalization for at least 72 hrs.

Where can I purchase this Policy from?

While IRDAI has directed all companies to launch this plan, in reality its quite complicated to find out where to buy this plan. It was reported on social media from many investors that they are not able to get the online links to buy. But few also shared that they were able to buy it from the offline agents.

So right now it’s a bit complicated to buy this plan.

Ideally following insurance companies should come up with their online links for this policy, as soon as possible.

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  • Acko General Insurance Ltd.
  • Aditya Birla Health Insurance Co. Ltd.
  • Bajaj Allianz General Insurance Co Ltd
  • Bharti AXA General Insurance Co. Ltd.
  • Cholamandalam MS General Insurance Co. Ltd.
  • Edelweiss General Insurance Co. Ltd.
  • Future Generali India Insurance Co. Ltd.
  • Go Digit General Insurance Ltd
  • HDFC ERGO General Insurance Co.Ltd.
  • HDFC ERGO Health Insurance Limited
  • ICICI Lombard General Insurance Company Ltd
  • IFFCO TOKIO General Insurance Co. Ltd.
  • Kotak Mahindra General Insurance Co. Ltd.
  • Liberty General Insurance Ltd.
  • Magma HDI General Insurance Co. Ltd.
  • Manipal Cigna Health Insurance Company Limited
  • Max Bupa Health Insurance Co. Ltd
  • Navi General Insurance Ltd.
  • National Insurance Co. Ltd.
  • Raheja QBE General Insurance Co. Ltd.
  • Universal Sompo General Insurance Co. Ltd.
  • Reliance General Insurance Co.Ltd
  • Religare Health Insurance Co. Ltd
  • Royal Sundaram General Insurance Co. Ltd.
  • SBI General Insurance Co. Ltd.
  • Star Health & Allied Insurance Co.Ltd.
  • Tata AIG General Insurance Co. Ltd.
  • The New India Assurance Co. Ltd
  • Oriental Insurance Co. Ltd.
  • United India Insurance Co. Ltd.


Premium For Corona Rakshak Policy

Here is the indicative premium chart we managed to find online.. but note that these are still indicate premiums and you will get the real numbers while you purchase the policy.

a) IFFCO TOKIO General Insurance Co. Ltd –

Corona Rakshak Policy premium detaiIs of IFFCO TOKIO General Insurance

b) Star Health & Allied Insurance Co.Ltd. –

The below image shows the premium details of the “Corona Rakshak Policy” with all 3 tenures of the policy.

Star Health & Allied Insurance Co.Ltd., premium details of corona rakshak policy

Exclusion under this policy

  • If there are any diagnostic expenses made which are not related to COVID, then those expenses will not be covered in this policy.
  • If a person is tested COVID +ve before the start of the policy, then this person cannot file a claim to the company.
  • If a person is getting testing done related to COVID in diagnostic centers that are not authorized by the government then the expenses incurred will not be covered under this policy.
  • If the insured person travels to any country placed under travel restriction by the government of India the insured person will not get the benefit under this policy if the insured person tests +ve for COVID-19.

Should you take up this policy?

If you are too scared about the expenses which might occur if you get covid+, then you can surely go ahead and take up this policy as the premiums are not very big amount and anyone can manage it.

However do note that this policy will only pay if the hospitalization is there for 72+ hrs. You know that most of the people who are getting corona do not require hospitalization, which means that the chances you getting corona along with hospitalization is quite low.

Also this is going to only give you Rs 2.5 lacs, however the expenses can be quite high if you get hospitalized for a 15-20 days in a good hospital. So treat this policy as just a small support system and not the replacement of the health insurance policy in itself.


This was all that I wanted to share in this article. Let me if you have any queries in the comments section.

Corona Kavach Policy – Get insured and save high medical bills

The ongoing COVID-19 pandemic has caused a lot of fear and anxiety in our lives because there are no vaccines or any cure available for this illness. If anyone gets COVID +ve there are chances that there may be huge medical bills running into lakhs of Rupees.

In case you don’t have big health insurance, you can go for a special policy called “Corona Kavach Policy” which got introduced recently in the market.

IRDAI has come up with a standard COVID focused basic health insurance policy known as “Corona Kavach Policy”, which I will be reviewing in this article.

Corona Kavach Policy review in detail

Features of Corona Kavach Policy

  • This policy is available on an individual as well as a family floater basis.
  • The minimum and maximum sum assured offered by the policy are Rs. 50,000 to Rs. 5,00,000.
  • A person aged between 18 yr to 65 yrs can purchase this policy.
  • This policy can be purchased for self, spouse, parents, parents-in-law, and dependent children up to 25 yrs of age.
  • 2 types of cover -Base Cover on Indemnity Basis which covers COVID Hospitalization cover and Optional Cover on Benefit Basis which covers Hospital Daily Cash.
  • This policy has a waiting period of 15 days from the purchase of the policy.
  • The tenure of the policy is 3 ½ months, 6 ½ months, 9 ½ months including waiting period.
  • Premium Payment Mode is Single.
  • Tax Exemption on the premium paid u/s 80D.

What all is covered under this policy?

a) Hospitalization Cover –

If a person has tested COVID +ve in a government authorized diagnostic center then the medical expenses and expenses incurred on treatment of any comorbidity along with the treatment for COVID up to the Sum Insured will be covered under this policy provided the insured is hospitalized for more than 24 hrs in the hospital.

Let us see what all comes under hospitalization cover –

  1. Room Rent, Nursing Expenses, ICU, and ICCU charges will be covered.
  2. Surgeon, Anesthetist, Medical Practitioner, Consultants, Specialist Fees whether paid directly to the treating doctor/surgeon or to the hospital will be covered under the policy
  3. Expenses on anesthesia, blood, oxygen, operation theatre charges, surgical appliances, ventilator charges, medicines and drugs, costs towards diagnostics, diagnostic imaging modalities, PPE Kit, gloves, mask, etc.. will be covered under this policy.
  4. Ambulance charges up to Rs 2000 will be covered under this policy per insurer only if the ambulance has been availed in relation to COVID Hospitalization. This also includes the cost of the transportation of the Insured Person from one hospital to another hospital as prescribed by a medical practitioner.

b) Home Care Treatment Expenses –

If a person is tested COVID +ve in a government authorized diagnostic center and is getting treatment at home which normal course would require care and treatment at a hospital but is actually taken at home maximum up to 14 days per incident, then home care treatment expenses will be covered provided under the following circumstances –

  • If the medical practitioner has advised the insured person to undergo treatment at home with a continuous active line of treatment with is being monitored by a medical practitioner for each day through the duration of the home care treatment.
  • The insured or the family member should maintain a daily monitoring chart which includes records of treatment administered and duly signed by the treating doctor.
  • Cashless or reimbursement facility shall be offered under homecare expenses subject to claim settlement policy disclosed.

The expenses made related to the treatment of COVID will be covered under this policy. They are as follows –

  1. Diagnostic tests underwent at home or at the diagnostics centers.
  2. Medicines prescribed in writing
  3. Consultation charges of medical practitioners
  4. Nursing charges related to medical staff
  5. Medical procedures limited to parenteral administration of medicines
  6. Cost of a Pulse oximeter, Oxygen cylinder, and Nebulizer

c) Pre and Post Hospitalization Medical Expenses –

Pre-Hospitalization medical expenses of 15 days prior to admission into the hospital and Post-Hospitalization expenses of 30 days after getting discharged from the hospital will be covered under this policy.

d) Hospital Daily Cash –

Hospital Daily Cash benefit comes under an additional cover if the insured has opted for Optional Cover on Benefit Basis. Under this benefit, the insured will get 0.5% of the sum insured per day up to a maximum of 15 days.

From where can I purchase this policy?

This health insurance policy can be purchased from 30 General and Health Insurance Companies. The list of these companies is as follows –

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  • Acko General Insurance Ltd.
  • Aditya Birla Health Insurance Co. Ltd.
  • Bajaj Allianz General Insurance Co Ltd
  • Bharti AXA General Insurance Co. Ltd.
  • Cholamandalam MS General Insurance Co. Ltd.
  • Edelweiss General Insurance Co. Ltd.
  • Future Generali India Insurance Co. Ltd.
  • Go Digit General Insurance Ltd
  • HDFC ERGO General Insurance Co.Ltd.
  • HDFC ERGO Health Insurance Limited
  • ICICI Lombard General Insurance Company Ltd
  • IFFCO TOKIO General Insurance Co. Ltd.
  • Kotak Mahindra General Insurance Co. Ltd.
  • Liberty General Insurance Ltd.
  • Magma HDI General Insurance Co. Ltd.
  • ManipalCigna Health Insurance Company Limited
  • Max Bupa Health Insurance Co. Ltd
  • Navi General Insurance Ltd.
  • National Insurance Co. Ltd.
  • Raheja QBE General Insurance Co. Ltd.
  • Universal Sompo General Insurance Co. Ltd.
  • Reliance General Insurance Co.Ltd
  • Religare Health Insurance Co. Ltd
  • Royal Sundaram General Insurance Co. Ltd.
  • SBI General Insurance Co. Ltd.
  • Star Health & Allied Insurance Co.Ltd.
  • Tata AIG General Insurance Co. Ltd.
  • The New India Assurance Co. Ltd
  • Oriental Insurance Co. Ltd.
  • United India Insurance Co. Ltd.


Premium for Corona Kavach Policy

Livemint Research has done a detailed study of Premium for various companies. Check out the premium table below.

premium details of corona kavach policy

Exclusion under this policy –

  • If there are any diagnostic expenses made which are not related to COVID, then that expenses will not be covered in this policy.
  • If a person is tested COVID +ve before the start of the policy, then this person cannot file a claim to the company.
  • Expenses incurred in daycare treatment and OPD treatment will be excluded from this policy.
  • If a COVID +ve person is getting treatment outside India, then the expenses incurred in the treatment will not be covered under this policy.
  • If any expenses incurred on un-proven treatment, procedures, or supplies related to COVID which lacks medical documentation to support its effectiveness will not be covered in this policy.
  • If a person is getting testing done related to COVID in diagnostic centers that are not authorized by the government then the expenses incurred will not be covered under this policy.
  • Expenses made on dietary supplements and substances which are purchased without prescription will not be covered under this policy.

A short video review of Corona Kavach Policy –

All features mentioned in this policy are referred from IRDAI notification.

Conclusion –

So this was all that I wanted to share in this article if you have any queries you can put it in the comments section.

3 months EMI Moratorium benefit – Why you should NOT opt?

Today, there was a news about 3 months moratorium (which means a temporary relief) benefit on all kind of loans and how investors won’t have to pay their EMI for 3 months. However it was celebrated by investors without understanding it fully.

So I thought of clarifying some doubts regarding it and to share with you that it’s actually not a very big benefit and why most of the investors should not OPT for it.

Let me clarify on what is the EMI moratorium meaning and how does it apply to you?

Meaning of EMI Moratorium

A lot of people in our country might get impacted due to coronavirus and this 21 day lockdown and their incomes and salaries might get impacted. A lot of people may find it very tough to service their EMI on time and there was a need of the hour for some relief. Hence govt has given permission to banks, NBFC’s and housing finance companies to consider an EMI moratorium and pass on the benefit to the customers

Which simply means that it’s not a forced rule, but only a permission given to banks if they want to do it. RBI will not count those missed EMI payments as “defaults” and not count it as NPA (non-performing assets) and also directed banks to not report it to CIBIL and other beaureu

Now it’s up to bank on how they would like to implement it. Banks might pass on the benefit to ALL or some customers. Here are the exact RBI notification wordings you might want to read.

Will your EMI deducted stop ?

No, looks like you will have to apply for this benefit in case you wish to and only when you apply for it, the EMI will then not get deducted. If you just don’t take any action, then the EMI may get auto deducted as always.

A guy names Siddharth told me on twitter that his bank might deduct the EMI (will not pass the benefit) if salary is credited in the account. Here is the conversation snapshot

EMI moratorium clarification

As I said, this will only happen if you get this benefit from your bank and bank agrees for it. Checkout the tweet below where an investor asked his bank about it and bank person told that it might not be applicable to him if he gets the salary.

Will I pay any interest for those 3 months of moratorium ?

A lot of investors are showing their happiness about this RBI notification and feeling like they are getting some very big benefit. However in reality it’s opposite and it’s suggested for you to NOT take this benefit.

If someone takes this moratorium benefit, they interest will be accruing on the outstanding balance and you will have to pay the interest at the end of 3 months. Their EMI will start getting deducted after 3 months.

What it means is that assume someone has a 30 lacs of home loan, and an EMI of 30,000 (just a random assumption) and interest rate is 8% , then one month interest will be Rs 20,000 (30 lacs * 8% = 2.4 lacs yearly .. Divide that by 12 to get monthly interest = 20,000)

And for 3 months, it will be Rs 60,000 additional simple interest. This additional interest will be added to your outstanding balance and your tenure will go up.

Same is true for outstanding balance on credit cards.

The only benefit you will get here is that you will not be paying any kind of penalty and it won’t be reported to CIBIL.

Update from various banks

Here is a notification from SBI bank and ICICI bank to its customers that interest will still be charged on the outstanding balance if one wants to avail this benefit.

Most of the banks have also clarified that to take this benefit, one has to contact the bank and ask for this benefit. If you don’t take any action, then the EMI will get deducted as usual.

Should you opt for EMI Moratorium benefit?

By now, you must have understood that this benefit is not for someone who is not facing severe financial crunch or whose income/salary is going to go down due to coronavirus impact. So if you can easily pay off your EMI’s, then please do so and don’t opt for this moratorium benefit.

It’s only for someone who is going to see salary loss, job loss and is facing very hard time financially due to this lock down. They are getting TIME from bank side and nothing else.

Do let us know what you feel about it in comments section.

Will your insurance company cover Coronavirus (Covid-19)?

As I write this, Coronavirus is already spreading in India and there have been 148 positive cases in India. 3 people have died.

Coronavirus is spreading across the world and has killed so many across the world (especially China, Italy, Iran, and Spain). A lot of us have bought life and health insurance policies and the natural question you might have is “Does my insurance company cover coronavirus?”

And the good news is the answer to that is “YES”. I also called up the customer care of my term plan and health insurance companies and got a confirmation in audio format which is there below if you want to listen to it.

Almost every life insurance and health insurance policy will be covering coronavirus related claims and policy holders don’t have to worry about it. Even IRDA has issued a guidelines against coronavirus and how insurance companies should deal with it in its recent circular

IRDA circular on coronavirus (covid-19) for insurance companies

Life Insurance & Coronavirus (Covid-19)

I just called to the customer care of the insurance company from where I had taken term plan and they told me clearly that the entire claim because of coronavirus will be paid and we do not have to worry about it.

Here is a clarification from Aviva Life Insurance on Coronavirus coverage

Death from these kinds of natural calamities and illnesses are covered in life insurance. So if you have a running life insurance policy, you should not worry about it at all. The claims will be paid

Health Insurance & Coronavirus (Covid-19)

Even in health insurance policies, the claims against expenses for coronavirus treatment and quarantine will be covered. However, when I called my health insurance policy company, they told me that while the treatment in recognized hospital will be surely covered just like other illnesses, the treatment at home will not be covered (this was Religare Care)

Here is a clarification from the customer care of Religare


One of my teammate at the office have the policy with Birla Sun life and they got an SMS which clearly told them that they need not worry about it and its covered. Here is the snapshot of the message –

Coronavirus is covered by health insurance companies

So, I think you should not worry at all about its covered by your health insurance company, however, you may want to call your company customer care number and verify in case you want to be double sure about it.

Get clarity from your Insurance company

Only the active insurance policies will be cover coronavirus related claims. If someone is in between the purchase of the policy and gets the virus, the policy might not cover it. Please get clarity on this from insurance company. Also on some articles, I read that some health insurance companies may not cover a disease that is declared as an epidemic or pandemic by the World Health Organization (WHO).

So to be double sure about it, it’s better to go through your policies and check this on your own with customer care.

Do let me know what you think about this matter and if you have any more questions.

2 big reasons why markets are falling?

Sensex is down by 7.96% today

In the last 1 month alone the markets have corrected by 23% and it was one of the fastest and steepest declines ever in the history of stock markets in India (and globally)

sensex crash 2020

A lot of equity investors are very new to this game and many might be wondering what is going on and why markets are falling?

So in this article, I will just jot down 2 big reasons which are contributing to this steep fall.

Reason #1 – Fear and Panic because of Coronavirus

The biggest reason and the trigger of this huge market falls from the last 1 month is because of the coronavirus.

The entire world is fearful about the spread of this virus and its impact on the world.

In the entire world, the businesses are hugely impacted because of coronavirus. Because of this virus and the fear around it, various factories are shut down and work is stopped. Other companies which needed raw material are not getting it and production is down. Overall manufacturing is HIT.

Which also means that consumption is down and will be down in the near future also and it will only go up slowly over time.

Impact of coronavirus on business globally

One very simple example is APPLE. Its products get manufactured in China and because China factories is shut down, the apple stock is down because it’s going to hit their profitability.

One more way of understanding coronavirus impact on business is simple meat/poultry businesses especially in India. The demand for Chicken/mutton or other similar items have drastically gone down. No one is buying it. Now imagine the job losses, no sale of associated products like poultry feeds by poultry farms..

Another example is the tourism industry. People are not going on vacations, or booking very less flights, etc. which is directly going to impact so many companies on at a deeper level.

So in general various businesses around the world are impacted and as you might be knowing stock markets chase earnings. Because the future earnings of companies across the world are going to be impacted, the stock markets are just reflecting that today.

Markets are desperately looking for news where we develop some medicine or vaccine for coronavirus which gives some kind of assurance that we will be able to control this virus and further damage.

Reason #2 – Crude Oil Price Crash

Crude oil in international markets has crashed badly.

The oil price was a few days back fell by almost 30% in one single day and hit around $30 per barrel (Oil price in 1947 was $28 per barrel)
Crude Oil Crash

This was $120-130 around 10 yrs back and just 2 yrs back it was in $60-70 range.

The huge drop in oil prices also indicates huge slowdown and low demand, even though it’s amazing news for India because we import oil and it’s going to save us billions of dollars in oil bill.

Why is it happening?

Well, its extremely complicated thing for a retail investor like you and me, but for now you should know that there is a price was going on between Russia and Saudi Arabia which has triggered this oil crash. Russia did not honor its promise as per its OPEC promises and now Saudi Arabia is kind of punishing it for going against OPEC and have crashed the prices which as per some analyst is not going up very soon.

You can either read this article or watch this excellent YouTube video to understand about oil crash.


For the last many months, there was a correction expected but the sudden rise of coronavirus has added a new level of fear among investors and the crash happened before people even realize what is happening.

Markets have corrected by a good margin and now we have officially entered into a bear market (above 20% fall is bear market). While no one can catch the bottom and can’t guarantee that more down fall cannot happen, this is surely not the time to sell off your long term money. If it was your short term money, it should not have been there in equity markets at all.

One of the suggestions right now would be to partly invest some money which you don’t need for the next 8-10 yrs and be ready with some cash incase the market falls further from here.

Disclaimer: This is a highly complex topic and I do not claim to be an expert on this matter. I have shared my opinion and my limited understanding, so please feel free to correct me on any point.