The Madras High Court, in a recent order, has held that the restrictive provisions introduced in the Income Tax (I-T) Act, which call for reinvestment in only ‘one’ residential house in India for claiming capital gains tax exemption, apply from fiscal April 2014. The Finance Bill, 2014, had clarified that the benefit of capital gains tax exemption under Sections 54 and 54F was intended only in respect of reinvestment in one residential house in India. Thus, on enactment of the Bill, the relevant Sections of the I-T Act were amended.
Earlier, the words used in the I-T Act were reinvestment in ‘a residential house’. Prior to the amendment, there was ambiguity on whether the term ‘a residential house’ meant a single unit or could include more than one house.
The New Delhi Consumer Disputes Redressal Forum, presided by CK Chaturvedi, dismissed the plea filed by a Delhi resident, Neeru Khosla, seeking death claim for her husband from Life Insurance Corporation (LIC) of India. The Forum noted that while taking the policy the man had hidden the fact that he was suffering from cancer and “suppressing material information is act of bad faith.”
“The contract of insurance is based on utmost good faith and its violation by the insured by suppressing material information is act of bad faith. In our considered view, Opposite Party (LIC) has been able to discharge its burden to prove suppression of facts. In these circumstances the OP cannot be faulted for repudiating the death claim. The complaint is dismissed,” the Forum said.
The raison d’être of fund houses is that they use their knowledge and expertise to choose the best stocks for investors. However, at Moneylife we believe that asset management companies can do much better if they are less callous with your money. Often, schemes have overvalued stocks, or stocks that were picked only because they have a high weightage in their benchmark index. We think mutual fund portfolios can have fewer and better quality stocks. Therefore, over the past few years, we have been compiling a ‘Super Stock’ portfolio—a portfolio of the top stocks of top mutual fund schemes that excludes the stocks that are unlikely to add value. Our unique approach to stock-picking has done well in the past. We have not only beaten the Sensex but have outperformed a majority of ‘professionally managed and constantly monitored’ equity schemes. Turn to our Cover Story to see the top bets of best equity schemes and a review of how our portfolio has performed in the past.
While mutual funds pick index stocks, such that their performance is in line with that of benchmark, one cannot blindly invest in companies simply because they are in the index. Our columnist, R Balakrishnan, points out in our Smart Money section, on how one should have a method for stock-picking.
The malaise of corruption and influence-buying is deeply ingrained in the system. Sucheta, in her Different Strokes section, writes about the sordid episode of the goings-on at the residence of CBI director Ranjit Sinha and how high-ranking bureaucrats misuse their power. Like Mr Sinha, many of our top bureaucrats, including bank chairmen, seem compromised. Will the government do something about it?
On 16th September, Moneylife Foundation proudly received the 10th MR Pai Memorial Award. This Award, in the memory of well-known consumer activist MR Pai, is given to a consumer activist or consumer organisation each year by the All India Bank Depositors Association. We thank you for being with us on this eventful journey.