Moneylife Events
Why women have poor access to justice and how to change it

At the 4th annual Women’s Day event (supported by DSP BlackRock's Winvestor Initiative), Moneylife Foundation honoured two amazing women, Meena Seshu of SANGRAM and Jyothi Mhapsekar of Stree Mukti Sanghatnana, for their contributions to society. This was followed by a speech by another great achiever, Justice Sujata Manohar, who discussed the reasons why the justice delivery system is so poor and the ways it can be changed


The second half of Moneylife Foundation’s 4th annual Women’s Day event (supported by DSP BlackRock's Winvestor Initiative) began with felicitations to two very important Maharashtra-based activists, Jyothi Mhapsekhar of Stree Mukti Sanghatana and Meena Seshu of SANGRAM. The mementos to both activists were presented by Justice Sujata Manohar, who soon after delivered her keynote address.
 

In her acceptance speech, Ms Mhapsekhar, who works to empower ragpickers, urged citizens to consider their while doing something as simple as throwing away their garbage. She said, “A simple thing like sorting garbage at source would help thousands of ragpickers who struggle to make a living. These women work in very difficult circumstances. While there was a proposal to fine those who don’t sort their garbage, I would say that offenders should be instead taken to the garbage dump to see what life is like sorting out 10,000 tonnes of garbage.”
 

Ms Seshu, in her acceptance speech, discussed the mission of SANGRAM, which is working to give equal rights to sex workers. She said, “SANGRAM, after years of working with sex workers, men who have sex with men, and transgender people, have created a bill of rights. The reason we did this is that middle-class and wealthy people of India don’t know how to treat sex workers. What the people of India need to accept is that people can exist how they want to exist.”
 

After the felicitations to Ms Mhapsekhar and Ms Seshu, Justice Sujata Manohar delivered the keynote address on ‘The Case for Delivering Better Justice to Women: A view from the Judge’s Chair’. Justice Manohar began her speech by discussing what the problems in the justice system are. She said, “The first problem with the Indian justice system is that the laws can’t be properly understood. We need laws that take into account the needs of society. Once this is done, they need to be implemented. There are several other things we need. Just punishing wrongdoers, giving jail-time isn’t enough. We need community service provisions, we need compensatory provisions.”
 

Justice Manohar also spoke about the differences in the various laws that have been implemented. She said, “Definitions of words in laws in our country vary according to their purpose. This is not done. Take, for example, the age of consent.  Sexual relations with a girl below 16 is rape, but under Protection of Children from Sexual Offences Act, a child is defined as a person under 18. Under Juvenile Justice Act and marriage laws, there are still different ages.”
 

The problem is not always with our laws, Justice Manohar explained, as she criticised sections of society for discriminating against women. She said, “The Constitution promised equality, but forgot about the absence of a tolerant society. Our society is unwilling to accept different viewpoints. Fundamental freedoms, particularly of expression, should include the women’s right to wear what she likes. Yet some say this should not outrage the modesty of a man. We need to realise that we don’t have the right to take the law into our own hands.”
 

Despite being modern in many respects, most states in our country have a completely unacceptable male to female ratio. Justice Manohar says, “We have several customs that deny equal respect to women. There is such a disparity in the sex ratio in Punjab that people there purchase girls from the north east to service entire families of men. So it’s given rise to slavery. Also, the demand for dowry is growing, not reducing. The law has had no impact. Society does not want the elimination of dowry.”
 

Dowry has not been eliminated, but Justice Manohar hopes that domestic-violence-related laws have some impact on the current state of things. She said, “We must be careful that domestic violence doesn’t go the same way dowry has. But it doesn’t look as if it will so far. The act is supposed to provide protection officers, but this has not been set up properly. So we just need just laws, we need the machinery to work. We need someone to supervise. Also, our attitude to it needs to change. How often do we tell a woman to suffer in silence when her man beats her?”
 

Justice Manohar ended her speech discussing the need to update laws. She said, “Laws related to illegal trafficking is badly in need of amendment. It focusses on the women, rather than those controlling the trade. Similarly, marital rape is still not accepted by government. Even Nepal, which has verbatim the same penal code, has interpreted the law to include marital rape. But our government hasn’t done so.”
 

The session ended with a lively discussion between the members of the audience and Jyoti Mhapsekar, Meena Seshu and Justice Sujata Manohar. Several important topics, including inflexible adoption laws and lack of government initiative in finding missing persons, were discussed.
 

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COMMENTS

ABHA CHAWLA MOHANTY

4 years ago

EQUALITY IS REALLY ENSHRINED IN CONSTITUTION,,,,,HOW MANY WOMEN STRUGGLE TO STAY AFLOAT IN MANS WORLD???.............despite ,everything,,,

P M Ravindran

4 years ago

When I opted for voluntary retirement from the army in 1998 I had thought of taking up law as a second career. But as luck would have it, I had an application pending with the court of wards for permission to mortgage the property on which a house was being constructed and a loan had been availed from HDFC. Believe you me, I had to withdraw the application, thanks to the woman judge who was to take the call on that application. Till date I am wondering who it was who cheated me- the judge or the advocate! Anyhow, I simply gave up my plans to pursue a course and career in law!

Vaibhav Dhoka

4 years ago

May this day is extended to month and then to Year round so as to br Equal in all sense.

Nifty, Sensex close to short-term top: Friday Closing Report

Nifty will hit a resistance on Monday but if it manages to close above 5970, the rally may continue


The market closed in the positive for the fourth day in a row on gain in oil & gas, FMCG, metal and banking stocks. Positive global cues supported the sentiments. Nifty will hit a resistance on Monday but if it manages to close above 5970, the rally may continue. The National Stock Exchange (NSE) saw a volume of 68.53 crore shares and advance-decline ratio of 985:521.

The domestic market opened in the green on signs that the global economy is picking up. US markets closed higher on Thursday people filing for unemployment benefits fell last week to a seasonally adjusted 340,000, marking the second week of decline. Markets in Asia were in the positive in morning trade on firm economic indicators from across the region and from the US.

The Nifty opened 21 points at 5,884 and the Sensex resumed trade at 19,479, up 65 points over its previous close. Touching their intraday lows in initial trade, the Nifty stood at 5,883 and the Sensex was at 19,478.

Buying interest in oil & gas, consumer durables, PSU and metal stocks boosted the momentum in early trade. However, the benchmarks pared a small part of their gains and were seen sideways in the morning session.

The government today sought Parliament’s not to spend an additional Rs49,715.54 crore mainly to meet the outgo on fuel, fertiliser and food subsidies in the current financial year. The announcement led to a surge in PSU oil stocks.

A higher opening of the European indices on growth optimism helped the domestic indices extend their gains in post-non trade. Sustained gains in oil & gas, fast moving consumer, goods, metal and banking stocks led the benchmarks to their intraday highs in the last half hour.  At this point the Nifty touched 5,953 and the Sensex climbed to 19,706.

The market closed marginally off the highs, making it the fourth day of gains. The Nifty settled 82 points (1.41%) higher at 5,946 and the Sensex jumped 270 points (1.39%) to finish trade at 19,683.
 
Markets in Asia, with the exception of the Shanghai Composite and Straits Times, closed in the green on positive economic data. Revised fourth-quarter GDP figures from Japan showed the economy slowly stabilizing after two quarters of recession. A 21.8% increase in Chinese exports in February against a 15.2% fall in imports, was also seen as a positive sign.

The Hang Seng surged 1.41%; the Jakarta Composite gained 0.54%; the KLSE Composite rose 0.18%; the Nikkei 225 jumped 2.64%; the Seoul Composite added 0.08% and the Taiwan Weighted advanced 0.69%. Bucking the trend, the Shanghai Composite declined 0.24% and the Straits Times fell 0.22%.

At the time of writing, among European markets the CAC 40 was up 0.97%; the DAX of Germany rose 0.57% and UK’s FTSE 100 was up 0.38%. At the same time, the US stock futures were in the green, indicating a positive for the US markets later in the day.

Back home, foreign institutional investors were net buyers of stocks totalling Rs630.47 crore on Thursday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs715.11 crore.

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LIC’s Jeevan Sugam: Why is LIC suppressing the tax benefit feature under Section 10(10D)

LIC’s Jeevan Sugam advertisement claims to give 80C tax benefit at entry, but curiously it is silent about the 10(10D) tax-free corpus at exit. At a time when insurers make bold claims about tax benefits, LIC is understating the tax benefit which can create suspicion in the minds of consumers

LIC (Life Insurance Corporation of India) has launched a traditional single premium product, Jeevan Sugam. The death benefit is 10 times the single premium paid and hence it should qualify for Sections 80C and 10(10D) tax benefits at entry and exit, respectively. Tax savings is an important selling point for insurance products and insurers like to highlight it in advertisements even to the extent of mis-selling.

 

Strangely, the Jeevan Sugam advertisement only highlights Section 80C tax benefit, but remains silent about 10(10D) tax-free corpus on maturity. What could be the reason?
 

 

Till March 2012, LIC was mentioning “Income Tax benefits under Section 80C and 10(10D) as per prevailing tax laws” in the advertisement. Case in point is Jeevan Vriddhi which mentioned about it. When the Finance Bill, 2012, made it mandatory that the sum assured should be 10 times the annual premiums (the earlier limit was five times) for insurance policies to enjoy the tax benefits on contributions under Section 80C and on maturity under Section 10(10D), the LIC Jeevan Vriddhi advertisement stated “Full tax benefits available up to 31st March 2012” as its death benefit was five times the premium.
 

 

So, keeping silent on tax-free corpus on maturity for Jeevan Sugam is intriguing as LIC could have handled it like Jeevan Vriddhi in case tax laws were to be changed in the Finance Bill, 2013. As there is no change to the regulation pertaining tax benefit in the Union Budget 2013 (except for those with disabilities) there is no reason for LIC to keep silent on the 10(10D) benefit. It will only make the consumer suspicious about whether they will indeed get tax-free corpus on maturity.
 

Moneylife has written to LIC to find out the reasoning, but there was no response till writing of this article. One call to an LIC official left us even more curious. After a short laugh, the person stated that they are not ready to part with the logic behind the move. On insistence, here is the clarification he gave:  “10(10D) should be available, but LIC has stopped mentioning about it for the last few products. We don’t want to pitch the product for tax savings purpose as it should be purchased for insurance needs. Since it is a tax saving season, we are highlighting Sec 80C benefit.”
 

Why even highlight 80C if the product is to be purchased for insurance needs and not tax savings purposes? Moreover, tax savings is guaranteed by the regulations and hence why shy away from it? According to one LIC agent, “The end result is that the very reason why people buy insurance products will lead to confusion about tax benefits on exit.”

 

Even the LIC’s development officers seem to be in the dark. According to one of them, “LIC has stopping putting 10(10D) benefit for last few products, but we have not been told the reasons by the corporate office.” Another LIC agent feels that it is due to some sort of clarification from a tax consulting company that LIC has dropped 10(10D) in the advertisement. While this is mere speculation, the fact is that LIC being a de facto government organisation, can indeed seek clarification from the finance ministry and take a firm stand on tax benefits of the product.

 

There could be three possible speculations why LIC may not be advertising about 10(10D) tax benefits. Let’s take example of person aged 30 years with premium of Rs33759 + 3.09% service tax. The death benefit will be Rs3,37,590, but maturity sum assured is only Rs60,000.

 

  • If you are not healthy, your premium will be loaded and you may not even meet the requirement of death benefit of 10 times the premium; 10(10D) will not be applicable. E.g. class one extra for age 30 years in above example will be Rs846. Total premium payable = Rs33,759 + 846 + service tax.
     
  • LIC Jeevan Sugam does have death benefit as 10 times of the premium, but it is excluding the service tax. Could this be an issue as the total premium with service tax will be more than 10% of the death benefit? It is unlikely. E.g. Premium with service tax = Rs33,759 + Rs1,043.15 = Rs34,802.15.
     
  • The maturity sum assured in the product is different than death sum assured. While the death sum assured is 10 times the premium, the maturity sum assured is low. The wordings in the rules specify about premium up to 10% of the actual capital sum assured. Some interpret actual capital sum assured as maturity sum assured, which makes Jeevan Sugam ineligible for tax benefits. More likely, death benefit will be the capital sum assured and stamp duty of the policy is payable on it and not maturity sum assured. It may be a non-issue, but see comment section below for another interpretation.

 

When the government issues tax-free bonds, it is clear that the interest paid on the bonds is tax-free. As a buyer you are assured that tax-free bonds indeed will never ask for taxation on the interest. The same clarity is there for PPF and EPF. Will insurance product buyers not want such comfort level? They deserve it and the insurer’s silence about it is tantamount to disservice. Nobody likes to be opaque about tax benefits of the product, and especially they don’t want nasty surprises of tax payment on the corpus at product maturity.

 

If any reader has more information about the reasoning behind LIC’s Jeevan Sugam being silent about 10(10D) benefit, please write to [email protected] We will keep it confidential.
 

Moneylife wrote about SBI Life’s Smart Income Protect advertisement claiming tax-free payout with fine print about consulting tax advisor for details. What is not clarified is that policy term of five and 10 years does not qualify for 10(10D) tax benefit, only policy term of 15 years will.

 

Read - SBI Life Smart Income Protect: Regrets guaranteed, year after year

 

Insurance companies tend to overpromise on tax benefits and under deliver, but here LIC seems to under promise and hopefully will over deliver.

 

Read the latest Moneylife cover story (21 March 2013) “Pension & Life Policies: Tax-traps?” for some secrets on pension and life insurance taxation that insurers will not tell you about. The magazine is available on the stands from 8th March 2013.

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COMMENTS

kiritraichura

2 years ago

IS LIC IS ABOVE IRDA ? AND IT IS VERY MUCH SURPRISING AND RATHER AMAZING THAT EVEN IRDA HAS GIVEN PERMISSION FOR SUCH TYPE OF PRODUCT. WOULD IRDA HAD GIVEN PERMISSION TO PRIVATE LIFE INSURANCE CO?

raj

4 years ago

Interesting information from one Moneylife reader -

Definition of actual capital sum assured under Section 80C states :

For the purposes of this sub-section, "actual capital sum assured" in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—

(i) the value of any premium agreed to be returned; or

(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

The happening of the insured event can be Maturity also other then Death and Minimum Assured amount is paid on Maturity.

So one will get tax benefit on premium upto 10% of Maturity Sum assured under sec 80C and benefits of 10(10D) will not be available.

As interpretation differ from person to person, please get it clarified from Tax experts or CBDT for the benefit of investing public.

REPLY

DEEPAK KHEMANI

In Reply to raj 4 years ago

Different tax experts will have different interpretations of what has been said above, will they be around 10 years later when people receive their maturity? If the IT officers start interpreting their own way then what?
There seems to be a lot of confusion over this 80c and 10(10D) Lets hope Raj and Moneylife can organize a seminar on this topic specifically, with a talk by 1-2 EXPERTS who can clarify these doubts.

sridharan

4 years ago

maturity proceeds of insurance policy is tax free u/s 10(10)D may get withdrawn , remember govt planning for EET ,(Exempt at entry , exempt while enjoyment,TAX at exit) expct this soon .

REPLY

DEEPAK KHEMANI

In Reply to sridharan 4 years ago

What is being talked here is present regulations and not whether it may be withdrawn later.
If today a product is 10(10D) compliant it will remain so irrespective of any change which may come in future.

DEEPAK KHEMANI

4 years ago

The service tax component goes to the Govt Of India, That should not be taken into consideration.
The premium receipt from LIC Clearly states Premium and service tax Separately, so if one needs to claim 80C benefit then technically it is on the premium paid only and excluding the service tax component.
As to why LIC is silent on 10(10D) it is actually intriguing as the product for a normal person fulfills all the criteria for being 80C AND 10(10D) compliant.

Madhusudan Thakkar

4 years ago

It is the duty of IRDA to ensure that plans they clear should fulfil requirements with regard to Taxation...On the one hand IRDA is concerned about so-called mis-selling & on the other hand it is giving clearance to such Toxic plans.....All said & done IRDA will not do anything it is a toothless tiger...Remote control is with Finance Ministry.....So nothing will happen in this case ....LIC will make a "Kill" in the current month especially for Tax- Saving purpose.

REPLY

Rajesh Kumar Gupta

In Reply to Madhusudan Thakkar 2 years ago

prior to 1992 the same restriction of life insurance premia upto 10% of sum assured was applicable. the sum assured had the same definition as it is today i.e. excluding any premia returned during the term of policy
or bonus additions. section 10(10)D was not there at that time. can it help in any way to come out of deadlock.

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