Tax Benefit on Insurance For Disabled

In a relief to the disabled as well as their guardians, the Budget 2022 has introduced a minor taxation tweak in the insurance product for disabled.  Earlier, the premium paid on insurance policies bought by parents of differently abled children or dependants qualified for deduction under Section 80DD only if the annuity or lump sum was paid to the disabled child on the death of the policyholder. Now, the annuity or lump sum can be paid to the disabled child even during the lifetime of the parent who is above 60 years old. 
It has been proposed that the tax deduction under Section 80DD will be provided even if the parent or guardian is alive provided he is over 60.  Another implication is that the payout to the disabled, whether annuity or lump sum, will no longer be taxable, which it earlier was. However, we need further clarity on this as there’s still some confusion about it. 
According to Finance Minister Nirmala Sitharaman, the tax change is as follows: “The present law provides for deduction to the parent or guardian only if the lump sum payment or annuity is available to the differently abled person on the death of the subscriber, that is, parent or guardian. There could be situations where differently abled dependants may need payment even during the lifetime of their parents/ guardians. I propose to allow the payment of annuity and lump sum amount to the differently abled dependant during the lifetime of parents/guardians, that is, on parents/ guardians attaining the age of 60 years.” 



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu