All about pension plans, luxury apartments: Top personal finance stories

This week we explain the pros and cons of deferred annuity plan and what to look for in a gated society home

If you wish to buy a product that offers a guaranteed lifetime income and addresses the risk of outliving your savings, go for a deferred annuity plan. They also allow you to lock in prevailing interest rates. Read this week’s lead story by Sanjay Kumar Singh and Karthik Jerome to understand the role these plans can play in your retirement portfolio.

For insights into the dynamics of the luxury real estate market (upscale gated projects within city limits) and tips on how to purchase such high-end homes, read the newsletter’s second story by Namrata Kohli.

If you have an investment horizon of one to three years and do not wish to take much risk, consider investing in a short-duration fund. Check out Morningstar’s review of Kotak Bond Short-Term Fund if you are looking for one such fund.

A term insurance plan provides the best safeguard against the risk of the breadwinner passing away early. Look up Policybazaar.com’s table to get an overview of the premium rates of these highly cost-effective plans.

NUMBER OF THE WEEK

Rs 3,500 crore: Cost to exchequer due to withdrawal of small direct tax demands

The Finance Minister announced in the Interim Budget the withdrawal of outstanding direct tax demands of up to Rs 25,000 for the period up to FY10 and up to Rs 10,000 for FY11 to FY15. This step will cost the exchequer about Rs 3,500 crore.

The total amount of small tax demands is about 26.8 million. Of these demands, about 5.8 million demand entries are for FY10, and another 5.3 million are for FY11 to FY15.

This measure will spell relief for many. It is expected to prevent unnecessary harassment of the taxpayer caused due to having to justify old demands. It is also expected to facilitate the quick processing of refunds in subsequent years.