Banned medicines in India

Many of the drugs for which clinical trials are mandatory are being marketed in India and more than a dozen medicines which are banned in other developed countries are still being sold in the markets in India.

Regulatory reports for many important drugs are not available and these drugs are being approved based on the incomplete data that is available. The firms who want their products to be sold in the market are influencing the process which is involved in decision making about the drugs. Moreover, there is no Drug Controller General for India who works for full time and the existing drug regulatory body is not sufficiently staffed.

Parliamentary standing committee on health has reviewed the drug regulation status in India and has revealed some unbelievable irregularities in the system. The committee has scrutinized about 39 drugs that were approved by the Drug Controller General of India.

• It was found that of the 39 drugs, for 11 drugs, the third phase of clinical trials which were mandatory was not conducted.
• Two drugs – Dronedarone by Sanofi and Aliskiran by Novartis, it was mandatory to conduct clinical trials for at least 100 patients but that was conducted only in 21 and 46 patients.
• Another drug Irsogladine by Macleods which was approved by the Drug Authority, clinical trials were conducted in only two hospitals while it was necessary to perform the trials for at least three to four hospitals.
• Bucilizing by UCB, Everolimus of Novartis, Pregabalin and Pemetexid by Eli Lilly were the four drugs which were approved even when the third phase of clinical trials was not performed. The decision of approving the drugs was taken by the non-technical staff of the Drug Control Authority.
• It was also found that no files could be traced for three drugs pefloxacing, Limefloxacin and Sparfloxacin and thus no documents could be provided on them. The committee also felt that the disappearance of files is not accidental because all these are controversial drugs. Many countries including US, Canada, Australia and Britain has not allowed the marketing of these drugs as their drug regulatory system is very well developed.
• During January, 2008 to October 2012, nearly 31 new drugs were approved for which no clinical trials were conducted on Indian Patients.

Given below is the list of medicine that are being marketed in India and those for which third phase clinical trials were not conducted. Patients should be careful about buying these medicines.

A drug which is a combination of Pregabalin, Alpha Lipoic Acid, Methylcobolamine, Pyridoxine and Folic Acid from THEON is a diabetic drug that is also approved without phase three trials by the drug authority of India.

Few other drugs which are banned by other countries but are still available in Indian markets are –

• Buclizine ( UCB)
• Doxofylline ( Mars)
• FDC of Aceclofenac with Drotaverine ( Themis)
• FDC of Aceclofenac with Thiocolchicoside ( Ravenbhel)
• FDC of Diclofenac with Serratiopeptidase ( Emcure)
• FDC of Etodolac with Paracetamol ( FDC)
• FDC of Gemifloxacin with Ambroxol ( Hetero)
• FDC of Glucosamine with Ibuprofen ( Centaur)
• FDC of Nimesulide with Levocetirizine ( Panacea)
• FDC of Ofloxacin with Ornidazole ( Venus)
• FDC of Pregabalin with other agents ( Theon)
• FDC of Tolperisone with Paracetamol ( Themis)
• injection ( Panacea)
• Nimesulide

Endowment and ULIP policies were popular for insurance till recently. Presently term insurance policies are becoming popular and insurance companies are also paying special interest in introducing term policies according to the changing needs of lives. Term policies are those which provide only insurance coverage and there will not be any income from threes policies. There will be no maturities in term policies. There are few things which have to be taken care of when purchasing term policies.

Life is full of unexpected events. Head of the family has the responsibility to look after the financial needs of his family even when he is not present physically in this world. There are many insurance policies available for this purpose and term policies are the best option for providing financial security to the family. Many get the doubt about for how much value the term policy should be taken and if it is really beneficial to take a term policy. Many still do not have awareness about the advantages of term policies.

• Insurance companies calculate the value of a person based on his annual income. Every person should have an insurance coverage of twelve times his annual income excluding his investments. Life style, present and future requirements of the family has also to be considered. Term insurance policies should be taken so that the loans and credit card bills will not be a burden to the family if death of earning member of the family occurs.
• Insurance coverage should continue as long as the policy holder is earning. It should continue till the policy holder retires from his job. Term policy should be taken for the duration after deducting the present age from retirement age.
• Observe the claim records of the company before choosing a term policy. Few companies issue the policies to their customers but create problems during claiming the policy amount. Therefore it is necessary to observe the claim records of the company. Insurance companies should follow the guidelines of controlling authority in claim settlements.
• Many insurance companies are providing the opportunity to add riders by paying an additional premium. The main objective of the riders is to provide additional advantages to the policy holders. These riders can be obtained for a small amount.
• Insurance companies offer discounts for term insurance policies. These depend on the food habits and life style of the policy holder. For example discount in premium is offered to those who do not have the habit of smoking. Few companies offer special discounts to women.
• Important thing to be followed while purchasing a term policy is to provide complete information to the insurance company. If this is done there will not be any problems with the insurance companies at the time of claiming.
• If insurance company asks the policy holder to submit medical reports the policy holder should do so. This will be beneficial both for the policy holder and the insurance company. It is better to pay a little more premium for any small health problems than to give a chance to insurance companies to reject the claims.

While deciding on the value of term insurance policy, consider the inflation and increasing prices. Value of rupee will further decrease in future due to inflation. Therefore the insurance coverage amount should be increased by 5 – 10 percent every five years.

For salaried people, income tax will be deducted at source. So they do not have to worry about pre-tax deduction. Pre-tax is to be paid if in any financial year the income tax to be paid exceeds Rs. 10,000. Pre-tax has to be paid in the specified dates in the months of September, December and March in a financial year. Those who need to pay the pre-tax should pay it before 15^th March, 2012 to reduce the interest burden.

Those whose income comes from interested should keep in mind certain things. It is to be finding out whether the banks and financial organization deducted tax at source for the interest paid for deposits. It also should be find out whether TDS returns are filed at the income tax department. If returns are not filed by banks and financial organizations, the tax deducted at source by these will not be credited to the account of assignee.

• Those who earn income through rents have to pay the income tax after deducting local taxes, thirty percent exemption available and the interest paid for the housing loans.
• If the income of the assignee is within the slab of maximum annual income, they have to give declaration through form number 15G.

Capital gains are categorized as short-term capital gains and long-term capital gains. For short-term capital gains, income tax has to be calculated after deducting the capital losses. For short-term capital gains obtained through transactions in stock exchanges, 15% tax is to be paid. To get complex tax exemption or to reduce tax for long-term capital gains, few rules and regulations are to be followed.

• For fixed assets, registration value is considered as sale value. If the property is registered for less rate than the government rate, sale value or the government value either of which is more will be take an standard for calculating the tax.
• If a flat or house is bought, registration charges should also be calculated. To get tax exemption of capital gains, new house or flat should be bought before 31^st July, 2012 which is the last date for filing returns.

If it is not yet decided whether to buy an independent house or a flat, the amount can be credited into the bank account under ‘Capital Gain Account Scheme’ before the last date for filing returns. Receipt for the same should be submitted along with income tax returns to get tax exemption.

Financial year 2011-12 is coming to an end and many would have done investments and savings to get tax benefits. Those who have not should know about the tax exemptions one can get under various sections of income tax act.

• Income tax act gives the opportunity to tax exemption under Section 80C up to a maximum of Rs. 1,00,000 on savings. Life insurance policy premiums, public provident fund, ULIPs, annuity scheme payments, equity linked savings schemes, pension funds, repayment of housing loan as on 31^st March, 2012 come under this section. Section 80 CCC for pension funds and Section 80 CCD for central government pension schemes are also part of Section 80C. Those who are investing in any of the above schemes should analyze and check whether they are claiming deductions for these or not.
• Under Section 80CCF tax exemption on savings up to Rs. 20,00 can be obtained. For this the tax payer has to invest in long term basic infrastructure bonds.
• Deductions for payments of health insurance policies can be claimed under section 80D. A maximum up to Rs. 15,000 can be claimed. For senior citizens the limit is up to Rs. 20,000. Deduction for Health insurance policy premium payment for parents can also be claimed up to Rs. 15,000.
• Medical expenses for physically handicapped persons who are dependent on the assignee can be claimed under Section 80DD. Exemption up to Rs. 50,000 can be claimed for common medical treatment and for severe handicap, a maximum of Rs. 1,00,000 can be claimed. For this the assignee has to submit Form 10-1A taken from authorized medical officers along with the income tax returns.
• As per Rule 11 DD1 of income tax act, tax exemption can be claimed for the medical expenses for self or for dependents. Rs. 40,000 exemption is allowed under this rule. Medical expenses of senior citizens can be claimed up to Rs. 60,000. For 10I issued by the doctor should be submitted along with income tax returns.
• Tax exemption is applicable to the interest paid for educational loan taken for children under Section 80E. But this interest should be paid before 30st March, 2012. One should remember that the interest on education loans can be claimed only for a period of eight years.

Tax exemption can also be claimed for the loan taken for a house or flat which is under construction. To get the tax exemption in 2011-12 financial year for house or flat under construction –

Flat or house should have registered in the name of the assignee as on 31^st March, 2012. The construction should have completed and the assignee should have taken the procession of it.

Many people purchase insurance policies to avoid paying income taxes. The real objective of insurance is different. Life insurance policies should be bought not only for saving the tax but also for other requirements. Most of the people buy insurance policies on the name of either their children or their life partners to save income tax. Phones of insurance agents, advertisements of insurance companies and new policies in the market influence the tax payers. One has to be careful not to get influences by the above and think carefully before buying an insurance policy.

Before deciding on the insurance policy, analyze the investments and savings. Find out how much more has to be invested/saved to save tax. If an insurance policy is being bought only to avoid paying income tax, there are some dos and don’ts which should be followed.

• While buying insurance policies, policy term should not be considered but his age and responsibilities. Term policies suit those who have children. They should take policies that will become handy for children education. Pension policies can also be purchased by considering the income.
• Presently many companies are offering insurance policies online. More than twelve companies are online policies for fewer premiums. Even for a Rs. One crore policy purchased online, the premium will not be more than Rs. Ten thousand.
• Insurance policies should provide financial assistance to the family, not only when the policy holder expires, but also when he meets with an accident or suffer from ill health. Riders are helpful for this purpose.  Therefore policy holders should not forget to add disability rider, critical illness cover, premium waiver riders etc for their insurance companies. Few insurance companies offer riders directly.
• Young persons who do not have many responsibilities for the time being should take term policies and health insurance policies. They can get the no claim bonus in health policies. Married persons should go for family floater policies. Tax exemption up to Rs. 15, 000 will be available under section 80 D for the premium paid to the insurance policies.
• Compare the insurance policies offered by various companies. Find out the advantages in each policy. Take decision only after observing the company rules and regulations.
• Life insurance and health insurance sectors are changing and companies are launching new policies accordingly. They are mainly targeting those who want to save tax. Do not neglect such policies.
• Do not consider the premium being paid for insurance companies as investment. The main objective of insurance policies is to provide financial support in emergencies.
• Insurance policies are not one time matter, premiums have to be paid to keep the insurance policy alive. If a policy is taken this year with huge premiums to save tax and the next year premium could not be paid, the policy cannot be continued.
• Insurance policies are not the only way to save tax. There are alternatives also. Equity linked savings schemes are a better way to save tax and also to get profits.
• Many people forget to renewal their policies. Term and health policies should be renewed by paying premium at a right time. Otherwise the policy will be lapsed and the very objective of buying the insurance policy will not be met.
• Term policies provide more coverage with fewer premiums.

Do not hide anything while filling the insurance proposal form. The details of insurance policies that have already been taken should also be provided.

Many bank account holders do not show any interest in savings account interest since the interest amount received is only nominal. But now banks are offering interest on savings accounts similar to fixed deposits. Earlier banks could gather funds easily with savings and current accounts by offering low interest rates. Banks do not even collected charges for most of the services. RBI has lifted control over the interest rate on savings account and banks are competing with each other to offer better interest rates. They are even collecting charges for some services. Therefore one should be careful while maintaining the savings account and also in utilizing the bank services.

As now there is no control of RBI over the interest rates paid for savings accounts, many banks are offering 6 to 7% interest rates. This interest rate is applicable to more than Rs. One lakh deposits only.

Daily interest rate is paid on the savings accounts by banks. But these banks try to get back the amount they spend on the savings account in another form. They collect charges for various services they offer to the customers. Banking sector experts are saying that Indian banks are following the methods being observed by banks in developed countries. Few banks though hiked the interest rates on savings account, have not increased the service charges. They abstain from hiking the service charges to attract new customers and to retain their existing customers.

Service charges of banks

Almost all banks are observing the minimum balance amount in savings accounts. If there is no minimum balance amount they are collecting huge fines such as Rs. 750 per month. Few banks are charging Rs. 350 per month.

• There is a limit for cheque deposits, money transfer, NEFT and RTGS services. If the number of transactions crosses the limit, Rs. 75 will be charged for every transaction.
• Few banks charge Rs. 50 for utilizing the phone banking services.
• If the cheque book, debit card, PIN and other communication letter were returned back to bank due to address change of the customer, the bank will charge Rs. 50 to Rs. 75.
• If money deposits or withdrawals are done from the other branches of the bank, a maximum of three transactions are allowed. After that customer has to pay a charge for every transaction.

Many people have the habit of maintaining savings accounts in more than two banks. In the changing situations it is necessary to check these accounts. It is not easy to maintain minimum balance in all the accounts. If minimum balance is not maintained, one has to pay huge fines. Therefore it is advised to close the unnecessary savings account. One should not forget that Credit Bureau of Information observes the accounts of every customer.

Retired life will be happy for those who have perfect financial planning from the time they started earning. Those who do not have this planning will have to suffer in their whole life. Pension policies are one way to make the retired life tension free. With a good financial planning it is possible to lead a tension free retired life. While it is important to begin saving for the future, it is equally import to choose the best savings policies. Pension policies are very popular to plan for retired life. Many people think of unit linked pension policies to save for retired life. There are two types in unit linked pension policies. One of the policies comes along with life insurance policy while the others are only for investment purpose. Now a day, pension policies are being considered as a tool for becoming rich. Mutual funds, new pension schemes and provident funds are better alternatives for pension schemes. But the main drawback of these is that they do not offer any life insurance coverage. These can be selected for purely investment purpose.

Pension plans from life insurance companies

For those who want to take pension policies from life insurance companies, two plans are available. Those are

• Differed Annuity schemes
• Immediate Annuity schemes

Differed Annuity schemes: Premium will be paid for a specified period in differed annuity plans. This period is called ‘vesting period’. Premiums can be paid at a time or annually. Not only unit linked policies but traditional endowment policies are also being offered by almost every insurance company. In traditional policies, policy value and bonus are paid by the insurance companies after the completion of policy term. But in unit linked pension schemes, fund value till date will be calculated and paid. Providing life insurance coverage is another advantage with unit linked pension schemes.

Immediate Annuity schemes: Single premium has to be paid for these pension policies. Policy holder can decide whether he wants the pension to be paid monthly, once in three months, once in six months or once in a year. Pension will be decided depending on the annuity rate and duration. Pension will be paid till the policy holder is alive. Depending on the scheme selected, pension will be paid to the nominee also.

Traditional pension policies

Unit linked pension plans has to be selected after weighing the pros and cons. Traditional endowment schemes are for those who do not want any risk. Along with the policy amount, bonus and loyalty addition will be paid. Life insurance is another attraction in these pension policies.

Tips to choose a pension policy

Pension schemes give good income in the long run. Therefore it is beneficial to take the policy at a young age to gather good amount.

• Policy holders should take life insurance coverage and additional riders also.
• When choosing ULIP pension plan, functioning of the fund should be observed carefully.
• Decide the policy term depending on the present age of the policy holder and his age of retirement.

Draw backs in pension policies

Though choosing a pension policy appears very simple, there are many problems with them. It is not easy to estimate how much amount will be received at the end of the policy term. In ULIPs, income depends on the fund value. In traditional policies, bonus rate changes every year. In traditional policies, minimum policy value will be assured.

• Pension amount will be decided in immediate annuity schemes based on the annuity rate.
• The pension amount from immediate annuity schemes should be shown as income and tax has to be paid as per the slabs.

Immediate annuity schemes offer no life insurance coverage. Loans cannot be taken against these pension schemes.

Usage of internet is increasing considerably.  It is estimation that there are more than ten crore internet connections in India presently.  India is in the third place of countries that use social networking sites such as Face book.  Indian is also conducting their financial transactions online.  People or depending on internet for cinema tickets, railway ticket booking and banking transactions also.  Insurance policies are also available online.  Most of the insurance companies are trying to offer simple term policies to endowment policies online

Advantages with online insurance policies

There are many advantages with online insurance policies than taking policies in traditional method.  Distribution charges for companies for online policies are less.  There for online policies are offered for fewer prices when compared to offline policies.  Except medical test, every other procedure of purchasing a policy can be done online.  Selection of policy plan, payment of premium etc can be done online.  Presently seven insurance companies are offering online term policies in India.  Based on the coverage required by the customer,  there are tools available online that allow comparing the policies and premiums of various companies.  Depending on the insurance coverage amount, companies may ask to undergo medical tests.  Only this has to be done offline.

Precautions with online policies

Though premiums are less for online insurance policies, few precautions are to be taken while purchasing them.  Policyholders may not furnish the details of their ill health to reduce the premium.  This may cause problems while settling the claim.  Therefore complete information about health should be given online also like in offline.  If the policyholder has the habit of smoking or drinking, he should mention this while taking online policy also.  Purchasing online insurance policies will be easy if one has knowledge to use internet and are aware of the policies.

Own house, car etc have become common necessities for people. With the increased prices, it may not possible to buy expensive things or properties with one’s own money. Therefore most of the people are taking loans to buy these things. But when the loan cannot be paid back and something happens to the loan taker, it should not become a burden for the family members. Loan insurance policies can help to avoid problems in such situations. For this mortgage insurance, decreasing covering insurance plans are useful.

Insurance for loans

Monthly instalments have to be paid for the loans taken for buying properties or vehicles. If the loan taker could not pay the money and dies, the family members have to repay the loan. If the loan is not cleared, bank authorities may take the procession of the house which is bought with loan. In such situations, having loan insurance will be useful. The insurance company will pay back the loan. Insurance facility for loans is available not only for big loans but also for personal loans, credit card bills etc. To take loan insurance policies, the details of the loan have to be given to the insurance company. The company will issue Mortgage Insurance policy to the amount equal to the loan amount. Loan insurance can also be provided with Decreasing cover term plan.

Infrastructure development in India is being given much importance. To raise funds in infrastructure sector, many companies are issuing infrastructure bonds. The money invested in these bonds gets income tax exemption, many are ready to invest in infrastructure bonds. Let us see the benefits of infrastructure bonds.

Tax payers can claim tax exemption up to Rs. 1,00,000 on personal investments under section 80c/80CCC/80CCD. Provident fund, housing loan, life insurance premium, tuition fees paid for children education etc come under these sections. Under section 80D, Rs. 15,000 can be claimed for the premium paid of health insurance policies. 80CCF is the additional tax saving option. Under this section up to Rs. 20,000 can be invested in infrastructure bonds to get tax exemption. It is important to find out how much tax saving is possible with infrastructure bonds, what will be the income and the rating of the bonds.

Tax saving with infrastructure bonds

The investment in infrastructure bonds will be exempted from income. Tax has to be paid for the remaining part of the income. Tenure of infrastructure bonds is ten years. Tax exemption is applicable only when the investment in infrastructure bonds continues for five years. After that the bonds can be sold in the market or can be given back to the company. Investing in infrastructure bonds is beneficial for people who are in higher tax slabs.

Companies are offering 9% annual interest on the infrastructure bonds presently in the market. Almost all companies are offering similar interest. Income from infrastructure bonds depend on the income tax slab, the person comes under. Investing in infrastructure bonds is beneficial for tax payers in all tax slabs. But there are other options which give good income. Bond those cannot give tax saving option like infrastructure bonds.

Presently many companies are offering infrastructure bonds. The rating of the company has to be observed carefully before investing in them. To get good benefits, purchase the infrastructure bonds of the company that promises more income. Companies will buy the infrastructure bonds back after the lock-in period of five years. Once investment is made in infrastructure bonds, one has to wait for the completion of lock-in period. After lock-in period, these can be sold in the open market also as the value of the bonds increases.

At the time of purchasing the infrastructure bonds, one has to opt for buy-back option. This gives minimum guarantee for the investment. Based on the situation one can continue the infrastructure bonds or sell them.