Category: Finance

The real cost of education in India is skyrocketing. See fees for IITs, NITs, BITS, medical, MBA & private colleges with 2040 projections.

Every parent dreams of giving their child the best education, but few realize how fast the cost of higher education in India is rising. Be it engineering, medicine, MBA, or law, the expenses are no longer limited to tuition fees. Hostel, food, books, technology, and other living costs often add 30–50% extra burden.

In this detailed analysis, we will cover:

• Current 2025 education costs in Karnataka and India’s top institutes (Govt, Private, IITs, NITs, IIITs, IIMs, BITS, NLUs).
• Management quota realities in private colleges like RVCE, PES, MSRIT, St. John’s, and Manipal.
• Postgraduate expenses (MBA, Medicine, Law).
• Living expenses in cities like Bengaluru, Manipal, Pilani, Delhi, and Hyderabad.
• Inflation-adjusted projections for 2040, assuming an 8% annual fee hike.

Cost of Education in India 2025–2040: Fees, Living & Projections

Why Parents Must Worry About Education Inflation

According to the National Sample Survey (NSSO) and reports from Ministry of Education, education inflation in India has consistently been 2X the average consumer inflation.

• In the last 15 years, IIT fees have jumped from Rs.50,000/year to Rs.2.5 lakh/year.
• Private medical colleges in Karnataka charge Rs.10–25 lakh/year under management quota.
• MBA programs in IIMs that cost Rs.3–5 lakh in early 2000s now cost Rs.25–28 lakh.

If the same pace continues, by 2040 the cost of a professional degree could be 3–4x of today.

Section 1: Engineering Education Costs

A) Government Colleges (Karnataka CET)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.65,000	4 yrs	Rs.2.6 lakh
Hostel + Food per Year	Rs.60,000	4 yrs	Rs.2.4 lakh
Grand Total			Rs.5 lakh

2040 Projection (8% inflation): ~Rs.15 lakh

B) Private Colleges – CET Seat (e.g., RVCE, PES, MSRIT)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.2.5 lakh	4 yrs	Rs.10 lakh
Hostel + Food per Year	Rs.1.2 lakh	4 yrs	Rs.4.8 lakh
Grand Total			Rs.14.8 lakh

2040 Projection: ~Rs.45–50 lakh

C) Private Colleges – Management Quota (Top Tier)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.5–6 lakh	4 yrs	Rs.20–24 lakh
Hostel + Food per Year	Rs.1.5 lakh	4 yrs	Rs.6 lakh
Grand Total			Rs.26–30 lakh

2040 Projection: ~Rs.75–90 lakh

D) Elite Institutes (IIT/NIT/IIIT)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.2.5 lakh	4 yrs	Rs.10 lakh
Hostel + Food per Year	Rs.90,000	4 yrs	Rs.3.6 lakh
Grand Total			Rs.13.6–14 lakh

2040 Projection: ~Rs.40–45 lakh

E) BITS Pilani (and Goa, Hyderabad campuses)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.7.5 lakh	4 yrs	Rs.30 lakh
Hostel + Food per Year	Rs.2 lakh	4 yrs	Rs.8 lakh
Grand Total			Rs.38 lakh

2040 Projection: ~Rs.1.1–1.2 crore

Section 2: Medical Education Costs

A) Government Medical Colleges (AIIMS, State Govt.)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.12,000	5.5 yrs	Rs.66,000
Hostel + Food per Year	Rs.70,000	5.5 yrs	Rs.3.85 lakh
Grand Total			Rs.4.5–5 lakh

2040 Projection: ~Rs.12–15 lakh

B) Private Colleges – CET Seat (Karnataka)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.8 lakh	5.5 yrs	Rs.44 lakh
Hostel + Food per Year	Rs.70,000	5.5 yrs	Rs.3.85 lakh
Grand Total			Rs.47.5–48 lakh

2040 Projection: ~Rs.1.3–1.4 crore

C) Private Colleges – Management Quota (Manipal, St. John’s, KMC)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.20–22 lakh	5.5 yrs	Rs.1.1–1.2 crore
Hostel + Food per Year	Rs.2.5 lakh	5.5 yrs	Rs.13.75 lakh
Grand Total			Rs.1.25–1.35 crore

2040 Projection: ~Rs.3.5–4 crore

Section 3: MBA Education Costs

A) Government MBA Colleges (Karnataka University, Bangalore University)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.1.25 lakh	2 yrs	Rs.2.5 lakh
Hostel + Food per Year	Rs.1 lakh	2 yrs	Rs.2 lakh
Grand Total			Rs.4.5–5 lakh

2040 Projection: ~Rs.12–15 lakh

B) Private MBA Colleges (CET Seats – e.g., Christ, Alliance)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.6 lakh	2 yrs	Rs.12 lakh
Hostel + Food per Year	Rs.50,000	2 yrs	Rs.1 lakh
Grand Total			Rs.13 lakh

2040 Projection: ~Rs.35–40 lakh

C) Private MBA Colleges – Management Quota

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.10–12 lakh	2 yrs	Rs.20–24 lakh
Hostel + Food per Year	Rs.1.25 lakh	2 yrs	Rs.2.5 lakh
Grand Total			Rs.22–26 lakh

2040 Projection: ~Rs.60–70 lakh

D) IIMs

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.13 lakh	2 yrs	Rs.26 lakh
Hostel + Food per Year	Rs.25,000	2 yrs	Rs.50,000
Grand Total			Rs.26.5–27 lakh

2040 Projection: ~Rs.75–80 lakh

E) ISB Hyderabad

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee (1 Yr)	Rs.35 lakh	1 yr	Rs.35 lakh
Hostel + Food	Rs.1 lakh	1 yr	Rs.1 lakh
Grand Total			Rs.36 lakh

2040 Projection: ~Rs.1 crore

Section 4: Law, Arts & Commerce

A) National Law Universities (NLUs – e.g., NLSIU Bangalore)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.2.5 lakh	5 yrs	Rs.12.5 lakh
Hostel + Food per Year	Rs.1.2 lakh	5 yrs	Rs.6 lakh
Grand Total			Rs.18.5–19 lakh

2040 Projection: ~Rs.55–60 lakh

B) Arts & Commerce Colleges (Govt.)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.20,000	3 yrs	Rs.60,000
Hostel + Food per Year	Rs.60,000	3 yrs	Rs.1.8 lakh
Grand Total			Rs.2.4–2.5 lakh

2040 Projection: ~Rs.6–7 lakh

C) Private Arts & Commerce Colleges (Christ, Jain, St. Joseph’s)

Particulars	Fee (2025)	Duration	Total (Rs.)
Tuition Fee per Year	Rs.2 lakh	3 yrs	Rs.6 lakh
Hostel + Food per Year	Rs.1.2 lakh	3 yrs	Rs.3.6 lakh
Grand Total			Rs.9.6–10 lakh

2040 Projection: ~Rs.28–30 lakh

Final Thoughts

• For engineering, govt colleges are still affordable, but BITS and private management seats are touching crores in the long run.
• For medicine, govt seats are priceless; private management quota will cost Rs.3–4 crore by 2040.
• For MBA, IIMs and ISB already cost as much as a down payment on a house.
• Even arts, law and commerce have seen costs rise steeply.

Parents must start goal-based financial planning for education. Waiting till Class 12 is too late. In our next part of this article, I will explain you how you can set the goals and plan for child education.

Few of my earlier articles may help you to understand more about child planning.

References

1. IIT Fee Circular 2024–25 – IIT Bombay
2. BITS Pilani Fee Structure 2025
3. AIIMS MBBS Fees
4. NIRF 2024 – Ministry of Education
5. RVCE/PES Fee details – KEA Karnataka
6. IIM Ahmedabad PGP Fees
7. ISB Hyderabad Fees

Credit cards are marketed as tools for convenience, rewards, and building credit. But behind the scenes, companies design them to make money off specific spending habits. Certain purchases are more likely to generate interest, fees, or recurring charges that benefit lenders. Many of these are everyday expenses that feel harmless in the moment but can quietly add up over time. By understanding what credit card companies hope you’ll swipe for, you can protect your wallet and keep more of your hard-earned cash.

1. Groceries and Everyday Essentials

Buying groceries with a credit card seems like a practical choice, especially with cards that advertise rewards at supermarkets. But grocery spending adds up quickly, and when balances aren’t paid in full, interest makes milk and bread cost far more than their shelf price. Credit card companies love this category because it’s consistent and unavoidable for most households. The more you swipe for necessities, the more likely you are to carry a balance. To avoid paying extra, treat groceries like cash and pay them off each billing cycle.

2. Gas and Transportation Costs

Gas stations are another common spot where companies profit. Since drivers must regularly fill up, these charges provide steady, recurring income streams. Even if you earn cashback on fuel, carrying a balance wipes out any benefits with interest charges. Credit card issuers count on customers ignoring these small but frequent swipes. Paying with a debit card or setting aside a monthly gas budget can stop these transactions from becoming costly.

3. Streaming and Subscription Services

Streaming platforms, meal kits, or subscription boxes feel affordable because they’re charged monthly. Credit card companies encourage this because recurring charges are easy to forget and often go unnoticed. Over time, these “small” amounts accumulate into larger balances that carry interest. Even when consumers cancel one subscription, they often replace it with another. Reviewing your monthly statements closely is the best way to cut unnecessary recurring charges.

4. Dining Out and Takeout

Restaurants and takeout apps are prime examples of expenses that quickly inflate monthly credit card bills. While cards may offer points on dining, unpaid balances erase any reward advantage. Card issuers profit because these charges are frequent, variable, and often tipped, meaning larger transactions. Many consumers also underestimate how much they spend when eating out, leading to higher balances. Paying in cash or using a prepaid card can help keep these costs in check.

5. Travel and Hotel Stays

Flights, hotels, and rental cars are marketed as “reward-friendly” purchases, but they also represent high-ticket transactions. If you don’t pay off travel costs in full, interest makes vacations much more expensive than planned. Credit card companies also earn sizable merchant fees from travel providers, making this category especially lucrative. Even so, many travelers are lured in by flashy sign-up bonuses or perks. Using a separate savings account for trips can reduce reliance on credit cards.

6. Medical Bills and Copays

Medical expenses are unpredictable, which makes them easy for credit card companies to profit from. Families often swipe for copays, prescriptions, or surprise bills, only to carry those balances for months. Because these are urgent expenses, people rarely shop around or budget for them. Card issuers know medical charges are difficult to avoid, which is why they generate high interest income in this category. Setting up a health savings account (HSA) or emergency fund can help avoid charging these bills.

7. Holiday and Gift Purchases

Credit card companies thrive during the holiday season when spending spikes on gifts, décor, and travel. Shoppers often justify overspending by planning to pay it off “later,” which leads to months of interest. Holiday promotions also tempt consumers to put more on credit than they can reasonably afford. Issuers know that emotional spending tied to traditions and family often overrides rational budgeting. Creating a holiday budget ahead of time is the best defense against costly swipes.

8. Big-Ticket Electronics and Appliances

Electronics, furniture, and appliances are purchases that card issuers especially hope you’ll finance. These are high-dollar items that accrue significant interest if balances aren’t paid quickly. Retailers often pair store credit cards with these purchases, increasing fees and interest rates. Companies profit when consumers focus on short-term rewards or discounts while overlooking long-term costs. Paying with cash or using a 0% promotional financing plan (if paid off in time) is a smarter approach.

Why Awareness Saves You More Than Rewards

Credit card companies design their systems to maximize profits, and the items above are prime targets. While rewards programs may seem enticing, they often distract from the real cost of carrying a balance. Awareness of these spending traps is your best defense against unnecessary fees and interest. By paying off essentials quickly and budgeting for big expenses, you can outsmart the credit system. The less you rely on swipes for these categories, the more money stays in your pocket.

Have you noticed certain expenses sneak up on your credit card bill? Share your thoughts and experiences in the comments below!

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We covered the new tax deductions in the 2025 Trump tax law in previous posts: seniors, car loan interest, tips, overtime, charity donations, and the SALT cap increase. The law also created a new type of tax-advantaged account called the Trump Account.

Trump Account, of course, is named after President Trump, in the same way Roth accounts are named after Senator William Roth. It was originally called MAGA Account when it was introduced in the House bill before the name changed to Trump Account.

What Is a Trump Account?

A Trump account, in essence, is a non-deductible Traditional IRA for kids without earned income.

Kids with taxable compensation (“earned income”) from a job or self-employment can already contribute to a Traditional or Roth IRA. They need an adult to serve as the custodian until they’re 18 or 21. This type of account is called a custodial IRA (most parents choose the Roth version). Mainstream brokers such as Fidelity, Schwab, and Vanguard all offer custodial Roth IRAs.

A Trump account is similar to a custodial Roth IRA for a child, except that:

1. It’s a non-deductible Traditional IRA, not a Roth IRA. Contributions are not tax-deductible. Earnings are taxed as ordinary income upon withdrawal.
2. The child doesn’t need taxable compensation (“earned income”) from a job or self-employment.

Age Requirement

A Trump account can receive contributions for a child under 18 by the end of the calendar year. You can’t contribute for older children. The child must be a U.S. citizen. There’s no minimum age.

Contributions

No one can contribute to a Trump account just yet. The law says contributions can’t be accepted until July 4, 2026, which is 12 months after the date of its enactment.

When that date arrives, parents and family members can open an account for kids who won’t be 18 yet by the end of the year.

The initial account must be opened through the federal government. It can be rolled over to a private financial institution afterward. The government will contribute a one-time $1,000 to kids born in the years 2025 through 2028 (inclusive).

The maximum contribution an eligible child can receive in a calendar year is $5,000. If parents and grandparents contribute to accounts for the same child, the total combined contributions still can’t exceed $5,000 in that year. The $1,000 from the government for a newborn doesn’t count toward the $5,000. The $5,000 annual limit is indexed to inflation, starting in 2028.

An employer is allowed to contribute up to $2,500 a year to an employee’s or the employee’s dependent’s Trump Account if the employer establishes a program for their employees. The employer contribution won’t be taxed to the employee at the time of the contribution, but the money will be taxable upon withdrawal, similar to a 401k match from an employer. The employer contribution counts toward the $5,000 overall contribution limit, similar to how it works in an employer contribution to an HSA.

It might be wishful thinking that an employer will establish such a program. It’s unclear whether a one-person business can set up a program for the owner’s children.

Federal and state governments and charities can also contribute to Trump accounts for a broad class of children in an area. Their contributions don’t count toward the $5,000 annual limit. Treasury Secretary Scott Bessent said Trump Accounts could lay the groundwork for privatizing Social Security (and maybe other state child welfare programs?).

Investments

Investments in a Trump account are limited to index funds and ETFs that track a U.S. equity index, such as the S&P 500, and charge an expense ratio of no more than 0.1% a year. The law specifically says the index must be “comprised of equity investments in primarily United States companies” — no bonds, no international stocks, no target date funds.

As in other IRAs, earnings aren’t taxed while the money stays in the Trump Account.

Distributions

No distributions are allowed until January 1 of the calendar year in which the child reaches age 18. The money is locked up except for rollovers and withdrawal of excess contributions. You can’t take the money out even if you’re willing to pay a penalty.

The law doesn’t explicitly say what happens when the child is no longer eligible to receive contributions, but the general rule says a Trump Account shall be treated as a Traditional IRA. I take it to mean that it just turns into a regular Traditional IRA in the child’s name on January 1 of the calendar year in which the child turns 18. In that case, all existing rules on a regular Traditional IRA will apply at that point (requiring earned income to contribute, contribution limits, converting to Roth, etc.).

Should you open a Trump account for your kid when it’s available? It’s a no-brainer to collect the one-time $1,000 from the government if you have a newborn in 2025 through 2028. Beyond that, it depends on how much money you have and what the money is for.

Trump Account vs Custodial Roth IRA

If the child has earned income from a job or self-employment, a custodial Roth IRA is better than a Trump Account. Earnings are tax-free from the get-go in a custodial Roth IRA.

You can do both a custodial Roth IRA and a Trump Account if you have more money to contribute. A contribution to the child’s Trump Account doesn’t eat into the contribution limit for a custodial Roth IRA based on the child’s earned income, and vice versa.

Trump Account vs 529 Plan

Many parents save for their kids’ college education in a 529 plan. Distributions from a 529 account are tax-free if they’re used for qualified education expenses.

A 529 plan is better if the money is for college. It’s tax-free, whereas earnings built up in a Trump Account will be taxed as ordinary income upon withdrawal. Many states also offer tax incentives for contributing to a 529 plan.

Trump Account vs Custodial Account (UTMA/UGMA)

If you want to give money to your child for something other than college expenses, you can already set up a custodial account, also known as a UTMA/UGMA account. Mainstream brokers all offer custodial accounts. Buying savings bonds in a child’s name is similar to using a custodial account.

A custodial account is taxable, but a child receives favorable tax treatment on a set amount of investment income each year. The first $1,350 in investment income in 2025 is tax-free. The next $1,350 is taxed at the child’s tax rate. Investment income received by a dependent above $2,700 in 2025 is taxed at the parent’s rate.

A custodial account is more flexible. There’s no limit to how much you can put into a custodial account. You can invest in more diversified investments, not just U.S. stocks. You can withdraw from a custodial account at any time when the money is used for the benefit of the child. If you invest tax efficiently, there won’t be much tax to pay each year, and the child pays the lower tax rate on long-term capital gains (possibly at 0%) when they eventually sell.

A custodial account is still the way to go if you want flexibility.

Converting to Roth

Besides the one-time $1,000 for a newborn in 2025 through 2028, the lure of a Trump Account is in converting the money to a Roth IRA when the child is no longer a dependent. The earnings built up over the years will be taxed as ordinary income in the year of the conversion, but maybe the child is still in a low tax bracket at that time. The Roth IRA will provide a good base for the child’s retirement.

Legislative Risk

However, if the child is already 15 or 16, contributing $5,000 a year for only a few years won’t gain much in tax benefits over a regular custodial account, even when the money is converted into a Roth IRA at age 18. If the child is still young, it’s far from certain whether the law will stay in its current form until the child is 18.

Many things can happen in 18 years while the money is locked up. It’s an understatement to say that the Trump name is more controversial than Roth. A good percentage of people in the country may not want it associated with their kids. If the political regime changes, the Trump Account might be repealed. You may end up with an orphan account that has nowhere to go, or you may get a forced distribution. Your child may never see the opportunity to convert it to a Roth IRA.

We’ve seen several initiatives that didn’t go as well as the government had hoped.

The Obama administration introduced a “myRA” account in 2014 for people without a workplace retirement plan. Only 0.05% of all people who could’ve signed up did so. The program was shut down after two years.

Coverdell Education Savings Account (“Coverdell ESA”) began as a savings vehicle for children’s education. It fell to the wayside after 529 plans became available, to the point that Fidelity and Vanguard stopped accepting new contributions to Coverdell ESAs many years ago. Vanguard recently asked all existing Coverdell account holders to close their accounts.

The SECURE 2.0 Act created a “Saver’s Match” program to match the retirement contributions from low- to moderate-income Americans. It was supposed to begin in 2027, but now the entire program has been killed. No one received any Saver’s Match.

Priority

I would place the Trump Account below the existing tried-and-true account types in terms of attractiveness:

• Custodial Roth IRA if the child has earned income;
• 529 plan for education;
• Custodial (UTMA/UGMA) account for flexibility.

If you have more money than you know what to do with for a child after all the accounts above are fully funded, maybe take a chance on a Trump Account in 2026 and plan to have the child convert it to a Roth IRA after turning 18. Just be fully aware that the account may end before there’s any opportunity to convert it to a Roth IRA.

***

You’ll find more deep dives on recent changes from the 2025 Trump tax law in the full OBBBA series.

When buying life insurance, most people compare premiums, coverage, or tax savings. But one crucial factor often gets overlooked — the Claim Settlement Ratio (CSR). This simple percentage tells you how many claims an insurer actually honors out of the total received. In short, it reflects the company’s trustworthiness when your family needs it most. A high CSR means higher chances your claim will be paid—no stress, no hassle.

In this blog, we break down what claim settlement ratio is, how it’s calculated, and why it should be the first thing you check before choosing a life insurance policy. Because when it comes to protecting your family’s future, reliability matters more than anything.

What is Claim Settlement Ratio?

The Claim Settlement Ratio (CSR) is a key metric that shows the percentage of insurance claims an insurer has successfully paid out in a financial year, compared to the total number of claims received. It helps you understand how dependable an insurance company is when it comes to settling claims.

Here’s how it works:

• Formula:
  Claim Settlement Ratio = (Total Claims Settled / Total Claims Received) × 100
• Example:
  If an insurance company receives 1,000 claims and settles 980, then:
  (980 / 1000) × 100 = 98%
• This means 98% of claims were honored, while 2% were either rejected or pending.

A higher CSR usually indicates a more trustworthy and customer-focused insurer—one that’s more likely to support your family when it matters most.

Why Is Claim Settlement Ratio So Important?

Imagine paying premiums for 20 years to secure your family’s future—only to have the insurance claim rejected when your loved ones need it most. That’s where the Claim Settlement Ratio (CSR) becomes critical. It tells you how reliable an insurer truly is when it’s time to deliver on their promise.

A high CSR signals trustworthiness, while a low one could be a red flag. Here’s why it should matter to you:

• Trust Factor: A high CSR reflects that the insurer honors most claims—building credibility and confidence.
• Claim Processing Efficiency: Companies with better CSRs usually have more efficient and transparent claim handling systems.
• Family Security: It ensures your dependents actually receive the financial support you planned for them.
• Red Flag Identifier: A consistently low CSR may signal frequent claim rejections or poor documentation processes.

In short, CSR is not just a number—it’s a safety indicator for your family’s financial protection.

How is Claim Settlement Ratio Calculated?

The Claim Settlement Ratio (CSR) is calculated using a simple formula that tells you how many claims an insurance company has successfully paid out compared to the total number received in a year.

Claims Ratio Formula:

Claim Settlement Ratio = (Number of Claims Settled / Number of Claims Received) × 100

Example:

• Claims received: 10,000
• Claims settled: 9,700
• Claims rejected or pending: 300

CSR = (9,700 / 10,000) × 100 = 97%

This means the insurer settled 97% of all claims received during that period—a sign of high reliability.

Related Terms You Should Know:

• Claim Paid Ratio: Often used interchangeably with CSR; it reflects the same idea but may be presented differently in some reports.
• Amount Settlement Ratio: Instead of focusing on the number of claims, this ratio looks at the total claim amount paid versus the total amount claimed—especially useful for high-value policies.
• Insurance Claim Ratio: A broad umbrella term that includes various claim-related metrics like CSR, claim paid ratio, and amount settlement ratio.

Understanding these terms can help you make informed decisions while choosing the right insurance provider.

Amount Settlement Ratio vs Claim Settlement Ratio

While the Claim Settlement Ratio (CSR) gives you the percentage of claims an insurer has settled based on number of claims, the Amount Settlement Ratio goes a step further by focusing on the monetary value of those claims.

This distinction is important, especially if you’re purchasing a high sum assured policy. An insurer might have a high CSR by settling many small-value claims, while larger claims may be delayed or rejected—bringing down the actual amount settled.

Example:

• Claims settled: 100 policies worth ₹10 crore
• Claims received: 120 policies worth ₹15 crore

CSR = (100 / 120) × 100 = 83%

But since ₹5 crore worth of claims (likely high-value ones) were not settled, the Amount Settlement Ratio would be significantly lower.

Why Both Ratios Matter:

• CSR = Reflects the frequency of claim approval
• Amount Settlement Ratio = Reflects the value of claims approved

If you’re investing in a large cover, check both ratios to ensure your insurer doesn’t just settle more claims—they settle the right ones, too.

Where Can You Check Claim Settlement Ratios?

To make informed insurance decisions, it’s important to review the Claim Settlement Ratios (CSRs) published by IRDAI—the Insurance Regulatory and Development Authority of India.

Every year, IRDAI releases an annual report that provides detailed insights into how insurance companies are performing in terms of settling claims.

The report includes:

• Claim Settlement Ratios of both life and general insurance companies
• Number of claims received, settled, repudiated (rejected), or pending
• Amount settled vs amount claimed
• Customer grievance data

You can access the latest annual report directly from the IRDAI official website.

Insurance Company	CSR (%)
LIC of India	98.52%
HDFC Life	99.39%
ICICI Prudential	97.82%
SBI Life	96.76%

*Note: These figures are subject to change each year. Always check the most recent IRDAI report before making a decision.

By reviewing these stats, you get a clear view of how reliable an insurer is when it comes to settlement of claims.

How to Interpret CSR While Choosing a Policy

The Claim Settlement Ratio (CSR) is a key indicator of an insurer’s reliability, but it shouldn’t be your sole deciding factor. A high CSR looks good, but without context—like consistency over the years or the volume of claims—it can be misleading. For a smarter decision, assess CSR along with claim size, transparency, and customer service quality.

To use CSR smartly, consider the following points:

Things to Look For:

• CSR above 95% is generally considered excellent and a good starting benchmark.
• Check consistency over 3–5 years. One strong year could be an outlier; sustained performance is what counts.
• Review claim volume—a 99% CSR on 500 claims is less reliable than 98% on 50,000 claims. Volume builds credibility.
• Read the fine print—some insurers maintain high CSRs by rejecting claims on technicalities. Choose insurers known for transparent and ethical practices.

By analyzing CSR alongside other factors like claim amount ratios, customer reviews, and service reputation, you can choose an insurance provider that’s not just fast—but fair.

Common Reasons for Claim Rejections

A high insurance claim settlement ratio may indicate reliability, but it doesn’t guarantee that every claim will be approved. Many claims still get rejected due to avoidable errors or oversights during the policy lifecycle.

Here are some of the most common reasons why claims are denied:

• Incomplete or false disclosures at the time of buying the policy
• Delays in filing the claim beyond the stipulated time frame
• Missing or inadequate documentation during the claim process
• Exclusions clearly mentioned in the policy terms and conditions
• Lapsed policies due to non-payment of premiums or missed renewals

Pro Tip: Always provide complete and honest information when applying for insurance. Review your policy regularly and stay updated on exclusions or terms to ensure your claim isn’t rejected when it matters most.

How the Claim Settlement Process Works

Here’s a quick overview of how settlement of claims typically happens:

1. Claim Intimation

The nominee or family must inform the insurer as soon as possible after the policyholder’s death (for life insurance) or after an event (in health/general insurance).

2. Document Submission

Documents like policy bond, death certificate, ID proof, medical records, etc., must be submitted.

3. Claim Evaluation

The insurer verifies all documents and may conduct internal investigations if needed.

4. Claim Decision

• If everything is in order, claim is approved and paid
• If discrepancies arise, it may be delayed or rejected

5. Claim Payout

Approved claims are paid to the nominee via bank transfer within the IRDAI-mandated timeline (usually within 30 days of receiving all documents).

Final Thoughts: Choose Wisely, Protect Fully

At the end of the day, life insurance is a promise—a commitment to protect your family’s future when you’re no longer around. But that promise is only as good as the company that backs it.

So before you get lured by low premiums or high returns, take a moment to check the insurer’s claim settlement ratio and claim paid ratio. It’s not just a number—it’s peace of mind.

How Fincart Helps

At Fincart, we don’t just sell policies—we help you understand what truly matters. Our certified advisors guide you in selecting insurance policies based on authentic parameters like CSR, amount settlement, solvency ratios, and more.

Transparent comparisons
Policy matching with goals
Support during claim process

Let us help you make insurance decisions that your family can count on—today and tomorrow.

The Jio BlackRock Nifty 50 Index Fund uses Aladdin – BlackRock’s “supercomputer for asset managers” – but does it really help in a passive index fund?

One of my clients recently asked this question. Throught to reply to his question through this article.

Jio BlackRock uses Aladdin, which is like a supercomputer for asset managers, while some other fund managers don’t. If we compare a Nifty 50 Index Fund managed by Jio BlackRock with a similar fund from another AMC, what advantages could an investor get by choosing Jio’s fund? Does Aladdin provide any special benefit?

The Jio BlackRock Nifty 50 Index Fund comes with a unique selling point — it uses Aladdin, BlackRock’s in-house “supercomputer for asset managers.” According to marketing, Aladdin helps in risk management, portfolio analytics, and investment decisions. But if you are a retail investor looking at a passive index fund, does this high-tech tool really give you any tangible advantage? In this article, we’ll explore what Aladdin is, how it works, and whether it matters for investors in the Jio BlackRock Nifty 50 Index Fund.

Jio BlackRock Nifty 50 Index Fund – Can Aladdin Supercomputer Help?

What is Aladdin?

Aladdin (Asset, Liability, Debt, and Derivative Investment Network) is BlackRock’s proprietary platform, often called a “supercomputer for asset managers.” It combines portfolio management, risk analytics, and trading systems into one platform. Essentially, it helps asset managers:

1. Analyze risks in portfolios.
2. Optimize investments across thousands of securities.
3. Simulate market scenarios for better decision-making.
4. Monitor compliance and regulatory requirements.

In short, Aladdin is a high-tech toolkit for professional money managers, allowing them to manage trillions of dollars efficiently and with precision.

How Does This Relate to Jio BlackRock Nifty 50 Index Fund?

The Jio BlackRock Nifty 50 Index Fund is a passive fund, meaning it tracks the Nifty 50 index rather than actively picking stocks. Theoretically, any Nifty 50 index fund will deliver returns close to the index, minus fund expenses.

Here’s the key question: Does Aladdin improve returns for a passive index fund?

• In active funds, Aladdin can help managers identify risks and opportunities, potentially improving returns.
• In passive index funds, there’s no active stock-picking — the fund buys all Nifty 50 stocks in the same proportion as the index.

So, Aladdin’s risk analytics, trade optimization, or scenario simulations have very limited impact on the actual returns of a passive index fund. The performance is mostly determined by:

1. Index performance (Nifty 50 in this case).
2. Fund expenses (expense ratio).
3. Tracking error — how closely the fund follows the index.

Tracking Error: Where Technology Might Help

One area where Aladdin could help is minimizing tracking error.

Using a sophisticated platform like Aladdin might help the fund efficiently rebalance its holdings during corporate actions, dividends, or index rebalancing.
However, most modern fund houses already use advanced systems for this. So while Aladdin is impressive, it is not the only way to achieve low tracking error.

Comparing With Other Index Funds

If you compare Jio BlackRock Nifty 50 Index Fund with other Nifty 50 index funds (e.g., UTI, ICICI Prudential, HDFC), you’ll notice:

1. Expense ratios are often the biggest factor.
   • Lower expense ratios directly improve your returns over the long term.
2. Tracking error varies minimally among large fund houses.
   • Most established AMCs already keep tracking error low.
3. Technology like Aladdin is nice-to-have, not must-have.
   • Retail investors don’t see a huge difference in actual portfolio returns just because a fund uses Aladdin.

In other words, the fund’s management technology is rarely a decisive factor for passive investors.

Should You Consider Aladdin When Investing?

Here’s a practical perspective:

• Focus on what matters: expense ratio, fund size, liquidity, and tax efficiency.
• Aladdin is a bonus, not a necessity: It’s a cool marketing point, but it does not guarantee higher returns in a passive index fund.
• Don’t chase tech alone: Many good Nifty 50 index funds do not have Aladdin but perform just as well.

Key Takeaways for Investors

1. Passive index fund returns are mostly index-driven.
2. Aladdin is BlackRock’s proprietary platform that helps with risk and portfolio analytics.
3. Technology impact is limited for index funds, more relevant for active management.
4. Focus on fund expenses, tracking error, and simplicity rather than fancy marketing tools.
5. For most retail investors, any low-cost Nifty 50 index fund will give similar returns.

Conclusion

The Jio BlackRock Nifty 50 Index Fund may sound attractive with its Aladdin “supercomputer,” but for a passive investor, this is more of a branding edge than a real investment advantage. The real drivers of returns are market performance, expense ratios, and tracking efficiency.

If you’re considering investing in Nifty 50 index funds, don’t get swayed by high-tech marketing. Instead, focus on low-cost, transparent, and well-managed funds that suit your long-term goals. Aladdin is impressive, but it’s not a magic wand for beating the market in a passive index fund.

Retirement often comes with fixed incomes and rising expenses. For seniors, every dollar counts, and missing out on available utility rebates can leave hundreds—or even thousands—on the table each year. Despite the widespread availability of programs designed to reduce costs for older adults, many retirees either don’t know they exist or fail to apply.

Utility rebates can cover electricity, gas, water, and even internet services, helping seniors stretch their budgets while staying comfortable and safe at home. Knowing which programs are available and how to access them can make a significant difference in your monthly expenses. Here are nine utility rebates that seniors frequently overlook.

1. Low-Income Home Energy Assistance Program (LIHEAP)

LIHEAP is a federal program created to help low-income households pay heating and cooling bills. Many seniors qualify automatically based on income, but some don’t realize that even modest savings can make them eligible. L

IHEAP benefits vary by state and season but often cover electricity and gas bills, heating oil or propane, and emergency repairs for heating and cooling systems. Applying is usually straightforward, but missing deadlines or failing to provide required documentation can prevent eligible seniors from receiving assistance.

2. State-Specific Energy Rebates

In addition to federal assistance, many states offer their own energy rebate programs. These programs can include discounts on monthly electricity or natural gas bills, incentives for energy-efficient appliances, or rebates for home weatherization and insulation.

Programs vary widely from state to state, and seniors sometimes overlook them because they assume federal assistance covers everything. Checking your state’s public utility commission website is an important first step to uncover additional savings.

3. Utility Company Senior Discounts

Some utility companies provide automatic or optional senior discounts for customers over a certain age, often 60 or 65. These discounts can apply to monthly electric, gas, or water bills, as well as sewer and sanitation fees, and may even include late fee waivers.

While the amounts may seem modest, they add up over the course of a year and can make budgeting easier. Many seniors miss these discounts simply by not asking or failing to fill out the required forms.

4. Water Bill Assistance Programs

Water and sewer costs can be surprisingly high, especially in urban areas. Some municipalities offer senior-specific rebates or discounts on water usage, including reduced base rates for seniors, bill credits for fixed-income households, or emergency relief during droughts or rate hikes.

These programs often require an application and proof of age or income, so retirees who don’t check with their local water authority may never receive the benefit.

5. Energy Efficiency Incentives

Investing in energy-efficient appliances or home upgrades can generate both long-term savings and immediate rebates. Seniors frequently miss out on programs that offer cash back for replacing old appliances such as refrigerators, heaters, or water heaters, rebates for installing energy-efficient windows or insulation, or discounts on smart thermostats and LED lighting. Even small upgrades can result in lower monthly utility bills, making the initial investment worthwhile.

6. Renewable Energy Rebates

Some utility companies and state programs incentivize the adoption of renewable energy sources such as solar panels or solar water heaters. Seniors who qualify can benefit from upfront rebates on installation costs, net metering credits for solar electricity fed back into the grid, and tax incentives combined with state programs. These programs are often underutilized because retirees assume renewable energy is too expensive or complicated, yet rebates can cover a substantial portion of the initial cost.

7. Telephone and Internet Assistance

While many seniors focus on electricity and gas, communication services are also eligible for rebates or low-cost plans. Programs like Lifeline Assistance provide discounts on phone or internet services for low-income seniors, and some providers offer age-specific promotions or fixed-income pricing. Combined billing discounts for bundling services can also reduce monthly expenses. With more seniors relying on internet services for telehealth, social connection, and finances, these rebates can be especially valuable.

8. Weatherization Assistance Programs

Weatherization programs are designed to improve home energy efficiency, often at little or no cost to the senior. Benefits include insulation upgrades, air sealing, and draft-proofing, as well as furnace or water heater repairs. Improving energy efficiency lowers monthly utility bills, sometimes dramatically. Many seniors miss out because they are unaware of eligibility or assume the program only applies to renters or low-income households.

9. Emergency Utility Assistance

Unexpected spikes in utility bills due to storms, heat waves, or cold snaps can create financial stress. Some communities offer emergency assistance specifically for seniors, providing short-term bill relief during extreme weather, grants for urgent repairs or replacement of heating and cooling equipment, and temporary reprieve from service shut-offs. These programs are often not widely advertised, leaving retirees unaware that help is available when they need it most.

Why Seniors Often Miss Out on Rebates

Even when programs exist, seniors frequently fail to take advantage. Common barriers include lack of awareness, complex applications, assumptions about eligibility, and communication gaps. Many retirees do not know the programs exist, are intimidated by paperwork or documentation requirements, assume they don’t qualify due to modest assets or income above poverty lines, or miss notices sent electronically or through channels not commonly used by older adults.

Being proactive—researching available programs, asking utility providers, and seeking guidance from local senior centers—can help overcome these obstacles.

Maximizing Savings: A Practical Approach

To make the most of utility rebates, seniors should compile a comprehensive list of all utilities, including electricity, gas, water, sewer, internet, and phone services. Eligibility should be checked annually, as programs may change from year to year and may require renewals or new applications. Contacting providers directly to ask about senior-specific discounts, rebates, or energy efficiency programs is also essential.

Leveraging local resources such as senior centers, area agencies on aging, and social service offices often provides up-to-date information, while keeping thorough records of applications, approvals, and rebate amounts can prevent confusion or missed renewals.

Every Dollar Counts in Retirement

Seniors are missing out on hundreds of dollars in utility rebates every year simply because they don’t know what’s available or how to apply. By taking the time to research federal, state, and local programs and by keeping abreast of annual changes, retirees can significantly reduce their living expenses without sacrificing comfort or safety. Utility rebates may seem small individually, but when combined, they can have a substantial impact on retirement budgets, freeing funds for healthcare, travel, or other essential expenses.

Are you taking full advantage of all the utility rebates available to seniors in your area, or could you be leaving money on the table each year?

Read More:

7 Little-Known Tax Credits That Seniors Often Miss

Why These States Are Slashing Utility Subsidies for Seniors

The Roth IRA is one of the best investment vehicles available, which is one reason why they limit your contribution based on your modified adjusted gross income.

Normally, if you’re under the income limits, a single filer can contribute $7,000 for 2025 ($8,000 if you are age 50 and older). If you make more than $150,000 but less than $165,000, the contribution limit is decreased as you move up that income spectrum. If you make more than $165,000 – you are not permitted to contribute to a Roth IRA. (For married filing jointly, the income phaseout is $230,000 to $240,000)

But there are still ways for you to get money into a Roth IRA if you exceed the income limits.

😍 If you are looking for a Roth IRA, here are our favorite Roth IRA brokerages.

Table of Contents

1. Roth 401(k)
2. Roth Conversion
3. Backdoor Roth Conversion
4. Mega-backdoor Roth Conversion
5. Consult a Tax Professional

Roth 401(k)

While not technically a Roth IRA, it still benefits from the tax treatment of a Roth IRA but in 401(k) form. If your employer offers it, it’s a great way to essentially get a supercharged Roth IRA because there are no income limits and the contribution limit is $23,500 in after-tax funds. Those ages 50 and up can contribute an extra $7,500 while those ages 60-63 can contribute up to $11,250 more.

This limit is shared with your traditional 401(k) so make sure you plan for this accordingly.

Roth Conversion

A Roth conversion is when you convert a tax-deferred account, like a traditional IRA, into a Roth IRA. You can convert all of it or just part of it and you’ll owe income tax on the amount you convert. This includes your original contributions plus any appreciation or dividends that have accrued. If you contributed after-tax dollars to a traditional IRA, those will not be taxed on conversion.

If you convert a mixture of pre-tax and post-tax dollars, the pro rata rule says you pay taxes based on the percentage of pre-tax and post-tax dollars in all of your IRA accounts. You can’t “pick” to convert just the post-tax dollars.

Another thing to remember is that the conversion has its own five-year holding period (for the purposes of calculating penalties if you withdraw the funds before 59.5) that starts on January 1st of the year you make the conversion.

🤔 Remember, when you withdraw funds from a Roth IRA, the IRS assumes you’re taking out contributions first, then conversions (in order of oldest to youngest), then earnings.

Backdoor Roth Conversion

A backdoor Roth conversion is a special name for a Roth conversion where you contributed dollars into a traditional IRA but never took the tax deduction, thus making them after-tax contributions. It’s titled backdoor because other than a few extra logistical steps, you’ve essentially contributed into a Roth IRA.

You can convert the Traditional IRA into a Roth IRA at any time but if you invest your funds while in the Traditional IRA, any gains are subject to income taxes.

OK so why the extra name? Because there’s a bit of IRS ambiguity here.

There is what’s known as a “step-transaction rule,” where the IRS can treat a series of transactions as a single transaction. It’s pretty obvious that the multiple steps you’re taking is to get around the income limits of a Roth IRA. So far, the IRS hasn’t provided guidance on this and so speak with a tax professional to fully understand your risks.

Also, remember the pro rata rule above? If you have Traditional IRAs with pre-tax money, you’ll have to pay income taxes even if you convert another Traditional IRA that consists solely for post-tax contributions.

Mega-backdoor Roth Conversion

Mega!

It’s called Mega-backdoor because it’s like the Roth Conversion above except it relies on your employer and your 401(k) – which provides a much higher MEGA limit (it’s $70,000 for 2025). 😂

The basic gist is that you make after-tax contributions to your 401(k) or similar plan and then convert that into a Roth IRA or Roth 401(k). Pre-tax contributions limit you to $23,500 per year but if your employer allows after-tax, that increases the limit to $70,000.

This, of course, means your employer must allow after-tax contributions into a 401(k). If they don’t, sorry, you’re out of luck for a mega-backdoor. This is different than an after-tax contribution to a Roth 401(k) as it’s subject to the $23,500 limit – though that’s still pretty good.

Next, you have to find out whether they will allow you:

• rollover funds into a Roth IRA while you’re still working there
• perform an in-plan rollover into a Roth 401(k)

If so, you can do the mega-backdoor.

1. Max out your pre-tax contributions to get the employer match
2. Contribute after-tax dollars up to the $70,000 limit
3. Convert into a Roth as you would other conversions – in-plan into a Roth 401(k) is simplest but if you can’t do that, transfer the pre-tax money out to a Traditional IRA and the post-tax money out to a Roth IRA

Consult a Tax Professional

Everyone’s tax situation is different and there are many moving parts to this type of decision, so I recommend speaking with a tax professional to find out what the best move is for you.

The purpose of this article is to help you understand the options if you earn more than the income limits and still want to take advantange of a Roth IR.

My other post listed 2026 401k and IRA contribution and income limits. I also calculated the inflation-adjusted tax brackets and some of the most commonly used numbers in tax planning for 2026 using the published inflation numbers and the same formula prescribed in the tax law.

2025 2026 Standard Deduction

You don’t pay federal income tax on every dollar of your income. You deduct an amount from your income before you calculate taxes. Over 80% of all taxpayers take the standard deduction. The other 10-20% itemize deductions when their total deductions exceed the standard deduction. In other words, you’re deducting a larger amount than your allowed deductions when you take the standard deduction. Don’t feel bad about taking the standard deduction!

The basic standard deduction in 2025 and 2026 is:

	2025	2026 (Projected)
Single or Married Filing Separately	$15,750	$16,100
Head of Household	$23,625	$24,150
Married Filing Jointly	$31,500	$32,200

People who are age 65 and over have a higher standard deduction than the basic standard deduction.

	2025	2026 (Projected)
Single, age 65 and over	$17,750	$18,150
Head of Household, age 65 and over	$25,625	$26,200
Married Filing Jointly, one person age 65 and over	$33,100	$33,850
Married Filing Jointly, both age 65 and over	$34,700	$35,500

The 2025 Trump tax law raised the standard deduction for 2025. The increases are reflected in the tables above. It also introduced a new senior deduction for people age 65 and over. The senior deduction is in addition to the standard deduction. It isn’t part of the standard deduction. See Social Security Is Still Taxed Under the New 2025 Trump Tax Law for more on the senior deduction.

People who are blind have a higher standard deduction.

	2025	2026 (Projected)
Single or Head of Household, blind	+$2,000	$2,050
Married Filing Jointly, one person is blind	+$1,600	$1,650
Married Filing Jointly, both are blind	+$3,200	$3,300

Source: IRS Rev. Proc. 2024-40, One Big Beautiful Bill Act, author’s calculations.

2025 2026 Tax Brackets

The tax brackets are based on taxable income, which is AGI minus various deductions. The tax brackets in 2025 are:

	Single	Head of Household	Married Filing Jointly
10%	$0 – $11,925	$0 – $17,000	$0 – $23,850
12%	$11,925 – $48,475	$17,000 – $64,850	$23,850 – $96,950
22%	$48,475 – $103,350	$64,850 – $103,350	$96,950 – $206,700
24%	$103,350 – $197,300	$103,350 – $197,300	$206,700 – $394,600
32%	$197,300 – $250,525	$197,300 – $250,500	$394,600 – $501,050
35%	$250,525 – $626,350	$250,500 – $626,350	$501,050 – $751,600
37%	Over $626,350	Over $626,350	Over $751,600

Source: IRS Rev. Proc. 2024-40.

The 2025 Trump tax law raised the top of the 10% and 12% brackets in 2026 by a little less than 2% above the normal inflation adjustments. The projected 2026 tax brackets are:

	Single	Head of Household	Married Filing Jointly
10%	$0 – $12,400	$0 – $17,700	$0 – $24,800
12%	$12,400 – $50,375	$17,700 – $67,450	$24,800 – $100,750
22%	$50,375 – $105,675	$67,450 – $105,650	$100,750 – $211,350
24%	$105,675 – $201,775	$105,650 – $201,750	$211,350 – $403,550
32%	$201,775 – $256,225	$201,750 – $256,200	$403,550 – $512,450
35%	$256,225 – $640,575	$256,200 – $640,550	$512,450 – $768,650
37%	Over $640,575	Over $640,550	Over $768,650

Source: Author’s calculations.

A common misconception is that when you get into a higher tax bracket, all your income is taxed at the higher rate and you’re better off not having the extra income. That’s not true. Tax brackets work incrementally. If you’re $1,000 into the next tax bracket, only $1,000 is taxed at the higher rate. It doesn’t affect the income in the previous brackets.

For example, someone single with a $70,000 AGI in 2025 will pay:

First 15,750 (the standard deduction)	0%
Next $11,925	10%
Next $36,550 ($48,475 – $11,925)	12%
Final $5,775	22%

This person is in the 22% tax bracket, but only a tiny fraction of the $70,000 AGI is taxed at 22%. Most of the income is taxed at 0%, 10%, and 12%. The blended tax rate is only 9.8%. If this person doesn’t earn the final $5,775, they are in the 12% bracket instead of the 22% bracket, but the blended tax rate only decreases slightly from 9.8% to 8.7%. Making the extra income doesn’t cost this person more in taxes than the additional income.

Don’t be afraid of going into the next tax bracket.

2025 2026 Capital Gains Tax

When your other taxable income (after deductions) plus your qualified dividends and long-term capital gains are below a cutoff, you will pay 0% federal income tax on your qualified dividends and long-term capital gains under this cutoff.

This is illustrated by the chart below. Taxable income is the part above the black line, after subtracting deductions. A portion of the qualified dividends and long-term capital gains is taxed at 0% when the other taxable income plus these qualified dividends and long-term capital gains are under the red line.

The red line is close to the top of the 12% tax bracket but they don’t line up exactly.

	2025	2026 (Projected)
Single or Married Filing Separately	$48,350	$49,450
Head of Household	$64,750	$66,200
Married Filing Jointly	$96,700	$98,900

For example, suppose a married couple filing jointly has $70,000 in other taxable income (after deductions) plus $30,000 in qualified dividends and long-term capital gains in 2025. The maximum zero rate amount cutoff is $96,700. $26,700 of the qualified dividends and long-term capital gains ($96,700 – $70,000) is taxed at 0%. The remaining $30,000 – $26,700 = $3,300 is taxed at 15%.

A similar threshold exists on the upper end for qualified dividends and long-term capital gains. When your other taxable income (after deductions) plus your qualified dividends and long-term capital gains are above a cutoff, you will pay 20% federal income tax instead of 15% on your qualified dividends and long-term capital gains above this cutoff.

	2025	2026 (Projected)
Single	$533,400	$545,500
Head of Household	$566,700	$579,550
Married Filing Jointly	$600,050	$613,650
Married Filing Separately	$300,000	$306,800

Source: IRS Rev. Proc. 2024-40, author’s calculations.

Net Investment Income Tax

Net Investment Income Tax (NIIT) is a 3.8% tax on the portion of interest, dividends, and capital gains that makes your modified adjusted gross income exceed these thresholds:

	MAGI Threshold
Single	$200,000
Head of Household	$200,000
Married Filing Jointly	$250,000
Married Filing Separately	$125,000

These thresholds are fixed by law. They are not adjusted for inflation. You pay a 3.8% tax on the amount your MAGI exceeds these thresholds or your total interest, dividends, and capital gains, whichever is less.

Suppose you’re married filing jointly and you have a $300,000 MAGI, which includes $10,000 in interest, dividends, and capital gains. Although your MAGI exceeds the $250,000 threshold by $50,000, you will pay 3.8% in NIIT on only $10,000 because you have only $10,000 in net investment income.

Suppose you’re married filing jointly and you have $260,000 MAGI, which includes $150,000 in interest, dividends, and capital gains. Although you have $150,000 in net investment income, you will pay 3.8% in NIIT only on $10,000 because your MAGI exceeds the $250,000 threshold by only $10,000.

2025 2026 Estate and Trust Tax Brackets

Estates and trusts have different tax brackets than individuals. These apply to non-grantor trusts and estates that retain income as opposed to distributing the income to beneficiaries. Grantor trusts (including the most common revocable living trusts) don’t pay taxes separately. The income of a grantor trust is taxed to the grantor at the grantor’s tax brackets.

Here are the tax brackets for estates and trusts in 2025 and 2026:

	2025	2026 (Projected)
10%	$0 – $3,150	$0 – $3,300
24%	$3,150 – $11,450	$3,300 – $11,700
35%	$11,450 – $15,650	$11,700 – $16,000
37%	over $15,650	over $16,000

Source: IRS Rev. Proc. 2024-40, author’s calculations.

2025 2026 Qualified Charitable Distributions (QCD) Limit

People older than 70-1/2 can make Qualified Charitable Distributions (QCD) from their Traditional IRA directly to qualifying charitable organizations. QCDs count toward the Required Minimum Distribution (RMD).

The total QCDs can’t exceed $108,000 in 2025. The limit will go up to $111,000 in 2026.

The QCD limit is per person. If you’re married and both you and your spouse are over 70-1/2, you can make QCDs up to the limit separately from your respective IRAs.

Source: IRS Rev. Proc. 2024-40, author’s calculations.

2025 2026 2027 Medicare IRMAA

People on Medicare Part B and Part D pay a higher Medicare premium when their Modified Adjusted Gross Income from two years ago crosses certain thresholds. I track these in Medicare IRMAA Premium MAGI Brackets.

2025 2026 Gift Tax Exclusion

Each person can give another person up to a set amount in a calendar year without having to file a gift tax form. Not that filing a gift tax form is onerous, but many people avoid it if they can. This gift tax exclusion amount will stay the same at $19,000 in 2025 and 2026.

	2025	2026 (Projected)
Gift Tax Exclusion	$19,000	$19,000

Source: IRS Rev. Proc. 2024-40, author’s calculations.

The gift tax exclusion is counted by each giver to each recipient. As a giver, you can give up to $19,000 each in 2025 to an unlimited number of people without having to file a gift tax form. If you give $19,000 to each of your 10 grandkids in 2025, you still won’t be required to file a gift tax form. Any recipient can also receive a gift from an unlimited number of people. If a grandchild receives $19,000 from each of his or her four grandparents in 2025, no taxes or tax forms will be required.

2025 2026 Savings Bonds Tax-Free Redemption for College Expenses

If you cash out U.S. Savings Bonds (Series I or Series EE) for college expenses or transfer to a 529 plan, your modified adjusted gross income must be under certain limits to get a tax exemption on the interest. See Cash Out I Bonds Tax Free For College Expenses Or 529 Plan.

Here are the income limits in 2025 and 2026. The limits are in a phase-out range. You get a full exemption if your income is below the lower number in the range. You get no exemption if your income is above the higher number in the range. You get a partial exemption if your income falls within the range.

	2025	2026 (Projected)
Single, Head of Household	$99,500 – $114,500	$101,750 – $116,750
Married Filing Jointly	$149,250 – $179,250	$152,650 – $182,650

Source: IRS Rev. Proc. 2024-40, author’s calculations.

The Lok Sabha has passed the revised Income Tax (No. 2) Bill, 2025, marking the most significant overhaul of India’s direct tax laws in over six decades. This new legislation will replace the Income Tax Act, 1961, aiming to simplify tax provisions, reduce complexity, and address modern-day financial realities.

A Leaner, Clearer Law

The new Income Tax Bill has been rewritten in a cleaner, more organized format. The aim is to make it easier for taxpayers to read, understand, and comply with, without having to wade through complex legal jargon. This means quicker clarity on rules, fewer grey areas, and less dependence on technical interpretations.

According to experts, this simplified drafting will make it easier for individuals to understand their tax obligations without deep legal expertise. The government has incorporated most of the 566 recommendations made by a Parliamentary Select Committee led by Baijayant Panda, as well as inputs from industry stakeholders.

Key Provisions Impacting Taxpayers

1. No Change in Tax Rates
   The Bill retains the new tax regime announced in Budget 2025. Taxpayers will still have the option to choose between the old and new regimes based on their financial planning needs.
2. Clear Tax Exemption on Commuted Pension
   Lump-sum pension payments from specific approved funds (like the LIC Pension Fund) now have a clear tax deduction. This ensures parity in tax treatment between employees and certain non-employee pension recipients.
3. Refunds for Late Filers
   The earlier provision that denied income tax refunds if the return was filed after the due date has been removed. This change is expected to benefit taxpayers who miss deadlines due to genuine reasons.
4. Relief for LLPs, Charitable Trusts & Transfer Pricing
   
   • The Alternate Minimum Tax for Limited Liability Partnerships (LLPs) has been removed.
   • Restrictions on charitable trusts have been rolled back, allowing reinvestment of capital gains and spending of funds in the following year.
   • Transfer Pricing rules have been eased by narrowing the definition of “Associated Enterprises” to remove subjectivity and reduce litigation.
5. Clarity on Deductions for House Property Income
   The Bill clarifies how standard deduction is calculated after municipal tax payments and how pre-construction interest is treated for let-out properties.

Expanded Powers for Tax Officials

The revised Bill increases the powers of income tax officers during search and seizure operations. Here’s what it means in practice:

• Access to digital data – Officials can ask for passwords or access codes to your phone, laptop, or online accounts.
• Bypassing security – If you don’t share them, they can override the security to access your data.
• Scope of search – This can include emails, social media messages, chats, and other stored information.

The government says this will help catch tax evasion hidden in emails, chats, or other digital records. However, some experts and MPs have raised concerns about privacy and the possibility of misuse.

Why It Matters for You

For most taxpayers, the immediate effects will be in clearer rules, fewer ambiguities, and some welcome reliefs—particularly in pension taxation, refund eligibility, and property income deductions. However, the expanded enforcement powers mean individuals and businesses should be even more mindful about record-keeping and compliance.

Bottom Line

The Income Tax Bill 2025 is not just a legal rewrite—it’s an attempt to make India’s tax laws simpler, clearer, and more aligned. While it offers several taxpayer-friendly changes, it also comes with enhanced scrutiny powers for authorities. Staying compliant, organised, and aware of your rights will be key in this new tax landscape.

Also Read: New UPI Rules Effective August 1, 2025: What You Need to Know

Gilt Funds vs Gilt Constant Maturity Funds—this is a common dilemma for investors looking to invest in government securities through mutual funds. Both these fund types invest primarily in government bonds but differ in their portfolio strategies and risk profiles. In this article, we analyze 19 years of historical data from two popular SBI gilt funds to help you understand their performance, average maturity trends, and which option might be better suited for your investment goals.

Gilt Funds vs Gilt Constant Maturity Funds: Which Is Better?

When investors seek debt mutual funds backed by the Government of India with zero credit risk, Gilt Funds and Gilt Constant Maturity Funds often come into the picture. Although both invest primarily in Government securities (G-Secs), their risk-return dynamics and portfolio characteristics differ significantly.

In this article, we will provide a comprehensive comparison of Gilt Funds vs Gilt Constant Maturity Funds, referencing SEBI’s definitions, rolling return data from the oldest funds in each category, and a practical case study to understand which one might suit your investment goals better.

What Are Gilt Funds?

Gilt Funds are debt mutual funds that invest at least 80% of their corpus in Government securities of varying maturities. These funds carry very low credit risk because the underlying securities are backed by the central government. However, they are exposed to interest rate risk depending on the average maturity of their holdings.

SEBI Definition:

“A Gilt Fund will invest a minimum of 80% of its total assets in Government securities across maturities.”

This flexibility allows fund managers to adjust the portfolio between short-term and long-term G-Secs depending on their interest rate outlook.

What Are Gilt Constant Maturity Funds?

Gilt Constant Maturity Funds invest at least 80% of their corpus in Government securities with a fixed maturity horizon, typically targeting a portfolio duration of 10 years. This makes them more sensitive to interest rate movements but potentially more rewarding during falling interest rate cycles.

SEBI Definition:

“A Gilt with 10-year Constant Duration Fund will invest a minimum of 80% of its total assets in G-Secs such that the Macaulay duration of the portfolio is equal to 10 years.”

Such funds effectively mimic a long-term government bond index, providing transparent interest rate sensitivity and consistent duration exposure.

Key Differences Between Gilt and Gilt Constant Maturity Funds

Parameter	Gilt Fund	Gilt Constant Maturity Fund
Investment Composition	G-Secs of any maturity	G-Secs with ~10-year constant maturity
Interest Rate Sensitivity	Moderate	High
Risk	Low credit risk, medium interest rate risk	Low credit risk, high interest rate risk
Potential Return in Falling Rates	Moderate	High
Suitable For	Moderate-term investors	Long-term, risk-tolerant investors

To compare and understand the risk and returns, I have taken two funds of the SBI Mutual Fund company. One is SBI Magnum Gilt and the one is SBI Magnum Gilt Constant Maturity Fund. I have taken the daily NAV data from 3rd April 2006 to the last available NAV data. This forms around 19 years of daily data points (around 4695). Let us first understand the drawdown of both the funds.

In the initial years, you noticed that the drawdown is more for SBI Magnum Gilt Vs SBI Magnum Gilt Constant Maturity Fund (especially before 2017). I will explain the reason for this later.

Now, let us look into rolling returns for 1 year, 3 years, and 5 years period.

You noticed that for 1-year rolling returns, up to 2017, SBI Magnum Gilt looks more volatile than SBI Magnum Gilt Constant Maturity Fund. The same follows for 3-year rolling returns and 5-year rolling returns.

Why Was SBI Magnum Gilt More Volatile Before 2017 and Not Now?

Looking at average maturity trends sheds light on this:

SBI Magnum Gilt Fund — Average Maturity Trend

• Pre-2017: The fund held longer-duration securities, often with maturities around 12-14 years to maximize yield and capital gains potential during falling interest rates.
• Post-2017: SEBI’s recategorization introduced stricter guidelines, prompting the fund to reduce average maturity to around 5-7 years, lowering interest rate risk and aligning with the Gilt Fund category’s risk profile.

SBI Magnum Gilt Constant Maturity Fund — Average Maturity Trend

• Maintained a relatively stable average maturity consistently around 8-10 years, reflecting its constant maturity mandate.

Average Maturity Summary (Approximate)

Year	SBI Magnum Gilt Fund	SBI Magnum Gilt Constant Maturity Fund
2014	12 – 14 years	9.5 – 10.5 years
2016	13 – 14 years	10 years
2017 (SEBI Recategorization)	10 years	10 years
2018	7 – 8 years	9.8 – 10 years
2020	6 – 7 years	10 years
2023	5 – 6 years	9.9 – 10 years

Taxation of Both Funds

Both categories are taxed as debt funds:

• Short Term (holding < 3 years): Taxed at individual income tax slab rate.
• Long Term (holding > 3 years, investments before 1 April 2023): 20% capital gains tax with indexation.
• For investments on or after 1 April 2023: Taxed as per slab rates without indexation (Budget 2023 change).

When to Choose Which?

Scenario	Suitable Fund Type
Want stable returns, less volatility	Gilt Fund
Expect falling interest rates	Gilt Constant Maturity Fund
Long-term horizon (>10 to 15 years)	Gilt Constant Maturity Fund
Medium-term goals (5 to 7+ years)	Gilt Fund
Low risk tolerance	Gilt Fund
Want to play interest rate cycles	Gilt Constant Maturity Fund

Risks to Keep in Mind

• Gilt Funds carry interest rate risk, especially if duration is extended during falling rate bets.
• Constant Maturity Funds can suffer sharp NAV declines in rising rate environments due to high duration.
• Neither fund type suits very short-term goals or investors expecting equity-like returns.

Final Verdict – Which is Better?

There’s no absolute winner. Your choice depends on:

• Your investment horizon
• Your risk appetite
• Your interest rate outlook

For investors willing to tolerate volatility for higher returns in falling rate cycles and with a long time frame, Gilt Constant Maturity Funds can deliver superior results.

For those preferring relatively stable NAVs and moderate risk, traditional Gilt Funds remain attractive.

Both have important roles in a diversified debt portfolio, especially after credit crises in other debt categories, providing a safer haven for capital preservation.

Conclusion

Don’t pick debt funds solely on past returns. Understand your goals, risk tolerance, and time horizon. Use rolling return data for insights into consistency rather than point-to-point gains.

Gilt and Gilt Constant Maturity Funds serve distinct purposes — and selecting the right one can positively impact your long-term debt investment strategy.

Refer to our earlier articles on Debt Mutual Funds Basics at “Debt Mutual Funds Basics“