Ask Us: Emergency fund,HRA

Emergency fund is either liquid cash or other investment allocated for this specific purpose so that it can be easily liquidated should the need arise. This is meant for emergencies which can be a medical emergency,a cash crunch,sudden job loss etc. In an ideal scenario,emergency fund should be equivalent to at least 6 times your monthly salary.

The idea is that it can help you meet any kind of emergency and sustain you financially for a couple of months.

Due to a sudden job transfer,I had to shift to my mother’s house. Can I name my mother as landlord to avail HRA? Is it legal?

—D P Negi,Pune

Yes,you can go ahead and pay rent to your mother and claim HRA on it. It is legal to claim HRA when you live in your parent’s home. However do remember that she needs to account for the rent income and pay tax on it,according to her tax liabilities.

Is it possible to sell a home with a loan amount outstanding on it?

—Sonali Saha,Kolkata

It is possible to sell a home while you are still paying a home loan for it. Obtain a written confirmation of the loan amount outstanding on your home loan from your bank. You can then request the new buyer to write a cheque for the amount to the bank directly. Alternatively you can repay in full and obtain an account closure or no dues remaining certificate from your bank before you make the sale.

Which foreign exchange rate is considered for currency conversion when a credit card is used abroad. Is it applicable on the day I made the purchase or on the day of settlement?

—Dhrampal Singh,Chandigarh

If you had made your purchase say on February 3 and if the retailer’s bank routes it to the VISA gateway on Feb 5,foreign exchange rate applicable on Feb 5 is taken into consideration. This is the case with every bank and is standard.

—The expert is CEO,Bankbazaar.com
For your personal finance queries please email at expressmoney@expressindia.com