Is an MTech in Biomedical Engineering at IIT Indore a good fit for my son?

Ans: Hello Shantanu
You have a chance in lower-tier Maharashtra colleges via CAP rounds; after CAP, target private or autonomous colleges like MIT-WPU, DY Patil, or VIT through non-CAP/institutional rounds.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: Hello dear
You can target lower NITs (Puducherry, Meghalaya) for core branches, newer IIITs and GFTIs for ECE/IT, under Gujarat home state quota in CSAB.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: Hello dear
You can expect branches like CSE in lower NITs/IIITs, IT/ECE in mid-tier NITs, or core branches in good NITs during CSAB rounds.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: Hello Jyoti
Preference order: (1) EEE @ Jalandhar (2) Electronics @ Calicut (3) VLSI @ Jalandhar. The final choice will be yours.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: Understanding Taxation on Fixed Deposit Interest

– Interest on fixed deposits is taxable under “Income from Other Sources.”
– Tax is not based on when interest is received.
– It is based on when the interest accrues.
– This is true even if the FD pays only at maturity.

? When Does Interest Accrue?

– Interest accrues every financial year, not just on maturity.
– Banks calculate interest every quarter or half-year.
– Even for reinvestment FDs, interest is earned yearly.
– The entire interest is paid at maturity, but accrues yearly.

? Taxation is Based on Accrual Method

– As per Income Tax Act, interest must be declared yearly.
– This is known as “accrual basis of taxation.”
– Ignoring this may result in tax demand and penalty later.

? Common Misunderstanding About Tax on FDs

– Many believe tax is due only when FD matures.
– This is incorrect under the Income Tax rules.
– This assumption may cause large tax outflow in maturity year.
– Also, it may attract interest and penalty from IT department.

? Your Obligation Each Year

– Every year you must estimate interest accrued.
– Add it to your total income while filing ITR.
– Pay tax as per your income slab on that amount.
– This is applicable even if the interest is not paid out.

? Where to Find Yearly Accrued Interest

– Ask your bank for yearly interest accrual certificate.
– Usually available in April each year.
– This helps in proper tax reporting in your return.

? Tax Deduction at Source (TDS) on FDs

– Banks deduct TDS if interest exceeds Rs. 40,000 per year.
– For senior citizens, this limit is Rs. 50,000.
– TDS is 10%, provided PAN is updated.
– If PAN is missing, TDS can be at 20%.
– TDS is not the final tax liability.
– You still need to calculate your slab tax.
– If you fall in higher tax slab, pay balance tax.
– If your slab is lower, claim refund of excess TDS.

? If You Ignore Annual Reporting

– Tax department can track FD accrual via Form 26AS.
– Interest is also shown in AIS (Annual Information Statement).
– If you don’t report interest, it raises red flags.
– In future scrutiny, you may face tax demand and penalty.

? Tax Planning Suggestions

– Ask bank for Form 16A or interest certificate every year.
– Add accrued interest to your income in your return.
– Pay self-assessment tax if needed before 31st July.
– This avoids last-minute surprise tax burden at maturity.
– Also avoids interest under section 234B and 234C.

? Impact on Overall Financial Planning

– FDs give assured returns but interest is fully taxable.
– This makes post-tax return low for many investors.
– Consider this tax aspect while comparing with other investments.
– For high income earners, debt mutual funds may be better.
– They offer indexation benefit and lower tax impact over time.

? Should You Break FD to Avoid Annual Tax?

– No need to break FD.
– Just declare interest every year properly.
– Even if maturity is far, show yearly interest accrual.
– Maturity proceeds will be tax-free if already declared yearly.

? Tax Filing and Documentation Tips

– Maintain record of FD opening date, amount and maturity date.
– Keep bank’s yearly interest certificate safely.
– While filing ITR, enter interest under “Income from Other Sources.”
– Match with AIS data to avoid mismatch.
– If mismatch found, explain with proof during ITR processing.

? What Happens on Maturity Year?

– In maturity year, you receive full interest and principal.
– But only declare the last year’s interest in ITR.
– Don’t report entire 6 years’ interest again.
– That would mean double taxation.
– Maturity amount already includes taxed portion.

? If You Missed Reporting in Earlier Years

– You can revise past returns for last 2 assessment years.
– File revised returns and pay tax with interest.
– Better to rectify voluntarily than face penalty later.

? Key Tax Rule to Remember

– Interest earned is taxable on accrual basis.
– Even if payment is made on maturity only.
– Pay tax each year, not just in maturity year.

? Ideal Tracking Practice

– Maintain Excel sheet for FD investments.
– Note FD amount, start and end date, and yearly interest.
– Add this value every year while filing your ITR.

? Benefit of Declaring Yearly Interest

– You avoid tax shock in final year.
– You avoid penalty, interest, and notice from IT department.
– You show income transparently.
– This helps in home loan, visa, and other financial proofs.

? Role of a Certified Financial Planner

– A CFP can help optimise tax-efficiency of your investments.
– Can help plan maturity of FD with other cashflows.
– Can suggest better options if tax is reducing returns.
– Regular reviews with a CFP help avoid such confusions.

? Disadvantages of Fixed Deposits

– Returns are low compared to inflation.
– Taxable every year.
– No indexation benefit.
– TDS cuts liquidity.
– Not suitable for long-term wealth creation.

? Alternative Options for Tax Efficiency

– Actively managed debt mutual funds offer better post-tax return.
– They allow better planning for income and withdrawals.
– Short-term and long-term capital gains can be staggered.
– Professional fund manager brings risk control.
– Certified Financial Planner and trusted MFD can help align these.

? Don’t Fall for Index Fund Hype

– Index funds offer low-cost but no flexibility.
– No scope of outperformance during market shifts.
– Poor downside protection in falling markets.
– Better to use actively managed funds guided by experts.
– This helps optimise portfolio across market cycles.

? Disadvantages of Direct Mutual Funds

– Direct plans need your own research and monitoring.
– No access to guidance from a certified mutual fund distributor.
– Most investors lack time or knowledge for this.
– Errors in fund selection or exit timing hurt returns.
– Regular plans via MFD give advice, handholding and long-term value.
– A CFP-aligned MFD ensures aligned goals, reviews and discipline.

? Don’t Rely on Endowment or Investment Policies

– If you hold LIC or Postal policies for investment, evaluate ROI.
– Most of them yield low post-tax returns.
– Consider surrender and reinvest into better options via SIPs.
– A Certified Financial Planner can help this switch efficiently.

? Final Insights

– Tax on FD interest must be paid every year, not just at maturity.
– Interest accrues yearly and is taxable even if not received.
– TDS doesn’t mean your full tax is paid.
– Declare interest each year in ITR.
– Collect interest certificate yearly for accurate tax filing.
– For better returns, explore tax-efficient debt mutual funds.
– Avoid direct funds and index funds without advice.
– Get professional support from CFP and trusted MFD.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: Hello Himanshu
Prefer CSE @ VIT Bhopal if possible.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: You have already taken thoughtful steps. Your goals are clear and well-prioritised. Now let’s do a complete 360-degree analysis.

Your profile shows that you are sincere and serious. Let us create a clear path forward.

? Income, Salary and Monthly Commitments

– Your net salary is Rs. 47,000 per month.
– NPS contribution of Rs. 5,000 is already deducted from salary.
– Loan EMI is Rs. 10,500 per month till June 2027.
– Monthly living expenses are between Rs. 25,000 and Rs. 30,000.
– LIC premium is Rs. 5,000 monthly.
– You have limited room for investment surplus right now.
– But this will improve after June 2027.

? Analysis of NPS Account

– NPS balance is Rs. 4 lakh as of now.
– You are contributing Rs. 5,000 monthly.
– That will continue till retirement in 2044.
– NPS is a disciplined and tax-efficient tool for retirement.
– Let it grow without any withdrawals.
– Avoid reducing the NPS contribution in future.
– After retirement, only 60% of the corpus will be tax-free.
– Remaining 40% may require annuity or structured withdrawal.
– NPS alone may not be enough for full retirement need.

? LIC Policy Assessment

– You pay Rs. 5,000 monthly till 2039.
– Policy offers Rs. 21 lakh maturity with Rs. 10 lakh death benefit.
– LIC is a mix of insurance and low-return savings.
– Estimated return is likely around 4% to 5% per year.
– You may consider surrendering this plan.
– Reinvest this into long-term mutual funds.
– Mutual funds offer higher returns and better flexibility.
– Insurance should always be separate from investments.
– Use term insurance for risk coverage.
– Use mutual funds for wealth creation.

? Review of PPF Account

– You are contributing a small amount irregularly.
– Current balance is Rs. 1.7 lakh.
– Maturity is due in 2033.
– PPF is safe and tax-free.
– But it offers modest returns of 7–7.5%.
– Use this only as part of your debt portion.
– Avoid treating it as your main growth engine.
– Increase contribution slightly if possible.
– But don’t overdepend on it for goals like education or retirement.

? Current Debt Structure and EMI Analysis

– EMI of Rs. 10,500 will end in June 2027.
– That’s about 25% of your current investable surplus.
– Once cleared, you will have higher monthly savings.
– Do not take another loan immediately after this one ends.
– Use that EMI amount for goal-based SIPs.
– Avoid using loan for buying car or land.
– Try to stay debt-free after 2027.
– That will help you build wealth faster.

? Insurance Planning Review

– LIC is not term insurance.
– You did not mention any pure term plan.
– Please buy one immediately with Rs. 50 lakh to Rs. 1 crore cover.
– It is low-cost and essential to protect your family.
– If anything happens to you, your son’s future is at risk.
– Term insurance is the best way to secure his education and upbringing.
– Review and ensure nominee names are correctly added.

? Goal 1: Your Son’s Education Planning

– Your son is 6 years old now.
– Engineering or medical education costs can be high.
– It may require Rs. 25–30 lakh or more in total.
– You have 10–12 years to plan this goal.
– Start a separate SIP dedicated only for this purpose.
– Choose diversified mutual funds with active management.
– Avoid direct or index funds.
– Direct funds lack expert guidance and periodic review.
– Index funds only copy market and offer no protection.
– Instead, regular mutual funds through a Certified Financial Planner are better.
– You will get yearly reviews and strategy adjustments.
– Increase SIP once your loan EMI ends in 2027.
– If possible, start with Rs. 3,000–5,000 monthly from now.
– Even this small start will grow with time.

? Goal 2: Buying a Car

– A car is a depreciating asset.
– It should never be bought with long-term loans.
– Try to buy a car with savings only.
– Delay the purchase till after 2027.
– You can set up a 3-year recurring deposit or short-term SIP.
– Use balanced or hybrid mutual funds for this goal.
– Do not disturb your son’s education corpus for car buying.
– Keep car budget simple and realistic.
– Avoid costly models with high EMI burden.
– Remember, a car is a comfort, not a goal.

? Goal 3: Buying a Piece of Land

– Real estate for living is a lifestyle choice.
– But do not treat it as an investment.
– Real estate lacks liquidity and transparency.
– Also, it brings added costs like stamp duty and maintenance.
– If you must buy land, do it only after key goals are covered.
– Never delay your child’s education or retirement for this.
– Avoid taking a big home loan again.
– If you still wish to buy land, start a separate SIP now.
– Use equity mutual funds with 8+ years horizon.
– Do not compromise your other long-term financial goals for land.

? Emergency Fund Planning

– You didn’t mention any emergency corpus.
– This is very important for salaried families.
– You need at least Rs. 1.5–2 lakh in liquid funds.
– Build this over the next 6–8 months.
– Use liquid or ultra-short mutual funds for this.
– Don’t keep money idle in savings bank account.
– This money is for medical, job loss, or family emergencies.

? Long-Term Retirement Strategy

– You retire in 2044, which gives 19 years.
– NPS will continue to grow till then.
– But NPS alone is not enough.
– Start a separate retirement-focused SIP now.
– Choose long-term equity mutual funds with active fund managers.
– Direct or index funds don’t give such customisation.
– Regular mutual funds via CFP-led guidance bring structure.
– Post 2027, increase retirement SIPs aggressively.
– Build two retirement sources – NPS and mutual funds.
– This dual structure gives tax and liquidity balance.
– Avoid any plans that mix insurance with retirement.

? Suggested Cash Flow Plan From Now

– Monthly net income is Rs. 47,000.
– EMI is Rs. 10,500 till 2027.
– LIC premium is Rs. 5,000.
– Expenses are Rs. 30,000 at max.
– That leaves very limited room today.
– Still, try SIP of Rs. 2,000–3,000 for your son’s goal.
– Also set aside Rs. 1,000 in liquid fund as emergency base.
– After EMI ends in 2027, divert that full amount to SIPs.
– Split that into retirement, car, and home planning SIPs.
– Don’t increase lifestyle expenses after loan closure.
– Instead, increase savings commitment.

? Maintain Financial Discipline

– Avoid borrowing for car, travel, or celebrations.
– Track all your expenses monthly using an app or diary.
– Update nominee details in all your accounts.
– Review all your investments every 6 months.
– Set financial reminders for SIP dates and insurance renewals.
– Don’t stop SIPs even if market goes down.
– Stay invested for long-term compounding.

? Benefits of Active Mutual Funds Over Index and Direct Funds

– Index funds copy market and offer no active strategy.
– They can fall badly when markets crash.
– They don’t help in risk reduction.
– Direct mutual funds are also risky for non-experts.
– They give no guidance, no regular review, and no help during crisis.
– Regular mutual funds through a Certified Financial Planner are better.
– You get yearly check-ups, goal mapping, and corrections.
– A planner keeps your emotions under control.
– That helps build long-term wealth safely.

? Finally

– You have good habits and clear goals.
– But some product choices need correction.
– Surrender the LIC and replace it with term insurance.
– Build your son’s education fund with SIP.
– Create a car fund only with savings.
– Don’t rush into land purchase.
– Build emergency fund and retirement fund gradually.
– After 2027, your cash flow will improve.
– Use that to increase SIPs and reach your goals easily.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: You are 30, married, salaried, and have Rs?1 lakh disposable monthly income. EMI on home loan is Rs?58,640, partly funded by parents. Rent is Rs?17,000. You invest Rs?15,000 monthly in small-cap SIPs. Your MF value is Rs?1.54 lakh, and stocks are Rs?2.44 lakh. Your priority is an emergency fund. You also aim to build long-term wealth and possibly buy a second home. Let us build a 360-degree plan, step by step:

? Emergency Fund Requirement and Planning

– You need an emergency fund of 6–12 months of expenses.
– Including rent and EMI, your monthly outgo is ~Rs?1.17 lakh.
– A 6-month fund would be ~Rs?7 lakh; 12-month fund ~Rs?14 lakh.
– Keep it in a mix of savings account and liquid mutual fund (regular plan).
– Start by saving Rs?10,000–20,000 monthly into these vehicles.
– Once you reach Rs?7 lakh, maintain it.
– Don’t use this fund for home purchase or investment.

? Review of Current Equity Allocation

– You invest in two small-cap funds currently.
– Small-cap funds are highly volatile.
– Overexposure can lead to risk, especially early in career.
– Your current MF portfolio of Rs?1.5 lakh may swing sharply.
– Consider switching some allocation into large-cap or balanced equity.
– Add a flexi-cap or multi-cap fund for diversification.
– We will restructure this later after emergency fund buildup.

? Direct Stocks Exposure

– Your stocks are Rs?2.44 lakh.
– Direct equity without constant tracking adds risk.
– Avoid adding more stocks for now.
– Consider shifting some equity into actively managed mutual funds.
– This gives better diversification and professional oversight.

? Goal: Build Long-Term Corpus

– Your long-term goal is financial independence.
– You also think of a second home eventually.
– Set time horizon: say 10–15 years for home and retirement.
– Once emergency fund is built, increase SIPs to Rs?25,000–30,000 monthly.
– Allocate across flexi-cap, balanced advantage, and moderate small-cap.
– Use regular plans via a Certified Financial Planner for guidance.

? Home Loan Dynamics

– EMI is high, but parents fund part of it.
– EMI remains manageable vs your disposable income.
– Prepayment shouldn’t be rushed.
– Focus on increasing investments first.
– When surplus grows, you can prepay in parts.
– This reduces loan term gradually without sacrificing flow.

? Planning for Second Home

– Particle planning is fine once emergency fund is ready.
– Given your EMI, rent, and savings capacity, wait 2–3 years.
– In that time, grow collateral through mutual funds.
– Aim for 20–30% down payment ready in 3 years.
– Avoid new home loan stress early in your journey.

? Mutual Fund Strategy and Structure

– Avoid index funds; they are passive and offer no downside buffer.
– Actively managed funds help manage risk dynamically.
– Stay invested through market cycles.
– Use regular plan via CFP or MFD to get review, not direct plans.
– Small-cap funds remain part of your portfolio, but reduce weight to 20% of equity.
– Add 40% in large/multi-cap and 40% in balanced advantage/flexi-cap funds.

? Monthly Investment Roadmap

Start with this structure after emergency fund is strong:

Flexi/Multi-Cap Fund: Rs?10,000 monthly

Large-Cap/Split between two funds: Rs?8,000

Small-Cap Fund: Rs?5,000

Balanced Advantage Fund: Rs?7,000

This gives equity allocation of ~Rs?30,000.
Add liquid fund SIP of Rs?10,000 until emergency corpus is fully built.
Shift RD gradually into these SIPs.

? Emergency Fund SIP vs RD

– Replace RD of Rs?3,000 monthly into liquid fund SIP.
– Add Rs?7,000 extra to reach emergency goal sooner.
– After emergency corpus is Rs?7 lakh, stop RD and continue equity SIPs.

? Debt Allocation for Short-Term Needs

– Keep Rs?20,000 monthly in liquid or short-term debt fund.
– This ensures liquidity and better returns than bank FD.
– Use it for unforeseen cash demands.

? Insurance Coverage Review

– No mention of health or life insurance yet.
– You are homeowner and husband; insurance is key.
– Buy term insurance of at least Rs?1 crore.
– Buy family health insurance covering spouse, with maternity/child cover.
– This gives protection in worst-case scenarios.

? Tax Considerations

– Home loan interest and principal repayment provide Section 80C and 24(b) benefits.
– Mutual fund LTCG above Rs?1.25 lakh taxed at 12.5%.
– STCG taxed at 20%.
– Plan equity redemptions smartly to minimise tax impact.
– Liquid fund exit tax depends on holding tenure and slab.
– Consider capital gains tax while planning future withdrawals.

? Goal-Based Asset Segmentation

Emergency Fund: Savings + liquid fund

Home Loan Prepayment/Advance: Paid from surplus after 2–3 years

Long-Term Corpus: Equity-heavy mutual funds

Second Home Savings: Equity + liquid mix aligned with a 5-year plan

This segmentation helps you see results and track progress.

? Periodic Review

– Every 6 months, review emergency corpus, SIP allocations, and goals.
– Rebalance equity vs debt if market fluctuations push overweight.
– Increase SIPs by 10% annually or with salary hikes.
– Track progress toward second home corpus.
– Adjust as life events occur.

? Final Insights

– Your financial base (Rs?1 lakh disposable) is strong.
– Slight changes in allocation help efficiency.
– Build emergency fund first (target Rs?7–10 lakh).
– Balance equity portfolio for growth and stability.
– Maintain EMI discipline; enhance investment flow gradually.
– Plan for second home after emergency safety.
– Add health and term insurance now.
– Keep tax implications in mind.
– Review and adapt as you progress.

You are ahead. With discipline and structure, you’ll meet both your goals.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: You invested Rs.?65?lakh in an under-construction flat (purchased Nov 2024, possession in Dec 2027). You’ve paid 50% and executed the sale deed. You sold a commercial property in June 2025 for Rs.?1.15?crore. You wish to know if gains from that sale can be used tax-efficiently by applying them toward your current flat purchase. Let’s explore carefully from all angles.

? What Is Your Capital Gain Status?

– You sold the commercial property in June 2025.
– That counts as a long-term capital asset.
– Indexation benefit applies if held for over 24 months.
– If bought more than 2 years earlier, it’s a long-term gain.

You can compute your taxable gain using indexed cost. This will reduce your tax liability significantly.

? Key Tax Rule: Exemption Using Reinvestment

– Section 54F allows exemption if you reinvest sale proceeds into a residential property.
– The new property must be purchased or under construction.
– You must invest within specified periods.

The flat you purchased in Nov 2024 is under-construction, so it may qualify. But detail matters.

? Conditions Under Section 54F

– You must invest the net sale proceeds fully into a residential property.
– You bought the new flat before or within 2 years of sale.
– You must complete construction within 3 years of sale.
– Unsurpassed funds become taxable.
– You must not hold more than one residential property at sale time.

Check off each:

You haven’t completed construction yet.

Purchase occurred before sale or within 2 years.

You must complete by June 2028 (i.e., within 3 years).

So far, you meet timelines.

? How Much Can You Exempt?

– Exemption is proportional to amount reinvested vs proceeds.
– If full proceeds are used, full gain is exempt.
– If only part is used, exemption is partial.

Your sale fetched Rs.?1.15?crore. You invested Rs.?65?lakh so far.
Thus Rs.?50?lakh remains to be invested by Dec 2027 or by sale of new flat (within 3 years).
Exemption equal to Rs.?65?lakh / Rs.?1.15?crore portion.
Balance gain above that proportion becomes taxable.

? Timeline You Should Meet

Sale date: June 2025 → 3-year window ends June 2028.
So you must complete construction and register possession transaction by June 2028.

Ensure builder’s possession date of Dec 2027 gives enough latitude.

? Using Capital Gain Account Scheme

– If you can’t invest full proceeds before filing ITR, you can deposit balance in Capital Gain Account Scheme.
– That deposited amount must be used within allowed period.
– Until used, exemption holds.

This helps meet exemption while ensuring proper use.

? What If You Don’t Reinvest Full Amount?

– Only the reinvested portion is exempt.
– Unused capital gain becomes taxable in that financial year.
– Therefore, plan whether to invest balance of Rs.?50?lakh.

? Long-Term Gain Tax Calculation Example

– Assume indexed profit was Rs.?40?lakh.
– If you reinvest Rs.?65?lakh fully, entire gain is exempt.
– If you reinvest Rs.?35?lakh only, exemption proportion = 35/115.
– Rest becomes taxable.

So invest wisely. Full exemption depends on complete reinvestment.

? Your Action Steps

– Ensure that new flat purchase is registered before June 2027.
– Keep track of total payments made before due date.
– After purchase, invest balance sale proceeds into Capital Gain Account Scheme if needed.
– Use deposit and payments toward construction by June 2028.
– At ITR filing, submit proof of purchase, payments, and bank statement of deposit.

Your tax officer will check these.

? Multiple Property or Joint Ownership?

– You should not hold any other new property at sale time.
– Joint ownership of original home is allowed.

If you already own another residential property before sale, then Section 54F exemption won’t apply.

? If Construction Gets Delayed

– If builder delays possession beyond Dec 2027, your exemption eligibility still holds as long as possession is before June 2028.
– If builder delays further beyond June 2028, your exemption may be in jeopardy.
– In that case, un-invested capital gain becomes taxable.

So keep proof of builder timeline and extension documents.

? What Happens on Flat Possession?

– After possession and registration, your flat becomes the asset for exemption.
– Any remaining funds deposited in CGAS must be withdrawn/used within allowed time.
– Copies of registration and builder receipts are needed at ITR time.

? If You Repay Loan Instead?

– You can use sale proceeds to pay loan on flat.
– This counts as investment in property.
– Accounts for Section 54F exemption.

This helps utilize funds fully while getting exemption.

? Importance of Record Keeping

– Retain sale deed and purchase deed.
– Keep all builder payment receipts.
– Maintain CGAS deposit challans.
– Builders estimates on completion timelines.
– These help support exemption claims.

Poor documentation may invite inquiries.

? Alternative: Invest into Capital Gain Bonds?

– Under Section 54EC, you can invest in specified bonds within 6 months of sale.
– But the lock-in is 5 years.
– And you can invest only up to Rs. 50 lakh in one financial year.
– These bonds offer exemption on gain only partially.

If you need liquidity soon, CGAS route is better.

? Consider Portfolio Re-balancing

– You already invested Rs.?65 lakh in real estate.
– That is now an illiquid asset.
– Remaining sale proceeds should fund new flat (an asset for same purpose).
– Do not extend to investment property.
– Keep any extra funds in mutual funds for future goals.

That builds long-term wealth and liquidity.

? Mutual Funds vs Real Asset Balance

– Real estate helps save tax via Section 54F.
– But real estate is not a productive investment.
– Mutual fund SIPs offer better return, liquidity, and diversification.
– Once you complete flat investment, any residual amount should go into actively managed equity funds.
– This avoids over-exposure to property and boosts net worth.

? Role of a Certified Financial Planner

– CFP can draft your tax filing plan.
– They ensure exemption is claimed properly.
– They optimise reinvestment and use of CGAS.
– They also crafting your post-leverage portfolio structure.
– They guide review of mutual funds for future goals.

Your situation merits full CFP involvement.

? Timing: When to File ITR?

– Sale happened in FY?2024–25; file ITR after March 2026.
– If you complete flat purchase by Dec 2027, report in ITR FY?2027–28.
– Or deposit in CGAS before due of ITR FY?2024–25 to claim in that year.

Work with your taxation team to align documentation.

? Final Insights

– You qualify for Section 54F exemption for your under-construction flat.
– Exemption is proportional to reinvestment amount in flat.
– Invest full Rs.?1.15?crore sale proceeds to fully exempt tax.
– If you fall short, can use CGAS till June 2028.
– Maintain records of payment and possession.
– Avoid holding another residential property.
– Post-construction, SEBI the residual should be parked in equity.
– MF investments give better growth and liquidity.

Your current plan is workable. Just follow timelines and documentation to secure your exemption.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment