Namaskar Sir, My daughter is B.Tech in ECE from state govt. engg college passed in 2018. She got admission in M. Tech. VLSI design in NIT surathkal through GATE in 2020. After 4 months in the same year she got a job in Indian Railways as a Junior Engineer level 6. She left M. Tech and joined in Indian Railways becauce she was posted near home town. She obtained more than 90% marks in std. X and std. XII. Sir, your guidance is required for her future.

Ans: Your proactive approach towards securing financial independence and planning for your children’s education is commendable. At 39, you have a robust salary, structured expenses, and disciplined investments. Let's examine your financial standing, assess your goals, and outline strategies for optimal growth and security.

Current Financial Overview
Monthly Income: Rs 2.25 lakh

Home Loan EMI: Rs 60,000 (new loan of Rs 30 lakh)

Household Expenses: Rs 50,000

Monthly SIP in Mutual Funds: Rs 35,000 (split across large, mid, small-cap, and debt funds)

You have taken significant steps with a home purchase and ongoing SIPs. Let’s optimise these resources to achieve financial independence and build a corpus for your children’s education.

Goal-Based Financial Planning
1. Higher Education Corpus for Children
Education expenses rise significantly due to inflation, particularly for quality higher education.

With your sons aged 8 and 3, plan for their higher education in 10-15 years.

To achieve this, increase your SIPs in equity-focused funds. Equities provide inflation-beating returns over the long term.

Maintain a systematic approach, with SIPs focused on growth-oriented funds (large and mid-cap funds are ideal).

Regularly review this corpus every 2-3 years to ensure it aligns with educational costs.

2. Financial Independence
Early financial independence requires strategic savings and investment growth.

Aim to build a corpus that covers at least 25 times your annual expenses.

At present, Rs 50,000 monthly expenses indicate a future goal corpus of Rs 1.5-2 crore, adjusting for inflation.

Your current SIPs are a great start, but gradually increase SIPs to achieve a sizeable retirement fund.

Consider adding more equity exposure for growth and inflation protection, while adding debt as retirement nears.

Debt Management and EMI Strategy
Home loan EMI is Rs 60,000, a significant commitment for 20 years. This can limit cash flow for other investments.

Aim to prepay your loan when possible to reduce interest outflow and loan tenure.

You may consider setting aside a small portion of bonuses or salary hikes for periodic prepayments.

Reducing debt earlier will provide more cash flow to focus on investments.

Optimising Your SIP Strategy
Equity Allocation: Your SIP allocation is split 40:30:20:10 across large, mid, small, and debt categories.

Large-cap funds offer stability, while mid and small caps drive growth. The debt allocation provides balance but may be increased as you approach retirement.

Avoid Index Funds: Index funds, while popular, lack active management, which can be limiting. Actively managed funds adjust to market conditions, providing a higher potential for returns. Certified Financial Planners (CFP) can guide you on the best funds for your goals, particularly with growth in mind.

Consider Regular Funds Over Direct: Regular funds provide personalised guidance, performance reviews, and rebalancing through Certified Financial Planners, which direct funds lack. Regular investments managed by certified experts offer better long-term growth.

Building Contingency and Protection
1. Emergency Fund
Ensure an emergency fund covering 6-12 months of expenses (about Rs 4-6 lakh), kept in easily accessible accounts like liquid funds.

This fund will protect your long-term investments in case of unexpected expenses.

2. Insurance Needs
Adequate life and health insurance are essential, especially with dependents and ongoing liabilities.

Life insurance should cover at least 10 times your annual income, which could be achieved with a simple term insurance policy.

Health insurance for the family is essential to avoid dipping into savings during medical emergencies. Ensure coverage is comprehensive to handle inflation in healthcare.

Tax Efficiency in Investments
New tax rules affect mutual fund capital gains. For equity funds, long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term capital gains (STCG) are taxed at 20%.

Debt mutual funds are taxed as per your income slab. Plan to withdraw strategically to minimise tax impact.

Periodic portfolio reviews and structured withdrawals can help reduce your tax liability.

Nurturing Long-Term Wealth Growth
PPF and Debt Instruments: PPF and debt mutual funds provide stability but may fall short on inflation-adjusted growth. Maintain debt instruments as a smaller part of your portfolio until retirement nears.

Equities for Wealth Accumulation: Equities remain ideal for long-term goals like retirement and education due to their inflation-beating growth.

Review your mutual fund choices periodically to ensure they are high-performing and aligned with your growth goals.

Final Insights
Achieving financial independence and funding your children’s education are achievable with disciplined investments, a focus on growth, and debt management. Regular monitoring, along with a Certified Financial Planner’s advice, will ensure you stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: I am really very happy to see the positive mind frame of yours. I do think teaching ( i.e. College Teaching) will be the best job for you. At a time you and teach and counsel. Please don't be unsure about your capacity, from your writing it is crystal clear that you do have the required capacity to do M.Phil and Ph.D. Only your age is a bit high, because if you do M.Phil and Ph.D then it will take at least six years time and by that time you will be 35. If you are ready you can apply to some Universities of Germany for doing Ph.D directly. There M.Phil is not required. In Germany for ladies education is free. Only you need to have knowledge of primary German language for a smooth sailing. In school there is little bit use of Psychology, because the subject of Psychology is not there.
Your next step will be having a permanent job. Unless the basic needs are assured you can't concentrate. In India very few persons get job satisfaction. So if you appear for the state PSC exam, you may crack it, but Psychology won't be there, you may be a Deputy Collector or Sales Tax Officer with periodic transfer and lot of respect cum status. But don't be morose. Even being in other job you can give free counselling of Psychology online free of cost just to pursue your hobby. My basic answer is that first grab a full time job and then pursue your passion. Right now don't go for M.Phil and Ph.D.Higher degrees and age are proportional to each other. In last five years you must have completed M.Phil and started Ph.D. But no point in lamenting over the spilt milk. So two option 1) Do Ph.D from Germany 2) Grab a Govt or Private job which is not contractual. Take proper decision. That is the most important thing in career building. Never go for split mind and never try for true option. Make your aim fix and target it and I am sure you will achieve it.
Now just procure a permanent job and pursue your hobby of Psychology.Best of Luck. Prof. Mukhopadhyay

Ans: 01. First of all, please confirm from your Form-26AS, whether this amount is being reflected there. I hope you have correctly mentioned your PAN & Assessment year correctly on the challan.
02. Minor Head 300 is for Self Assessment Tax & 400 is for Tax payment on demand.
03. You may try to change this minor head on Challan, within 30 days from the date of challan. For this process login to IT Site, go to services (Challan Corrections) & try to rectify.
In case you are not in a position to do the same, then please visit your Assessing Officer & request him to help you in making the corrections.
Most welcome for any further clarifications. Thanks.

Ans: 01. Purchase of a Residential house can have effect on your tax liability in case of LTCGs.
02. In case of STCGs deductions u/s 80-C can help reduce tax liability. It seems you have already made tax savings in this account.
Most welcome for any further clarifications. Thanks.

Ans: 01. Have you got intimation u/s 143(1) informing you, whether there is a Demand by the department or it has processed your ITR with Refund ?
The process of Refund will start only after that.
02. You are also requested to check, whether you have filed ITR with all complete details & these details are also supported by Form 26AS/AIS/TIS of the department.
03. If you have not received any intimation (Ref.point 01 above), you are requested to confirm from your site, whether your ITR has been processed or not. You can also request the department for re-issue Intimation u/s 143(1), in case assessment is complete.
Most welcome for any further clarifications. Thanks.

Ans: 01. Please note that in your case, provisions of Advance Tax are also applicable. Under these provisions, you have to pay tax quarterly during the financial year. It seems you have ignored those provisions. The demand raised seems to relate with advance tax payable.
Most welcome for any further clarifications. Thanks.

Ans: As per cost apportionment letter of NMDC to the exchanges, the cost of NMDC Steel should be considered as 57.29% of the price of NMDC shares acquired before demerger while NMDC shares acquisition cost may be considered as 42.71% of the price of NMDC shares acquired before demerger

Ans: I suggest you not to send him for under-graduate programme to USA. Let him be admitted to some reputed college/university of India for Computer/Electronics/Electrical Engg and let him go for f post-graduation ( i.e. MS from USA which is called graduation in USA). For Computer Engg one of the very good Universities is Georgia Tech, apart from that Texas A & M is there. Stanford and MIT are exceptionally good but for that his academic track record and GRE score have to be excellent.

Ans: Hi..please pay off your loans as soon as possible. Especially credit card loan. Your debt service to income ratio should never exceed 35% of your income. In your case it is 61.43% which is extremely high. You may consider refinancing your loan or arrange for any additional income source.