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Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on Oct 25, 2024

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Asked by Anonymous - Oct 22, 2024Hindi
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Please advise whether it is wise to withdraw PF and invest in Stock or Mutual Fund for the below scenario . Age 39, resigned from Indian MNC , while I was abroad, almost 3yrs ago and I understand PF interest will not be paid after 3yrs. (PF is held in the trust account of MNC) . While my PF is earning interest currently, my previous organisation is charging me 10% TDS. I might relocate to India in the future and might join an Indian company but I risk losing the benefit of earning interest until I join back in India. And, I lost the tax component charged as TDS for the interest earned in MF.

Ans: Hello, it all depends how much debt exposure you would like to take in your portfolio
At your age, you are going to have an active income for the next 15yrs, so your equity to debt exposure can be about 90% to 10%
And generally your debt exposure should be liquid for emergency purposes
Also for the TDS deducted for any reason, you can claim it back by filing the ITR regularly.
Do
let me know your views on this on my LinkedIn profile, attaching my profile :
https://www.linkedin.com/in/ca-vivek-lala-21a2038b?utm_source=share&utm_campaign=share_via&utm_content=profile&utm_medium=android_app
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Ramalingam

Ramalingam Kalirajan  |8164 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

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I have worked in India over 15 year and the company that I worked had deducted my PF from my salary and deposited in my PF account. 9 years back I left the job in India and relocated to Dubai. I didn't withdrew my PF and till certain period I was able to see my PF balance. Later I forgot about it and now when I try to login to my account, it doesnt allow me to login as my Aadhaar account was not linked to my PF account. I reached out to my employer and submitted all documents as suggested by my employer to activate my PF account and link my Aadhaar to my PF account . My question is, is it ok to keep my money in PF account until I turn 60/retirement age and withdraw the amount and take benefit of the pension fund. Or should I withdraw the amount now and invest it in FD or MF. I had not withdrawn my PF fund because I was aware that PF allow only 2/3rd of the PF fund to be withdrawn and 1 /3rd remain in the account under pension scheme that we receive as pension after retirement.
Ans: Your situation is quite common among professionals who have relocated abroad. It's great that you are considering your options wisely. Let's explore your options and see what might work best for you.

Understanding Your Provident Fund (PF)
Your Provident Fund (PF) is a long-term savings scheme to provide benefits during retirement. You have a significant amount accumulated from your years of service in India.

Keeping Money in PF Until Retirement
Leaving your money in the PF account until retirement has certain advantages.

Benefits of Keeping Money in PF
Safety and Security: PF is a government-backed scheme, offering high security.

Tax-Free Interest: Interest earned on PF is generally tax-free until withdrawal.

Regular Pension: Upon retirement, you will receive a regular pension from the Employees’ Pension Scheme (EPS).

Potential Drawbacks
Lower Liquidity: Funds are locked in until you reach retirement age, limiting access.

Inflation Impact: The fixed interest rate may not always keep pace with inflation.

Withdrawing PF and Investing Elsewhere
Alternatively, you can withdraw your PF and invest it in other instruments like Fixed Deposits (FD) or Mutual Funds (MF).

Benefits of Withdrawing and Investing
Higher Returns Potential: Mutual funds, especially equity funds, have the potential for higher returns.

Diversification: Investing in different instruments can spread and reduce risk.

Liquidity: Investments in mutual funds and FDs are more liquid, allowing easier access to funds.

Risks to Consider
Market Volatility: Equity mutual funds can be volatile and subject to market risks.

Tax Implications: Withdrawals from PF before 5 years of continuous service are taxable.

Evaluating Fixed Deposits (FD)
Fixed Deposits (FD) are a safe investment option but have their own pros and cons.

Benefits of FDs
Safety: FDs are low-risk and provide guaranteed returns.

Fixed Interest: You know exactly how much interest you will earn over the term.

Drawbacks of FDs
Lower Returns: FDs typically offer lower returns compared to equity mutual funds.

Taxable Interest: Interest earned on FDs is taxable, reducing net returns.

Evaluating Mutual Funds (MF)
Mutual funds can offer better returns, especially if you choose actively managed funds.

Benefits of Mutual Funds
Higher Returns Potential: Over the long term, mutual funds, especially equity funds, can provide substantial returns.

Professional Management: Fund managers handle investments, aiming to maximise returns.

Diversification: Mutual funds spread investments across various assets, reducing risk.

Disadvantages of Index Funds
Average Returns: Index funds mimic market indexes and provide average returns, which may not be optimal.

Lack of Flexibility: They cannot adapt to market changes like actively managed funds can.

Less Protection in Downturns: Index funds cannot avoid poorly performing sectors or stocks.

Choosing Between Direct and Regular Funds
When investing in mutual funds, it’s important to choose between direct funds and regular funds.

Disadvantages of Direct Funds
No Advisory Support: Direct funds lack guidance from a Certified Financial Planner (CFP).

Time-Consuming: Managing and choosing the right funds requires significant time and knowledge.

Higher Risk of Missteps: Without professional advice, the risk of making suboptimal choices increases.

Benefits of Regular Funds
Professional Guidance: Investing through a CFP provides expert advice tailored to your goals.

Regular Monitoring: A CFP regularly reviews your portfolio, making necessary adjustments.

Optimised Portfolio: CFPs ensure your investments align with your risk profile and goals.

Deciding the Best Course of Action
To decide whether to keep your PF or withdraw and invest, consider the following:

Personal Financial Goals
Time Horizon: If you have a long-term horizon, mutual funds might be suitable for higher returns.

Risk Tolerance: Assess your comfort level with market volatility and risks.

Financial Needs
Liquidity Needs: Consider if you need access to funds before retirement.

Tax Considerations: Evaluate the tax implications of withdrawing your PF and the tax benefits of other investments.

Conclusion
Deciding whether to keep your PF until retirement or withdraw and invest in other options depends on your financial goals, risk tolerance, and need for liquidity. Keeping your PF offers security and a regular pension, while withdrawing and investing in FDs or mutual funds could potentially offer higher returns. Consulting with a Certified Financial Planner can provide personalised guidance and help optimise your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Dr Nagarajan Jsk

Dr Nagarajan Jsk   |305 Answers  |Ask -

NEET, Medical, Pharmacy Careers - Answered on Mar 29, 2025

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Career
What are the chances to get merit out in afcat for flying branch if you've cleared all stages till medical but with a slightly average written marks?
Ans: Hi Gaurav,
Greetings.
Whenever we decide to take an entrance exam, it’s important to review the guidelines thoroughly. Like other entrance exams, CDAC has provided details on their website regarding the examination process. Admission is based on the vacancies available in the respective areas, and candidates will be admitted after a proper evaluation.

As you mentioned, there are several stages that candidates must clear for admission, if a candidate achieves average marks (Point 8a. (v) In order to rationalise the marks scored by candidates appearing in different shifts in an objective manner through a statistical method, before declaration of result marks scored by candidates will be Normalised based on the formula ), it can be challenging to predict their likelihood of admission. The Air Force has the discretion to set qualifying marks for any or all subjects of the examination. Below are points extracted from CDAC to provide more clarity about the admission process.

Sometimes, they may even consider a second cut-off if necessary ( Based on organizational requirements, IAF may impose a second cut-off for particular branch and call additional eligible candidates for SSB testing. These candidates will be shortlisted purely based on order of merit for the particular branch. That particular branch should be one of the choices submitted by the candidate at the time of registration. The candidature of candidates thus shortlisted, will be valid for that particular branch only and not for any other branch. In the overall Order of Merit, they will be placed below the last candidate qualifying the First AFCAT cut off marks {Para 9(a) above}. If successful in the selection process, these candidates will be inducted into that particular branch only, subject to vacancies and order of merit. These candidates would be required to submit an undertaking to this effect).

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Nayagam P

Nayagam P P  |4401 Answers  |Ask -

Career Counsellor - Answered on Mar 29, 2025

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My daughter scored 94.62 percentile in IIT JEE mains exam 2025 session 1. She belongs to general category. Which colleges she have chances to get admission
Ans: Dr, Here is, How to Predict Your Daughter's Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide

Once the January JEE Main session results are declared, many students and JEE applicants start asking common questions about eligibility for specific institutes (NITs, IIITs, GFTIs, etc.) based on their percentile, category, preferred branch, and home state.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Daughter's Admission Chances Using JoSAA Data
Step 1: Collect Your Daughter's Key Details
Before starting, note down the following details:

Her JEE Main percentile
Her category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Her Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.
Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your daughter's admissions!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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