Hi Sir, I am currently earning 1 lakh per month Regarding the investment purpose i am having a house loan emi per month, also doing fixed deposit after every 3-4 months and also investing in ppf and nps I cannot invest in term life insurance due my medical issues and cannot also invest in medical insurance for parent they are also facing medical issues so what can be done in this case monthly around 16k tax is getting deducted

Ans: You seem to be on the right track with your tax-saving strategies! Here's a breakdown and some suggestions to potentially reduce your monthly tax deduction:

Current Deductions:

NPS (Section 80CCD(1B)): This allows an additional deduction of up to Rs.50,000 on top of the Rs.1.5 lakh limit under Section 80C.
Section 80C Investments: Great! You're utilizing the full Rs.1.5 lakh limit for deductions on various investments like PPF, ELSS Mutual Funds etc.
Medical Insurance (Section 80D): This covers premiums paid for health insurance for yourself.
Potential Additional Deductions:

House Rent Allowance (HRA): If you pay rent, check if you can claim an HRA exemption. This can significantly reduce your taxable income. The exempted amount depends on your rent payment, city type, and your salary structure.
Leave Travel Concession (LTA): If your employer provides Leave Travel Allowance (LTA), ensure you utilize it for travel and submit the necessary proofs to claim exemption.
Interest on Home Loan (Section 24): If you have a home loan, you can claim deductions for the interest paid on the loan amount.
Here are some additional tips:

Review your Investment Choices: Ensure your Section 80C investments are spread across different options to balance risk and return.
Professional Tax (PT): Since you mentioned monthly deductions, it's possible a part of it might be Professional Tax (PT). PT varies depending on your state and salary.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hi,

With your salary, you can claim the following:
1. HRA - already done by you
2. 80C - 1.5 lakhs done by you
3. Home Loan Deduction - can be done
4. Sec 80D - Health Insurance and medical checkup for self, family and parents

Doing donation or any other investment just to save tax is not a wise idea. Best is to invest smartly so that you can generate good returns with time.
You and no1 can escape from this vicious cycle of paying income tax.

If you need help with investments, can consult a professional Certified Financial Planner - a CFP who can guide you with exact funds to invest in keeping in mind your age and risk profile.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/

Ans: You are doing really well at 35. Your income is strong, and you already started some investments. You also have clarity on your future goals. That is an excellent foundation. You want Rs.1 lakh per month retirement income, child education and marriage fund, and you are considering buying land. I will give you a complete 360-degree financial plan.

» Current Positives
– You earn Rs.1.9 lakh per month, which is very healthy.
– Home loan balance is only Rs.15 lakh, manageable with current EMI.
– You already have Rs.12 lakh in PPF, which builds long-term safety.
– SIPs are started, though still small compared to income.
– Health insurance is in place, which protects your wealth.
– You are thinking ahead about child and retirement, very wise.

» Current Concerns
– Investments are small compared to your high income.
– Large part of surplus is sitting idle in savings account.
– New loan for land may add stress without good returns.
– Education and marriage fund for child need dedicated planning.
– Retirement plan is not yet structured.

» Emergency Fund
– Keep 6 months of expense as liquid reserve.
– Your monthly expense with EMI is about Rs.85k.
– So maintain Rs.5 to 6 lakh separately in liquid asset.
– This should not be mixed with investments.

» Protection Planning
– You already have medical insurance. That is good.
– Check if cover is enough for family including child.
– Term insurance is a must. Take at least Rs.1.5 to 2 crore cover.
– Premium will be affordable now and gives family safety.

» Home Loan Strategy
– Home loan EMI is Rs.32,400. Balance is Rs.15 lakh.
– With 7.85% rate, repayment is not very heavy.
– Prepayment is optional, as inflation-adjusted cost is low.
– Better to continue and use surplus for investments.
– Only consider prepayment if interest rate rises too much.

» Land Purchase Thought
– You plan for land with extra Rs.15k EMI.
– Please avoid land purchase for investment purpose.
– Real estate often locks money for long years.
– It does not give regular returns.
– Also, maintenance, legal risks, and liquidity issues are high.
– Instead, channel this Rs.15k into mutual funds for higher compounding.

» Child Education Planning
– Child is 3 years old. Education goal is 15 years away.
– Education cost grows much faster than normal inflation.
– For higher education, you may need Rs.60 to 80 lakh.
– You should start a dedicated SIP only for education.
– At least Rs.20k per month can go here.

» Child Marriage Planning
– Marriage goal is around 20 to 25 years away.
– You may need Rs.50 to 60 lakh.
– For this long goal, equity mutual funds work best.
– At least Rs.10k to 12k per month should be set aside.

» Retirement Planning
– You want Rs.1 lakh per month in retirement.
– You are 35 now. Retirement at 60 gives you 25 years.
– This needs a very big retirement corpus.
– Your PPF will help but not enough.
– Increase SIP towards retirement.
– At least Rs.35k to 40k per month should go into retirement plan.

» Investment Allocation Suggestion
– Total investable surplus is around Rs.1 lakh monthly.
– Suggested split:

Rs.20k – child education SIP.

Rs.12k – child marriage SIP.

Rs.38k – retirement SIP.

Rs.10k – gold for diversification.

Rs.10k – stocks if you have knowledge.

Rs.10k – extra buffer / annual vacation / lifestyle fund.

» Role of Mutual Funds
– Mutual funds should be the main driver of wealth.
– They provide diversification and professional research.
– Do not go for direct mutual funds.
– Direct funds give no guidance and no support during corrections.
– Regular funds through a Certified Financial Planner or distributor ensures handholding.
– This support is priceless in volatile markets.

» Why Not Index Funds
– Index funds only copy the index.
– They cannot beat the market.
– They give average return, not superior.
– During market crash, index falls equally.
– Active funds are better. Skilled manager can protect in bad times.
– Over long years, this makes big difference.

» Gold Allocation
– Keep 5 to 10% in gold.
– Use digital or sovereign gold.
– Gold acts as hedge in crisis.
– It balances portfolio when equity struggles.

» Stocks Allocation
– Direct stocks can be exciting.
– But they need time, knowledge, and discipline.
– Restrict them to 10% of portfolio.
– Do not put education or retirement money here.
– Only use extra risk money for stocks.

» Tax Awareness
– PPF gives tax deduction and safe return.
– Equity mutual fund long-term gains above Rs.1.25 lakh taxed at 12.5%.
– Short-term gains taxed at 20%.
– Debt funds taxed as per your slab.
– Plan holding period carefully to reduce tax outgo.

» Lifestyle Control
– With Rs.1.9 lakh income, lifestyle spending can increase quickly.
– Keep lifestyle growth under control.
– Increase SIPs with every salary hike.
– Lifestyle creep can eat into retirement savings.

» Annual Review
– Every year, check performance with Certified Financial Planner.
– Replace underperforming funds.
– Increase SIP if income grows.
– Adjust child fund and retirement fund as goals become clearer.

» Behavioural Focus
– Stay disciplined during market falls.
– Do not stop SIPs when markets are negative.
– That is when you accumulate more units.
– Wealth building is a marathon, not sprint.

» Estate Planning
– Make nomination in all accounts and policies.
– Write a simple Will to secure your child.
– This ensures smooth transfer in future.

» Finally
You have high earning power and young age. This combination is powerful. Avoid locking surplus in land. Instead, use mutual funds actively through regular plans with guidance. Build dedicated funds for retirement, education, and marriage. Keep insurance strong and maintain an emergency fund. With Rs.1 lakh monthly investments across goals, you can achieve retirement income and secure your child’s future. Discipline and regular review will make the journey smooth and successful.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: You have shared very clear details about your financial life. I appreciate your commitment towards family security and regular investing even with EMI and expenses. That shows discipline. You are balancing responsibility and growth. Let me give you a 360-degree view with structured guidance.

» Present Income and Expense Structure
– Your income is Rs. 1 lakh monthly.
– Children’s fees are Rs. 11,000 monthly.
– EMI of Rs. 30,000 for home loan.
– This means nearly 40% of income goes to fixed outgo.
– No emergency fund is currently available.
– This creates financial stress in case of sudden expenses.

» Home Loan Management
– Outstanding home loan is Rs. 18.5 lakh.
– EMI is manageable but still high share of income.
– You are thinking to pay Rs. 5 lakh lump sum next year.
– Prepayment reduces tenure and interest burden.
– That step is good, but it should not compromise safety buffer.
– Emergency fund should come first before part prepayment.
– Keeping at least 4 to 6 months’ expenses in liquid form is safer.
– After that, extra money can be used for prepayment.

» Emergency Fund Creation
– Emergency fund is most urgent need in your case.
– Without it, any medical or job issue can break stability.
– You should target minimum Rs. 4 to 6 lakh in safe liquid option.
– It should be accessible but separate from normal savings account.
– This fund ensures peace of mind and prevents loan dependency later.

» Insurance Protection
– You already have Rs. 70 lakh term insurance.
– For one earning member, coverage should be higher.
– Ideally 10 to 12 times annual income is safer.
– That means minimum Rs. 1.2 crore coverage.
– So you can consider enhancing term insurance.
– Health insurance for family is also very important.
– If only company cover is available, add personal family cover.

» Existing Investments Review
– You started with few policies through online platforms.
– One is Rs. 10,800 monthly in BSE 500 value 50 index.
– Another is Rs. 7,006 in a Nifty Alpha 30 fund.
– One more Rs. 3,000 since 2021 in HDFC fund.
– All are tied with 5-year payment terms.
– They are structured like ULIP or long lock-in schemes.
– ULIPs have high charges, limited flexibility, and moderate growth.
– They reduce long term wealth creation compared to mutual funds.

» Disadvantages of Index Based Funds
– Index funds just copy market index.
– They do not use professional research.
– They give average returns, never better than market.
– In volatile times, they fall without control.
– Actively managed funds use research, selection, and risk control.
– That improves long term wealth potential.
– You already invested in index based options.
– Better to avoid fresh money in such products.

» Problems with Direct Platforms
– Direct platforms like Policy Bazaar look cheap but lack full guidance.
– They don’t review suitability for your personal goals.
– No customised plan, only generic products.
– Regular mutual fund through Certified Financial Planner gives advice.
– CFP also monitors portfolio, rebalances, and supports tax planning.
– Cost difference is small, but value of expert support is huge.
– It avoids mis-selling and saves mistakes over long term.

» PF and Retirement Savings
– PF balance is Rs. 4 lakh now.
– Gratuity entitlement is Rs. 4.5 lakh.
– PF contribution is Rs. 15,000 monthly.
– NPS contribution is Rs. 7,000 monthly.
– Retirement savings foundation is already good.
– These will give you long term retirement security.
– But you also need flexible wealth for medium goals.

» New Investments Planning
– First priority is emergency fund.
– Second priority is insurance adequacy.
– Third priority is systematic mutual fund investment.
– You already pay high EMIs.
– So keep new investments limited till emergency fund is built.
– Once fund is ready, start monthly mutual funds of Rs. 10,000–15,000.
– Choose actively managed diversified funds.
– Invest through Certified Financial Planner for review and monitoring.
– Avoid locking money in ULIPs or index products again.

» Child Education Planning
– Children’s fees are ongoing.
– But future higher education costs will be high.
– You should start an education goal fund separately.
– Even Rs. 5,000 monthly in growth mutual funds can build corpus.
– Keeping education money separate avoids using it for other needs.

» Debt Versus Investment Choice
– You asked about using Rs. 5 lakh for loan.
– If you have no emergency fund, don’t prepay yet.
– If emergency fund is created first, then prepayment is fine.
– Loan EMI will end naturally in some years.
– Wealth growth requires longer compounding period.
– Balance both steps: create buffer and invest systematically.

» Cash Flow Control
– Track monthly expenses carefully.
– Try to save at least 20% of income after EMI.
– Small lifestyle control can release Rs. 10,000–15,000 monthly.
– This saving can go into investments for future goals.
– Without expense control, new investments become difficult.

» Tax Efficiency
– PF and NPS are tax efficient already.
– Mutual funds also give tax advantage.
– Long term equity gains up to Rs. 1.25 lakh yearly are tax free.
– Gains above that taxed at 12.5%.
– Debt fund gains taxed as per income slab.
– Plan redemption carefully with help of Certified Financial Planner.

» Mistakes to Avoid
– Don’t invest in too many products without clarity.
– Avoid mixing insurance with investment again.
– Avoid index funds for future allocations.
– Don’t keep money idle in savings account.
– Don’t ignore emergency fund again.

» Step by Step Roadmap
– Step 1: Build Rs. 5–6 lakh emergency fund in next 12–18 months.
– Step 2: Review and enhance term insurance cover to Rs. 1.2 crore.
– Step 3: Add health insurance if not done.
– Step 4: After buffer, start Rs. 10,000 monthly in actively managed mutual funds.
– Step 5: Keep separate child education fund with Rs. 5,000 monthly.
– Step 6: Consider prepayment of loan only if surplus above these.
– Step 7: Review all existing ULIP and policy investments after 5 years.
– Step 8: After lock-in, consider surrender and shift into mutual funds.

» Final Insights
– You are already disciplined and responsible.
– Right now your biggest gap is emergency fund.
– Insurance adequacy is second gap.
– After filling these, wealth growth becomes smooth.
– Your PF, gratuity, and NPS will secure retirement.
– Your home loan will get lighter over years.
– With systematic planning, you can protect family and grow wealth.
– Certified Financial Planner guidance ensures review and correction.
– Avoid random online products in future.
– This way your family will remain safe and secure.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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