Should I Invest in Capital Gain Bonds or Fixed Deposits? My Father (Age 75) Sold Land and Earned Capital Gains.

Ans: Gold Bonds do not qualify for tax exemption under IT Section 54EC which other bonds do.

Ans: Property in Joint Name
Net Proceeds: Rs. 27 lacs
Prepaid Home Loan: Rs. 27 lacs
Calculate capital gains on your share.
Property in Wife's Name
Net Proceeds: Rs. 10 lacs
Calculate capital gains considering her holding period and purchase price.
Capital Gains Bonds Investment
Timeline
You need to invest in capital gains bonds within six months. This helps save on capital gains tax.

Bond Selection
Invest in government-approved capital gains bonds. They offer a safe way to defer taxes.

Best Investment Options for Balance Amount
Diversified Equity Funds
Equity Funds provide long-term growth. They suit your medium risk appetite.

Balanced Advantage Funds
Balanced Funds offer stability and growth. They mix equity and debt for balanced returns.

National Pension System (NPS)
You already have NPS. Consider increasing your contribution. It offers tax benefits and retirement savings.

Public Provident Fund (PPF)
PPF is a safe long-term investment. It offers tax benefits and assured returns. Increase your contributions here.

Benefits of Actively Managed Funds
Professional Management
These funds are managed by experts. They aim to outperform the market.

Higher Returns Potential
Actively managed funds often deliver better returns than index funds.

Disadvantages of Index Funds
Limited Flexibility
Index funds follow the market. They don’t adapt to market changes.

No Active Management
Index funds lack active management. This limits their growth potential.

Disadvantages of Direct Funds
Lack of Guidance
Direct funds lack professional advice. This can be challenging for investors.

Time-Consuming
Managing direct funds requires time and knowledge. This may not suit everyone.

Final Insights
Investing your capital gains wisely is crucial. Use capital gains bonds for tax savings. Diversify your remaining funds in equity, balanced funds, NPS, and PPF. Actively managed funds offer better growth. Avoid index and direct funds due to their limitations. Regularly review and adjust your investments.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Just wanted to understand, was the land in your brothers name when he passed away. If yes, then has the distribution happen as per your brothers written Will in place. If not, then as per Hindu Succession Act, it goes to Mother, Brothers wife and brothers children in equal proportions.

Only if none are present it goes to siblings unless you have taken proper NOC from Mother and Brothers wife.

Assuming this is in place, yes your portion of 15 lacs will be subjected to capital gains tax unless reinvested in 54EC bonds or residential house property (assuming conditions are satisfied).

Please consult your CA before moving ahead.