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29-Year-Old Earning Rs.1 Lakh/Month - How to Plan for Future Savings and Retirement at 58?

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 02, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jul 28, 2024Hindi

Money

Hello sir I am 29 yrs old ,earning 1 lakh pm in hand salary, have approx 3 lakh in PF account, MF, 65 K, 20 lakh personal loan EMI 42 K for next 6 years, how to plan for future, savings and retirement at 58 with 1 lakh pm pension or 7 can say earnings

Ans: Your Current Financial Picture

Age: 29 years old
Monthly salary: Rs. 1 lakh in hand
PF account: Rs. 3 lakh
Mutual Funds: Rs. 65,000
Personal loan: Rs. 20 lakh (EMI Rs. 42,000 for 6 years)

Your Future Goal

Retirement age: 58 years
Desired monthly pension: Rs. 1 lakh

Current Savings
You're doing good with your PF and MF savings. Keep it up!
Debt Management
Your loan EMI is quite high. It's eating up a big chunk of your income.

Try to pay off your loan faster if possible
Don't take any more loans for now
Use any extra money to reduce your debt

Increasing Your Savings
After EMI, you have Rs. 58,000 left. Here's what you can do:

Start an emergency fund if you haven't already
Increase your mutual fund investments
Look into PPF for long-term tax-saving investment

Retirement Planning
You have 29 years till retirement. That's good news!

Start a separate retirement fund
Invest in a mix of equity and debt funds
Increase your investments as your income grows

Investment Strategy
For long-term goals like retirement, consider:

Equity mutual funds for growth
Balanced funds for moderate risk
Debt funds as you get closer to retirement

Benefits of Regular Funds

Get expert advice from certified financial planners
They'll help you choose the right funds
Regular review of your investments
Help in staying on track with your goals

Protection First

Get a good term insurance plan
Ensure you have health insurance
This will protect your savings in emergencies

Tax Planning

Use Section 80C investments wisely
Don't invest just for tax saving
Look at overall returns and how they fit your goals

Regular Reviews

Check your investments every 6 months
Make changes if needed
Keep an eye on your progress towards retirement

Increasing Your Income

Look for ways to grow in your career
Consider side income opportunities
Use any salary hikes to boost your investments

Finally
Your goal is achievable with disciplined saving and smart investing. Start early and stay consistent. Regular reviews will help you stay on track. Remember, small steps today lead to big results tomorrow!
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 30, 2024

Question by PREM - May 30, 2024Hindi

Money

hello sir, Prem here. I am 60yrs. need the financial planning. Going to retire. I have NPS of 55 lakh, FD of 1.2 Cr, PPF 15lakh, MF 35lakh. Now need the pension 1.5lakh/month. Own house. no loan. all children settled. What to do and how to plan ahead. Please guide step by step. regards

Ans: Dear Prem,

Congratulations on reaching this significant milestone in your life. Retirement is a time to enjoy the fruits of your labor and ensure financial stability. You have a substantial portfolio, and with careful planning, you can achieve your goal of a Rs. 1.5 lakh monthly pension. Here’s a step-by-step guide to help you plan ahead.

Assessing Your Current Financial Position
You have a well-diversified portfolio:

NPS: Rs. 55 lakh
Fixed Deposit: Rs. 1.2 crore
PPF: Rs. 15 lakh
Mutual Funds: Rs. 35 lakh
This gives you a total corpus of Rs. 2.25 crore.

Step 1: Evaluate Your Monthly Expenses and Goals
Before we plan the investment, it’s crucial to understand your monthly expenses and financial goals.

Monthly Pension Requirement: Rs. 1.5 lakh
Other Goals: Healthcare, travel, and emergencies
Step 2: Creating an Income Stream
Systematic Withdrawal Plan (SWP)
SWP from mutual funds can provide a regular income while keeping your investment growing. Here’s how it works:

Select the Mutual Funds: Choose funds that have a good track record and match your risk profile.
Set the Withdrawal Amount: Decide on a fixed amount to withdraw monthly.
Benefit: This method allows you to get regular income while the remaining funds continue to grow.
Annuity from NPS
NPS offers an annuity option, which can provide a steady income. You can allocate a portion of your NPS corpus to an annuity plan. Here’s how:

Use 40% of NPS Corpus: Use at least 40% of your NPS corpus to buy an annuity.
Choose the Right Annuity Plan: Select an annuity plan that offers a lifetime payout.
Benefits: An annuity ensures a guaranteed monthly income for life.
Fixed Deposit and PPF Interest
Fixed Deposit Interest: The interest from your FD can provide a regular income. Reinvest the principal amount at maturity to continue receiving interest.
PPF Withdrawals: After retirement, you can start withdrawing from your PPF account as needed.
Step 3: Allocating Your Corpus
Diversify Your Investments
Debt Instruments: Allocate a portion of your corpus to debt instruments for stable and secure returns. This includes fixed deposits, PPF, and debt mutual funds.
Equity Instruments: To keep up with inflation, maintain a portion in equity mutual funds. This helps in growing your corpus over time.
Example Allocation
Equity Mutual Funds: Rs. 35 lakh (for growth and SWP)
Debt Mutual Funds: Rs. 20 lakh (for stability and SWP)
Fixed Deposits: Rs. 1 crore (for regular interest income)
PPF: Rs. 15 lakh (for secure returns)
NPS Annuity: Rs. 22 lakh (for guaranteed monthly income)
Step 4: Planning for Healthcare and Emergencies
Health Insurance
Ensure you have adequate health insurance to cover medical expenses. This will protect your savings from being depleted due to healthcare costs.

Emergency Fund
Maintain an emergency fund of at least 6-12 months of your expenses. This should be easily accessible and invested in liquid funds or a savings account.

Step 5: Regularly Review and Adjust Your Plan
Your financial needs and market conditions will change over time. Regularly review your investment plan and adjust it as needed. Here’s how:

Annual Reviews: Conduct annual reviews to assess the performance of your investments.
Rebalance Portfolio: Rebalance your portfolio to maintain the desired asset allocation.
Consult a Certified Financial Planner: A CFP can provide personalized advice and help you create a customized roadmap with specific analysis and calculations.
Benefits of Consulting a Certified Financial Planner
A CFP can help you:

Analyze Your Financial Situation: Assess your current financial status and future needs.
Create a Customized Plan: Develop a tailored plan that aligns with your goals.
Monitor and Adjust: Regularly monitor your investments and make adjustments as needed.
Provide Peace of Mind: Ensure that your financial future is secure and well-planned.
Conclusion
By following these steps, you can create a solid financial plan for your retirement. Diversify your investments, utilize SWP and annuities, and regularly review your plan. Consulting a Certified Financial Planner can provide additional guidance and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 06, 2024

Asked by Anonymous - Jun 02, 2024Hindi

Money

Hi, i am 44 years old. Have 35 lakhs in PF, 30 Lakhs in MF , around 3 lakhs in stocls, 6 lakhs in FDs , home loan of 12 lakhs, 1 house is in litigation though and second house i am joint owner with my father with 30: share. I am single . I want to retire by 55. How should i plan my retirement funds.

Ans: Planning for retirement is a crucial step, especially if you aim to retire by 55. Given your current financial situation, let's create a comprehensive retirement plan. This plan will consider your assets, liabilities, and future financial needs to ensure a secure and comfortable retirement.

Assessing Your Current Financial Situation
Existing Assets and Liabilities
You have a good start with Rs 35 lakhs in PF, Rs 30 lakhs in mutual funds, Rs 3 lakhs in stocks, and Rs 6 lakhs in fixed deposits. You also have a home loan of Rs 12 lakhs, and two properties, one in litigation and one shared with your father.

Net Worth Calculation
Let's calculate your net worth by subtracting your liabilities from your assets.

Assets:

PF: Rs 35 lakhs
Mutual Funds: Rs 30 lakhs
Stocks: Rs 3 lakhs
Fixed Deposits: Rs 6 lakhs
Total Assets: Rs 74 lakhs
Liabilities:

Home Loan: Rs 12 lakhs
Total Liabilities: Rs 12 lakhs
Net Worth:

Total Assets - Total Liabilities = Rs 74 lakhs - Rs 12 lakhs = Rs 62 lakhs
Your current net worth is Rs 62 lakhs.

Retirement Goals and Expenses
Determining Retirement Corpus
To determine how much you need to retire comfortably, estimate your annual expenses post-retirement. Factor in inflation, healthcare costs, and any other regular expenses. Suppose you estimate your annual expenses to be Rs 6 lakhs today.

Assuming an average inflation rate of 6%, your expenses in 11 years will be:11.3 6 Lacs.

To maintain this lifestyle for 25 years post-retirement, you need a corpus that supports annual withdrawals of Rs 11.36 lakhs, adjusted for inflation. Assuming a safe withdrawal rate of 4%: Required corpus approx = 2.84 Crores.

Investment Strategy
Maximizing Existing Investments
Provident Fund (PF):
Continue contributing to your PF to benefit from the guaranteed returns and tax advantages. This will be a stable part of your retirement corpus.

Mutual Funds:
Given your substantial investment in mutual funds, ensure they are diversified across equity and debt funds. Equity funds offer growth, while debt funds provide stability. Aim for a mix that aligns with your risk tolerance and investment horizon.

Stocks:
Stocks can offer high returns but come with higher risk. Review your stock portfolio and consider diversifying to reduce risk. Focus on blue-chip stocks for stability and potential growth.

Fixed Deposits:
Fixed deposits offer safety but low returns. Consider shifting a portion of your FDs to higher-yield investments like mutual funds or debt funds to enhance returns.

Reducing Liabilities
Home Loan Repayment:
Prioritize paying off your home loan. This reduces interest burden and improves cash flow. Consider using a portion of your fixed deposits or mutual funds to expedite repayment.
Addressing Real Estate Issues
Litigation Property:
Legal issues can be lengthy and uncertain. Keep a close watch and consult with a legal advisor. Avoid relying on this property for your retirement corpus.

Joint Ownership Property:
Discuss future plans with your father regarding the jointly owned property. Ensure clarity on ownership and future use or sale.

Enhancing Savings and Investments
Systematic Investment Plan (SIP)
Start or increase your SIPs in mutual funds. SIPs help in disciplined investing and rupee cost averaging, which is beneficial for long-term wealth creation.

Diversification
Diversify your investments across various asset classes. This includes equity, debt, and other financial instruments. Diversification reduces risk and enhances potential returns.

Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of expenses. This fund should be easily accessible and kept in a savings account or liquid funds.

Insurance Coverage
Health Insurance
Ensure your mediclaim policy offers adequate coverage. Health costs can significantly impact your savings, especially post-retirement.

Life Insurance
Evaluate your life insurance coverage. If you hold LIC policies or other investment-linked insurance, consider their returns. If they are not meeting your expectations, consider surrendering them and redirecting the funds to more efficient investments.

Tax Planning
Utilizing Tax Benefits
Maximize tax-saving investments under Section 80C. This includes PF, PPF, ELSS, and other eligible instruments. Utilize the tax benefits to reduce your taxable income and increase your savings.

Long-Term Capital Gains
Plan your investments to take advantage of long-term capital gains tax benefits. Equity investments held for more than a year qualify for lower tax rates, enhancing your post-tax returns.

Regular Portfolio Review
Periodic Assessments
Regularly review your investment portfolio. Adjust allocations based on market conditions and personal circumstances. A Certified Financial Planner (CFP) can assist in periodic reviews and rebalancing.

Staying Informed
Stay updated with financial news and trends. Financial literacy empowers you to make informed decisions and adapt your strategy as needed.

Appreciating Your Efforts
Your proactive approach to retirement planning is commendable. At 44, you have substantial savings and a clear goal. This disciplined approach will ensure a secure and comfortable retirement.

Conclusion
Achieving a comfortable retirement by 55 requires careful planning and disciplined execution. Assess your current financial situation, set clear goals, and choose the right investment options. Regularly review and adjust your plan with the help of a Certified Financial Planner. Stay consistent, patient, and informed. Your dedication and effort will pave the way to financial success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |7290 Answers |Ask -Follow

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

Asked by Anonymous - Jun 29, 2024Hindi

Money

Hi, I am earning close to 1.7lacs pm in hand. Have monthly sip of 15k, deposit 80k every year in PPF. Have insurance policy of 10lacs. Want to plan for kids in next 2 years. Current age is 34. Pls could you suggest how to plan for future and retirement assuming retiring at 55 yrs.

Ans: Let's delve deeper into your financial planning, keeping in mind your goal to retire at 55 and plan for kids in the next two years. We’ll break it down step by step, covering all aspects thoroughly.

Current Financial Position
You have a stable monthly income of Rs 1.7 lakhs. You’re already making smart investment choices by allocating Rs 15,000 monthly to SIPs and Rs 80,000 annually to PPF. Additionally, you have an insurance policy worth Rs 10 lakhs. This is a good foundation to build upon.

Planning for Kids
Having children is an exciting milestone that comes with additional financial responsibilities. Here’s how you can prepare:

Budgeting for Child-Related Expenses
Children require significant financial planning. You’ll need to consider costs for healthcare, education, and everyday needs.

Healthcare: Ensure your health insurance covers maternity and child-related expenses. Childbirth, vaccinations, and regular check-ups can be costly.

Education: Start an education fund early. Education costs are rising, and planning ahead ensures you won’t be caught unprepared. Consider setting up a separate account or investment plan specifically for your child's education.

Daily Expenses: Include costs for clothing, food, and other necessities. These can add up quickly, so it’s wise to have a budget in place.

Health and Life Insurance
Health Insurance: Consider increasing your health insurance coverage. A comprehensive plan that includes maternity benefits and child healthcare is essential.

Life Insurance: Your current life insurance coverage of Rs 10 lakhs might be insufficient once you have children. Aim for a cover that is at least 10-15 times your annual income. Term insurance is a cost-effective way to increase coverage.

Retirement Planning
Retiring at 55 means you have 21 years left to build your retirement corpus. Here’s how to ensure a comfortable retirement:

Assess Retirement Corpus Needed
Estimate how much you will need annually post-retirement, considering your lifestyle, inflation, and any ongoing obligations. This will give you a target retirement corpus. For example, if you need Rs 50,000 per month in today’s terms, you’ll need a corpus that can generate this amount considering inflation.

Increase SIP Contributions
Your current SIP of Rs 15,000 is a great start. However, as your income increases, consider raising this amount. SIPs in diversified mutual funds can provide substantial growth over the long term due to the power of compounding.

PPF Contributions
PPF is a safe investment with tax benefits. Continue your annual contributions of Rs 80,000 and consider increasing it to the maximum limit of Rs 1.5 lakhs per year. PPF offers a secure return and is a good component of a balanced portfolio.

Diversify Investments
Balance your investments between equity and debt to manage risk and return. Equities can provide higher returns over the long term, while debt investments offer stability. Diversification helps in balancing the risk and smoothing returns.

Emergency Fund
Maintain an emergency fund covering at least six months of living expenses. This fund should be easily accessible and not tied to long-term investments. It acts as a financial cushion against unexpected events like job loss or medical emergencies.

Long-Term Investments
Mutual Funds
Focus on actively managed mutual funds. These funds, managed by professional fund managers, can potentially provide higher returns compared to index funds. Regularly review and rebalance your portfolio with the help of a Certified Financial Planner (CFP) to ensure it aligns with your goals.

Gold
Continue your existing investment in gold. It serves as a hedge against inflation and adds diversity to your portfolio. Gold can be a safe investment during times of economic uncertainty.

Insurance
Health Insurance
Ensure you have adequate health insurance coverage. As healthcare costs rise, a robust health policy will protect your savings. Look for plans that cover a wide range of illnesses and provide adequate cover for hospitalization and treatment.

Life Insurance
Review your life insurance coverage. With future family additions, you might need a higher cover. Term insurance is advisable for adequate coverage at a lower cost. Consider a policy that provides a cover of 10-15 times your annual income.

Tax Planning
Effective tax planning can save money and increase your investments. Utilize tax-saving instruments under Section 80C, 80D, and others.

Section 80C: Investments in PPF, ELSS, life insurance premiums, and tuition fees for children are eligible for deduction up to Rs 1.5 lakhs.

Section 80D: Premiums paid for health insurance for yourself, spouse, children, and parents are eligible for deductions.

Financial Goals
Children’s Education and Marriage
Plan for your children’s education and marriage by starting dedicated funds. The earlier you start, the more time your investments have to grow.

Education: Consider child-specific mutual funds or a dedicated savings plan. The power of compounding will help grow this fund over time.

Marriage: Start a separate fund for marriage expenses. Consider low-risk, long-term investments to ensure the fund grows steadily.

Retirement
Your retirement planning should ensure a comfortable lifestyle. Factor in inflation, healthcare, and other costs while planning your retirement corpus. Ensure you have a mix of equity for growth and debt for stability.

Final Insights
Creating a balanced financial plan involves considering all aspects of your future needs. Your current investments in SIPs and PPF are a great start, but there’s room for optimization. Increase your SIPs as your income grows, diversify your investments, and ensure you have adequate insurance coverage. Planning for children and retirement simultaneously can be challenging, but with a structured approach, you can achieve your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 09, 2024

Asked by Anonymous - Sep 07, 2024Hindi

Money

Namaste Sir, I am 42 year old with family of 5 .including my mother, 2 kids and wife Monthly Income is 1.75Lakhs Regular expenses are roughly 50K per month 2 Home loan Emis are 45 & 20k per month I have a corpus of about 30lakh in PF and ,5 lakh in mutual funds and would be availing a education loan . Please suggest how can I plan to have a retirement income of 80k to 1 lakh by age 55 I want to

Ans: You are 42 years old, and your family consists of five members: your mother, wife, and two kids. Your current monthly income is Rs. 1.75 lakh, and your regular expenses are Rs. 50,000 per month. You are paying two home loan EMIs: one of Rs. 45,000 and another of Rs. 20,000, totaling Rs. 65,000 per month.

You have a provident fund (PF) corpus of Rs. 30 lakh and Rs. 5 lakh invested in mutual funds. You are also considering taking an education loan for your children's future.

You aim to retire by age 55 and desire a monthly retirement income of Rs. 80,000 to Rs. 1 lakh. This is a realistic goal, but it will require disciplined planning and strategic investment.

Let’s break down each area for a comprehensive financial plan to help you achieve your retirement goal.

Home Loan Repayment Strategy
You currently have two home loan EMIs, which amount to Rs. 65,000 per month. Clearing these loans will significantly reduce your financial burden and free up cash flow for further investments.

Prioritise Loan Repayment: Since you have two home loans, focus on paying off the one with the higher interest rate first. If both rates are similar, start by repaying the smaller loan to reduce your monthly EMI burden faster.

Lump Sum Repayments: Whenever possible, make lump sum repayments toward the principal of your home loans. This will help you save on interest and clear the loans sooner.

Loan-Free Retirement: Aim to clear your home loans before retirement. Being debt-free will ensure that your retirement income is not affected by large EMIs.

Investment Growth for Retirement
You currently have Rs. 5 lakh in mutual funds and Rs. 30 lakh in your provident fund. To meet your goal of Rs. 80,000 to Rs. 1 lakh in monthly retirement income, you will need to significantly grow your investments over the next 13 years.

Increase Monthly SIPs: With Rs. 1.75 lakh in monthly income and Rs. 50,000 in expenses, you have a healthy surplus. After accounting for your home loan EMIs, you still have Rs. 60,000 per month available. Consider investing at least Rs. 40,000 to Rs. 50,000 in Systematic Investment Plans (SIPs) every month. This disciplined approach will help you accumulate a sizable corpus over time.

Focus on Actively Managed Funds: Actively managed mutual funds offer the benefit of expert management, aiming to outperform the market. While index funds might seem attractive due to their low costs, they are not flexible enough to adapt to market changes. An actively managed fund, through a Certified Financial Planner (CFP), can help you achieve higher returns over the long term, especially given your 13-year horizon.

Avoid Direct Funds: While direct funds might have a lower expense ratio, they don’t come with professional guidance. Investing through a CFP and a trusted Mutual Fund Distributor (MFD) ensures that your portfolio is regularly reviewed and optimised. This professional support is crucial as you approach retirement, where every investment decision counts.

Provident Fund and Asset Allocation
Your Rs. 30 lakh in the provident fund is a great start toward building a retirement corpus. However, provident fund returns alone may not be sufficient to meet your goal of Rs. 80,000 to Rs. 1 lakh monthly income.

Diversification Is Key: While the provident fund provides safety and stable returns, it’s essential to diversify your portfolio. A higher allocation to equity through mutual funds can help you grow your corpus faster. Keep in mind that equity investments come with higher risks, but over a long-term period like 13 years, they also offer higher returns.

Rebalancing Your Portfolio: As you near retirement, you will need to gradually shift some of your equity investments to more stable debt funds. This will help protect your corpus from market volatility while still offering decent returns.

Planning for Your Children’s Education
You are planning to avail an education loan for your children’s higher studies, which is a sound strategy to manage immediate expenses without dipping into your retirement savings.

Education Loan as Leverage: Availing an education loan allows you to fund your children's education without using up your retirement savings. This ensures that your retirement planning stays on track while your children receive the education they need.

Continue SIPs: Even with an education loan, continue your SIP contributions. This will allow you to maintain a growing corpus while meeting education expenses through loan repayments.

Emergency Fund: Make sure to set aside an emergency fund that covers at least 6 months of living expenses. This will act as a financial cushion in case of unforeseen events, allowing you to meet both education loan EMIs and regular expenses without disrupting your long-term goals.

Retirement Income Planning
Your goal is to have a monthly retirement income of Rs. 80,000 to Rs. 1 lakh. Let’s assess how to achieve this target with a well-structured retirement corpus.

Systematic Withdrawal Plan (SWP): Post-retirement, you can use a Systematic Withdrawal Plan (SWP) from your mutual fund corpus. This allows you to withdraw a fixed amount regularly while your remaining investments continue to grow. An SWP can be tailored to meet your monthly income needs while ensuring that your principal is not depleted quickly.

Pension-Like Income: With the right combination of debt and equity funds, your retirement corpus can generate a stable monthly income that acts like a pension. This will complement any other pension schemes or provident fund withdrawals.

Target Corpus: Given your desired retirement income, aim to build a retirement corpus that is large enough to generate Rs. 80,000 to Rs. 1 lakh per month. This can be achieved through consistent SIP contributions, provident fund growth, and strategic withdrawals post-retirement.

Health Insurance and Risk Management
With a family of five, including your mother and two children, adequate health insurance is essential to protect your finances from medical emergencies.

Adequate Health Insurance: Ensure that you have comprehensive health insurance that covers all family members. Medical costs are rising, and having a strong health insurance policy will prevent any major financial strain due to hospitalisation or treatment costs.

Life Insurance: It is also important to have adequate life insurance coverage, especially since you have ongoing liabilities like home loans. A term insurance plan with sufficient coverage will ensure that your family is financially secure in case of any unforeseen events.

Avoid Investment-Linked Insurance: If you hold any insurance policies that are linked to investments, such as endowment or ULIP policies, consider surrendering them. These plans generally offer lower returns compared to mutual funds. It’s better to reinvest the proceeds from these policies into your SIPs for better growth.

Emergency Fund and Contingency Planning
Having an emergency fund is crucial to safeguard your financial goals in case of unexpected expenses.

Building an Emergency Fund: Set aside an amount equivalent to at least 6 months of your regular expenses in a liquid fund or savings account. This fund should be easily accessible and used only for true emergencies, such as medical expenses or temporary income loss.

Avoid Over-Investing: While it is important to invest aggressively for your retirement, don’t neglect liquidity. Keeping a portion of your savings in easily accessible accounts ensures that you don’t have to redeem your mutual fund investments at a loss in case of emergencies.

Tax Efficiency in Investments
Maximising tax savings can help you increase your overall returns and protect more of your wealth.

Tax-Saving Mutual Funds: Consider investing in tax-saving mutual funds (ELSS) to reduce your tax liability. ELSS funds offer tax benefits under Section 80C of the Income Tax Act, along with the potential for higher returns compared to other tax-saving instruments.

Long-Term Capital Gains Management: Be mindful of the tax implications when redeeming your mutual fund investments. Long-term capital gains (LTCG) from equity mutual funds are taxable beyond a certain threshold, so it’s important to plan withdrawals strategically.

Estate Planning and Will
To ensure that your assets are passed on to your family without legal complications, it is important to have a clear estate plan in place.

Drafting a Will: Drafting a will is essential to specify how your assets will be distributed among your family members. Ensure that all your assets, including your house, provident fund, and mutual fund investments, are accounted for in your will.

Updating Nominations: Make sure that the nominations on your provident fund, mutual funds, and insurance policies are updated to reflect your wishes. This will ensure a smooth transfer of assets to your beneficiaries.

Final Insights
You are on the right track with your financial planning. With disciplined savings and strategic investments, you can achieve your retirement goal of Rs. 80,000 to Rs. 1 lakh monthly income.

Focus on repaying your home loans, increasing your SIP contributions, and diversifying your investments between equity and debt. Health insurance and a proper estate plan will further secure your financial future.

By following this well-rounded approach, you can look forward to a comfortable and financially secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Latest Questions

Dr Nagarajan Jsk |183 Answers |Ask -Follow

NEET, Medical, Pharmacy Careers - Answered on Dec 21, 2024

Asked by Anonymous - Nov 19, 2024Hindi

Career

Hello sir I am mbbs graduated from russia in 2020,n passed with my fmge exam in india in 2021, I want to ask if i want to practice medicine or work as doctor in uk ? Is it necessary for me to pass plab exam exam? Or if i get sponsorship from any uk i will be able to work there and simultaneously i will give plab exam?? Please guide me i m so confused?

Ans: Hi, I understand that you pursued a medicine course in Russia (a non-European country) and, since you are from India, you have completed the FMGE. Now you want to practice or work in the UK as a doctor?

Based on your question, you are eligible to practice in India after completing your internship (which you haven't mentioned, but I assume you have completed it). The FMGE is essentially a licensure exam for Indian students who have completed their medical studies abroad, so you are eligible to practice in India only.

If you want to practice medicine in the UK, you need to complete the PLAB test, as you are from outside the UK/Switzerland/European countries (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland).

You also inquired about sponsorship. Here is the information related to sponsorship for practicing medicine in the UK.
(Extracted from general medical council, uk org. )Applying for registration using sponsorship
If you apply through sponsorship, you will have to satisfy the sponsor that you possess the knowledge, skills and experience required for practising as a fully registered medical practitioner in the UK. Each sponsor has their own scheme which we have pre-approved. If you can satisfy the requirements of their scheme, they will issue you with a Sponsorship Registration Certificate (SRC) which you will need for your application with us. Please ensure this is a Sponsorship Registration Certificate for GMC registration, as we can’t accept UK visa sponsorship certificates for your application for registration.
Please note that a core part of all sponsors' criteria is that a doctor applying for an offer of sponsorship must have been engaged in medical practice for three out of the last five years including the most recent 12 months. If you cannot meet these minimum criteria, it is unlikely that you'll be able to supply sufficient evidence to support your application for sponsorship.
Doctors applying through sponsorship are required to demonstrate their English language skills by achieving our current minimum scores in the academic version of the IELTS test or the OET (medicine version).
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• Derbyshire Healthcare NHS Foundation Trust - International Medical Fellowship Programme in Psychiatry
• Dudley Group NHS Foundation Trust
• East Lancashire Hospitals NHS Trust - Clinical Fellowship in Urology or Ophthalmology
• East Lancashire Hospital NHS Trust - Specialist Clinical Fellowship in Pain Management
• East London NHS Foundation Trust (ELFT) – ELFT Advanced International Fellowship in Psychiatry
• East Suffolk and North Essex NHS Foundation Trust – ICENI Centre Fellowships Programme
• Edge Hill University and Wrightington, Wigan and Leigh NHS Trust – International Training Fellowships in MCh programmes
• ENT UK – Royal College of Surgeons
• Essex Partnership University NHS Foundation Trust – EPUT Advanced Fellowship in Psychiatry
• Frimley Health NHS Foundation Trust – International Fellowship in Regional Anaesthesia combined with MSc in Principles of Regional Anaesthesia at the University of East Anglia
• Great Ormond Street Hospital International Fellowship Programme
• Guy's and St Thomas' Hospitals NHS Foundation Trust – Critical Care
• Guy’s and St Thomas’ NHS Foundation Trust – International Clinical Fellowship Programme (ICFP)
• Guy's and St Thomas' Hospitals NHS Foundation Trust – Obstetrics and Gynaecology
• Guy’s and St Thomas’ NHS Hospitals Foundation Trust – Oncology Specialty Training
• Guy's and St Thomas' NHS Hospitals Foundation Trust – Specialty Training in Anaesthetics
• Harefield Hospital, Royal Brompton and Harefield NHS Trust – Anaesthesia and Critical Care
• Hertfordshire Partnership University NHS Foundation Trust
• Hull University Teaching Hospitals NHS Trust – International Fellows at Hull University Teaching Hospitals NHS Trust
• Humber Teaching NHS Foundation Trust - Sponsored International Fellowship Scheme in Psychiatry
• Imperial College Healthcare NHS Trust – Emergency Medicine
• Imperial College Healthcare NHS Trust – Haematology
• Imperial College Healthcare NHS Trust – International Anaesthesia Trainees
• Imperial College Healthcare NHS Trust – Intensive Care Medicine
• Imperial College, London - Clinical Research
• King’s College Hospital NHS Trusts – International Critical Care Fellowship
• King’s College Hospital NHS Trusts – Paediatric Critical Care Fellowship
• Lancashire & South Cumbria NHS Foundation Trust - Psychiatry specialty Fellowship Scheme
• Lancashire Teaching Hospitals NHS Trust - Overseas Registrar Development and Recruitment (ORDER)
• Leeds Teaching Hospitals NHS Trust – International Fellowship Programme
• Leicestershire Partnership NHS Trust – International Medical Fellowship Programme in Psychiatry
• Lincolnshire Partnership NHS Foundation Trust – CESR Fellowship in Psychiatry or Sponsored Fellowship in Psychiatry
• Lysholm Dept of Neuroradiology – National Hospital for Neurology and Neurosurgery, UCL
• Manchester University NHS Foundation Trust – International Fellowship Programme
• Midlands Partnership NHS Foundation Trust
• Ministry of Defence – International Military Clinical Fellowships
• Modality Partnership - Modality Primary Care International Fellowship Scheme
• NAViGO Health and Social Care CIC – International Medical Fellowship in Psychiatry
• NHS England, East of England - East of England International Office GMC Sponsorship
• NHS Fife – CESR Fellowship Programme in Psychiatry
• NHS Grampian – Psychiatry CESR Fellowship Programme
• NHS Grampian – Multi-specialty SAS Fellowship
• NHS Wales Shared Services Partnership (NWSSP) – All Wales International Medical Recruitment Programme
• Norfolk and Suffolk NHS Foundation Trust (NSFT) - Advanced Clinical Fellowship in Psychiatry
• North Lincolnshire and Goole NHS Foundation Trust (NLAG) Sponsorship Programme
• Northampton General Hospital – Clinical Fellowship in Regional Anaesthesia
• Northampton General Hospital NHS Trust - International Clinical Fellowship in Regional Anaesthesia, Vascular Anaesthesia, or Peri-operative Medicine
• Northamptonshire Healthcare NHS Foundation Trust – International Clinical Fellowship Scheme
• Northamptonshire Healthcare NHS Foundation Trust – International Clinical Fellowship Scheme (Psychiatry)
• Northern Care Alliance – NCA International Medical Fellowship Scheme
• Oxford University Hospitals NHS Foundation Trust – Oxford Eye Hospital
• Oxford University Hospitals NHS Foundation Trust – Oxford Intensive Care Medicine (OxICM) Sponsorship Scheme
• Oxford University Hospitals NHS Foundation Trust – Oxford University Hospitals Sponsorship Scheme
• Oxford University Hospitals NHS Foundation Trust – The Oxford International Neonatal and Paediatric Fellowship Programme
• Rotherham Doncaster and South Humber NHS Foundation Trust - Sponsored International Fellowship Scheme in Psychiatry
• Royal College of Anaesthetists – Global Fellowship Scheme (Anaesthesia or ICM)
• Royal College of Anaesthetists – MTI Scheme
• Royal College of Emergency Medicine
• Royal College of Obstetricians and Gynaecologists – MTI Scheme
• Royal College of Ophthalmologists
• Royal College of Paediatrics and Child Health – International Paediatric Sponsorship Scheme
• Royal College of Paediatrics and Child Health – MTI Scheme
• Royal College of Pathologists
• Royal College of Physicians of Edinburgh
• Royal College of Surgeons of England
• Royal College of Physicians of London
• Royal College of Physicians and Surgeons of Glasgow
• Royal College of Psychiatrists – MTI Scheme
• Royal College of Radiologists – Clinical Radiology
• Royal College of Radiologists – Clinical Oncology
• Royal College of Radiologists – RCR Specialty Training Sponsorship Scheme
• Royal College of Surgeons of Edinburgh
• Royal Devon and Exeter NHS Trust
• Royal Papworth Hospital NHS Foundation Trust – Senior Clinical Fellowship Programme in Anaesthesia and Critical Care
• Royal Wolverhampton Trust – Clinical Fellowship Programme
• Sheffield Children’s NHS Foundation Trust - Rotational Clinical Fellows in Paediatrics, Trauma and Orthopaedic International Fellows, and Subspeciality Fellows in Paediatrics
• Sheffield Health and Social Care NHS Foundation Trust - International Medical Fellowship in Psychiatry
• Somerset NHS Foundation Trust – Somerset Overseas Doctors Sponsorship Scheme
• Somerset NHS Foundation Trust – Psychiatry Overseas Doctors Sponsorship Scheme
• South Warwickshire University NHS Foundation Trust - GMC Multispecialty Sponsorship Scheme
• South West Yorkshire Partnership NHS Foundation Trust – International Fellowship in Psychiatry
• Southmead Hospital, North Bristol NHS Trust – International Obstetrics and Gynaecology Training Programme
• St Bartholomew’s Hospital, Barts Health NHS Trust – St Bartholomew’s Critical Care Fellowship
• St George’s University Hospitals NHS Foundation Trust – International Anaesthetics Fellowship Programme
• St George’s University Hospital NHS Foundation Trust (Dr Nirav Shah) – International Intensive Care Medicine Trainees
• St George’s University Hospitals NHS Foundation Trust – International Emergency Medicine Trainees
• Surrey and Borders Partnership (SABP) NHS Foundation Trust – International Psychiatric and Community Paediatrics Sponsorship Scheme
• Tees, Esk and Wear Valleys NHS Foundation Trust – International Psychiatric CESR or SAS Fellowship
• University College London Hospitals NHS Foundation Trust, Department of Critical Care – Clinical Fellowship Critical Care and Perioperative Medicine
• University Hospital Birmingham NHS Foundation Trust - International Training Fellowship Programme
• University Hospitals Birmingham NHS Foundation Trust - UHB LED Fellowship Programme
• University Hospitals Bristol and Weston NHS Foundation Trust – Bristol Children's Hospital International Fellowship Scheme
• University Hospitals Bristol and Weston NHS Foundation Trust - Department of General Internal Medicine at Weston General Hospital
• University Hospitals Coventry and Warwickshire NHS Trust
• University Hospitals of Leicester NHS Trust - Postgraduate Clinical Fellowship Programme
• University of Buckingham – Master of Medicine
• University of Buckingham – Master of Surgery
• University of Chester and Cheshire and Wirral Partnership NHS Trust – International Training Fellows Psychiatry
• University of Hertfordshire – Professional Doctorate in General Internal Medicine (Clinical MD) Programme
KINDLY NOTE: If your sponsor is not on this list then you cannot apply using sponsorship.
If you have any further questions, please visit the GMC website for more information.

WISH YOU ALL THE VERY BEST.

Dr Nagarajan Jsk |183 Answers |Ask -Follow

NEET, Medical, Pharmacy Careers - Answered on Dec 21, 2024

Asked by Anonymous - Aug 02, 2024Hindi

Career

I’m mbbs final year student from Kathmandu university want pg medicine from UAE

Ans: You have provided very limited information. I understand that you are a student from Kathmandu University and wish to pursue higher education in medicine in the UAE. To provide a more accurate response, I need the following details:

What is your nationality? (Based on your nationality, I can check the relevant requirements from the health department regarding courses and internships).

Dr Nagarajan Jsk |183 Answers |Ask -Follow

NEET, Medical, Pharmacy Careers - Answered on Dec 21, 2024

Asked by Anonymous - Dec 20, 2024Hindi

Career

Sir my son has 92 percentile in cat 2024..what are his scopes of admission.

Ans: Hi Sir,
You have provided very limited information to obtain the details. However, the percentile of the candidate will not solely determine the admission process. Other factors are also involved, including:

- Course
- Institution
- Caste
- Creamy layer
- Gender

But, there may be possibilities for admission to the following IIMs: IIM Visakhapatnam, Udaipur, Bodhgaya, Shillong, and Rohtak.

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Dec 21, 2024

Asked by Anonymous - Dec 21, 2024Hindi

Money

Hi Sir, I follow your articles regularly and your detailed assessment is really awesome.I am 47yrs Male with wife, 20&18 years kids, elder one is in B.Tech and younger one is 12th. My wife is a home maker. Coming to financials. I have 4 houses including the one residing worth 10cr(total) and getting rental income of 70k per month, invested in stocks and MFs worth 60L, have foreign stocks of worth 1.7cr, accumulated pf around 1.3cr. I have farm lands worth 5cr. Have 1.2cr loan and salary of ~4L (net). current sips in equity 70k/month, have 5Cr term plan, health insurance for family 50L. How do I plan my retirement at 52-53years assuming 80 years life expectancy. Don't want to depend on kids and need regular income ~3-4L per month.

Ans: Asset Evaluation
Real Estate:
You own four houses worth Rs 10 crore, generating Rs 70,000 monthly rental income. This is a solid base for passive income. However, real estate can have fluctuating maintenance costs, tenant issues, and varying rental yields over time.

Stocks and Mutual Funds:
Your Rs 60 lakh investment in stocks and mutual funds is a commendable step. Active mutual funds offer professional fund management and can outperform index funds over time.

Foreign Stocks:
Your Rs 1.7 crore portfolio in foreign stocks adds geographical diversification. Monitor currency exchange fluctuations and global market trends.

Provident Fund (PF):
With Rs 1.3 crore in PF, this is a reliable retirement corpus. The fund provides fixed returns and tax benefits, adding stability.

Farm Lands:
Farm lands worth Rs 5 crore are an illiquid but valuable asset. They might not generate consistent income unless leased or developed.

Loans:
A loan liability of Rs 1.2 crore needs prioritised repayment. Focus on loans with higher interest rates first.

Insurance Coverage:
A Rs 5 crore term plan is robust. Your Rs 50 lakh health insurance is sufficient for unexpected medical emergencies.

Retirement Goals
You need Rs 3–4 lakh monthly for 27–28 years post-retirement.
The portfolio must generate steady, inflation-adjusted returns.
Action Plan for Retirement
Debt Management
Prepay High-Interest Loans:
Use a portion of your surplus income to prepay loans. This reduces interest outflow and increases your cash flow.

Avoid New Loans:
Focus on reducing existing liabilities instead of taking on new ones.

Portfolio Restructuring
Real Estate:
Retain essential properties. Sell underperforming or non-essential properties to reduce concentration in real estate. Invest proceeds in mutual funds or debt instruments for diversification.

Mutual Funds (MFs):
Increase SIPs in actively managed funds. They outperform direct funds due to guidance from Certified Financial Planners and MFDs. Regular funds offer better tracking and professional assistance.

Stocks:
Monitor direct equity investments closely. Consider reallocating underperforming stocks to mutual funds for better management.

Debt Instruments:
Invest in high-quality debt funds or fixed-income securities for stability. These instruments balance equity volatility and ensure steady returns.

SIP Strategy
Increase SIPs from Rs 70,000 to Rs 1 lakh/month.
Allocate 70% to equity funds for long-term growth.
Invest 30% in debt funds for stability and liquidity.
Emergency Fund
Maintain a 12-month expense reserve in liquid funds or fixed deposits.
This covers unexpected expenses without disturbing investments.
Income During Retirement
Systematic Withdrawal Plan (SWP)
Use SWPs in mutual funds to generate regular income.
Withdraw 6–8% annually from your mutual fund portfolio for a steady income stream.
Rental Income Optimisation
Review property rents regularly.
Invest part of rental income in equity or debt mutual funds for compounding.
Dividend Stocks
Retain high-dividend-yield stocks for regular income.
Reinvest surplus dividends for long-term growth.
Tax Efficiency
Equity Funds Taxation:
Long-term gains above Rs 1.25 lakh are taxed at 12.5%. Short-term gains are taxed at 20%.

Debt Funds Taxation:
Both short- and long-term gains are taxed per your income slab.

Real Estate Capital Gains:
Use exemptions under Sections 54 or 54F to save tax on property sales.

Inflation Protection
Allocate 60–70% of your portfolio to equity investments.

Equity provides inflation-adjusted returns over time.

Debt funds and fixed instruments safeguard against equity market volatility.

Estate Planning
Draft a will to allocate assets transparently among family members.
Use nomination and joint ownership to avoid legal complications.
Consider a family trust for farm lands to avoid disputes.
Periodic Review
Review your financial plan every six months.
Adjust investments based on market conditions, goals, and needs.
Consult a Certified Financial Planner regularly for updates.
Finally
A well-diversified portfolio ensures financial independence post-retirement. Focus on debt repayment, portfolio balance, and tax-efficient withdrawals. Your assets can comfortably generate Rs 3–4 lakh monthly income, adjusted for inflation.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Kanchan Rai |444 Answers |Ask -Follow

Relationships Expert, Mind Coach - Answered on Dec 21, 2024

Question by Kevin - Dec 19, 2024Hindi

Relationship

I am the eldest sibling in our families and aged 51. Normally, whenever anyone in the family has a problem - financial, mental, psychological, issue with people or anything else, they come up to discuss with me and share. Well, many would say I am lucky as people look up to me when they are in any kind of a problem. But that is not the case. Sadly no one is around with whom I can discuss or even think to share my issues, my problems. I do not have any friends. Sadly, yes, that is a fact and at my age, I dont expect that here we have a culture where we can get to making friends, at least the kind of friends with whom you can confide, share your feelings, problems. I tried and failed. Maybe because I am introvert or maybe I am too cautious. To make it more complicated, I dont work in the regular kind of job. I am a lone person who works as a freelance from home. This limits my outreach when it comes to interacting with real people. I have clients, business contacts, but I cannot get personal with them. It will never be a good choice. My wife is busy with her job + we do not have any relation beyond the daily matters related to household and it has been more than 10 years now that we live this way. Tried to sort out things with her but she just does not have time and interest (after all who wants to add on to tensions, stress). My daughter is after all my daughter - I cannot share these with her, and definitely at 10 she is too young to be one to discuss such stuff. I am not sure how far this issue can be fixed but I am hopeful to find some path here.

Ans: Dear Kevin,
Starting small can be helpful. Consider connecting with people through shared interests or hobbies, either online or in person, where the pressure to immediately open up is minimal. Online communities, local meetups, or volunteer activities can create low-stakes opportunities to connect with like-minded individuals. The goal isn’t to instantly find someone to confide in but to slowly build a sense of belonging and companionship.

Your relationship with your wife appears to be another significant source of emotional distance. While her lack of interest in deep conversations may seem like a barrier, it’s worth exploring other ways to reconnect—perhaps by spending time together in shared activities or revisiting moments that once brought you closer. Sometimes, relationships stuck in routines benefit from new experiences or even professional counseling to navigate the underlying dynamics.

Regarding your daughter, while it’s clear she cannot shoulder your emotional burdens, she can still be a source of joy and connection. Investing time in activities with her can provide a sense of fulfillment and grounding that counters loneliness.

Above all, remember that reaching out for professional support, such as therapy, is not a sign of weakness but an act of self-care. A therapist can provide a safe space to express your feelings and help you develop strategies to foster deeper connections and manage emotional isolation.

You deserve to feel supported and connected, and even if the journey to finding that seems long, every step you take toward opening up or seeking out others is a move toward a more fulfilling and less lonely existence.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Asked by Anonymous - Nov 22, 2024Hindi

Money

My Question is for New Tax Regime for Financial Year 2024 – 25. Total gross Income is Rs.9 lakhs and along with that income from share / stock trading i.e short term gains of Rs. 1 lakh. Could you please help me advise if what would be the tax liability?

Ans: 01. Considering your Income of Rs.9.00 lakhs as business income & Rs.1.00 lakh as STCG on securities, without any tax savings, your tax liability would be around Rs.62,400.00 in New tax regime. If we opt for the old tax regime, your tax liability would be much more than this.
Most welcome for any further clarifications. Thanks.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Question by SA - Nov 11, 2024Hindi

Money

I got a residential property through will from my mother,,property is 30 years old and i am planning to sell it, in that case i am going to get Rs 165lacks,, what will be the tax implication and how to avoid the same kindly advise i am 55 years old married man with a daughter

Ans: 01. In this case, you would be subjected to LTCG (Long Term Capital Gain) tax.
02. To work out LTCG, you should reduce its Cost from the Sale proceeds (Rs.165.00 lakhs).
of property, which was costed to your mother.
03. However, following details may help you to assess your tax liability.
Under present provisions of Income Tax Act, you may opt any of the options (Long Term
Capital Gains), as under :
(a). Tax Rate 12.50% without indexation or
(b). Tax Rate of 20% with Indexation.
04. You may calculate your tax liability under both options & may opt for the tax regime, where tax liability is minimum.
05. To avoid tax, you may invest in purchase of some house property. Exemption available would be minimum of Cost of new house property or the LTCG, which ever is less.
06. You have the option to purchase Capital Gain Bonds of NHAI etc., for tax saving.
07. Most welcome for any further clarifications. Thanks.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Asked by Anonymous - Dec 19, 2024Hindi

Money

Hello Sir, I worked in a Pvt Ltd company from 2006 to 2011, and they had their own PF trust. The company was later sold off to another firm. I still haven't withdrawn the my PF amount. How will i be able to do that. I have the PF number and ESP number. Since this was before 2011 , my UAN is not linked to this account. How will i be able to retrieve my PF amount that is still stuck here.

Ans: Kindly keep in touch with your previous employer (present owner of the company), in this connection. There should not be any problem in getting your PF amount, except certain formalities/ forms to be submitted.
Most welcome for any further clarifications. Thanks.

T S Khurana |260 Answers |Ask -Follow

Tax Expert - Answered on Dec 21, 2024

Asked by Anonymous - Dec 21, 2024Hindi

Money

Dear Guru. I have inherited a property in Mumbai from my deceased father which was purchased in 1983 by him. If today i sell the property which is worth 2.60 Crs whats my capital gains tax and how will it be calculated

Ans: 01. In absence of exact figures, it is not possible to calculate your Capital Gains Tax. However, following details may help you to assess your tax liability.
02. Under present provisions of Income Tax Act, you may opt any of the options (Long Term
Capital Gains), as under :
(a). Tax Rate 12.50% without indexation or
(b). Tax Rate of 20% with Indexation.
03. You may calculate your tax liability under both options & may opt for the tax regime, where tax liability is minimum.
04. Most welcome for any further clarifications. Thanks.

Ramalingam Kalirajan |7290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Dec 21, 2024

Question by Anil - Dec 20, 2024Hindi

Money

Top4 sips with 15k amount suggest me

Ans: Here’s an updated strategy for your Rs. 15,000 SIP allocation, replacing the sectoral/thematic fund with a small-cap fund for better long-term growth potential.

Suggested SIP Allocation (Rs. 15,000)
Large-Cap Fund

Allocation: Rs. 4,000/month
Objective: Stability and steady growth by investing in India’s top 100 companies.
Why Choose: Provides consistent returns and low volatility in your portfolio.
Flexi-Cap Fund

Allocation: Rs. 4,000/month
Objective: Diversified exposure across large, mid, and small-cap stocks.
Why Choose: Offers balanced risk and returns with flexibility during market cycles.
Mid-Cap Fund

Allocation: Rs. 3,500/month
Objective: Tap into the growth potential of medium-sized companies.
Why Choose: Higher returns with manageable risk compared to small caps.
Small-Cap Fund

Allocation: Rs. 3,500/month
Objective: Focus on fast-growing small-cap companies.
Why Choose: High-growth potential over the long term, though with higher volatility.
Why Include Small-Cap Funds?
Long-Term Growth: Small-cap companies have immense potential to grow significantly over time.
Diversification: Adds exposure to an underrepresented segment, complementing large and mid-caps.
High Returns: Potential for higher returns compared to other categories, albeit with higher risk.
Key Considerations
Investment Horizon: Stay invested for at least 7-10 years to mitigate short-term volatility.
Active Fund Management: Avoid direct or index funds to leverage professional expertise.
Regular Monitoring: Review fund performance periodically with a Certified Financial Planner.
Tax Implications
Equity Funds:
LTCG above Rs. 1.25 lakh/year taxed at 12.5%.
STCG (held less than 1 year) taxed at 20%.
Final Insights
This updated allocation ensures a mix of stability, moderate risk, and high growth. With consistent SIPs and periodic reviews, you can achieve robust wealth creation over the long term. A Certified Financial Planner can assist in optimising your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

See more questions »

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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