48-Year-Old Asks How to Invest Rs.20 Lakhs to Save on Capital Gains Tax

Ans: Many people face the challenge of earning a decent salary yet struggling to save. If your expenses absorb your entire income, it’s time to take control of your finances with a structured approach. Here’s how you can break the cycle and start building financial stability.

1. Track and Analyse Your Expenses
Identify spending leaks by tracking all expenses for a month.

Use spending tracker apps or a simple notebook to record daily expenses.

Categorise expenses into essentials (rent, food, utilities) and non-essentials (shopping, entertainment, eating out).

Spot unnecessary expenditures and set limits on avoidable expenses.

2. Set a Realistic Budget
Follow the 50-30-20 rule:

50% for needs (housing, bills, groceries).

30% for wants (shopping, entertainment, travel).

20% for savings and investments.

If savings seem difficult, reverse budgeting may work better. Allocate savings first, then spend what remains.

Automate bill payments to avoid late fees and unnecessary penalties.

3. Build an Emergency Fund
Set aside at least 6 months’ worth of expenses in a liquid fund.

Use a separate savings account for emergency funds to avoid spending it impulsively.

Automate transfers to this fund to ensure consistency.

4. Prioritise Saving Over Spending
Start small with savings if your expenses are tight. Even Rs 1,000 per month creates a saving habit.

Use automatic deductions to ensure savings before spending.

Increase savings percentage whenever you get a salary hike or bonus.

5. Cut Down on Unnecessary Expenses
Identify subscriptions you don’t use (streaming services, gym memberships).

Reduce frequent dining out and start cooking at home.

Choose budget-friendly alternatives for entertainment, shopping, and travel.

Negotiate for lower bills on rent, internet, and insurance.

6. Start Investing Wisely
Keep money working for you through investments rather than letting it sit idle.

Consider mutual funds through SIPs to build wealth over time.

Avoid investment-cum-insurance policies. Instead, opt for a separate term insurance and investments.

Invest in a mix of debt and equity based on your risk appetite.

7. Avoid Lifestyle Inflation
Salary hikes should increase savings, not expenses.

Maintain your current lifestyle and direct additional income towards savings.

Differentiate between needs and wants before making big purchases.

8. Plan for Future Goals
Define short-term and long-term goals (buying a home, early retirement, travel).

Assign a dedicated investment for each goal.

Adjust spending habits to align with your bigger financial vision.

9. Monitor and Adjust Regularly
Review your budget every 3-6 months to adjust based on changes in income or expenses.

Keep track of financial progress and celebrate small wins to stay motivated.

If needed, seek guidance from a Certified Financial Planner (CFP) like us for a customised financial strategy.

Final Thoughts
Breaking the paycheck-to-paycheck cycle requires discipline and consistency. By tracking expenses, budgeting wisely, saving first, and investing smartly, you can achieve financial stability and long-term wealth creation. Taking small but steady steps will lead to financial freedom in the long run.

Best Regards,

K. Ramalingam, MBA, CFP
Chief Financial Planner

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

Ans: Hi Koj
Last year's data suggests that securing admission with your percentile will be very challenging. Almost nil chances.

Ans: Hi Palak
With 93.8 percentile (OBC-NCL, Female category) in JEE Mains, your approximate CRL Rank would be around 65,000 - 70,000, and your OBC-NCL Rank would be around 15,000 - 18,000.

Possible Colleges for ECE/Electrical:
Good chances in:
Lower NITs (like NIT Mizoram, NIT Meghalaya, NIT Sikkim, NIT Nagaland)
IIITs (IIIT Ranchi, IIIT Bhagalpur, etc.)

GFTIs (e.g., Assam University, Gurukula Kangri, etc.)

State Engineering Colleges (through home state quota)
Borderline chances in:
Mid-tier NITs (like NIT Raipur, NIT Jamshedpur, etc., in later rounds like CSAB)

Ans: Hello Sushma Ji
Based on the JEE Main cutoff trends for NIT Surathkal's Computer Science and Engineering (CSE) program, securing admission with a 92.18 percentile in the OBC-NCL category appears challenging. Historically, the closing ranks for OBC-NCL candidates have been significantly higher. For instance, in 2024, the closing rank for OBC-NCL candidates in CSE was 701 , and in 2023, it was 1483 for female candidates.?

Given these trends, it's advisable to consider alternative NITs or engineering institutes where the cutoff ranks align more closely with your daughter's percentile. Exploring other reputable institutions with CSE programs may increase her chances of securing admission.?

Ans: hi
With 84 percentile in JEE Mains (OBC category), getting ECE in NITs will be challenging for NITs. However, you may have a chance in lower NITs or North Eastern NITs through Home State Quota or Special Rounds (CSAB).

Ans: Yes, Salary (including bonus) is taxable even if same is not received. There is a concept of ACCRUAL in the income tax based on which it will taxable in FY 24-25

Ans: Hello Dear.
You already know that admission to these institutes is based on the JEE (Adv) score. Try to aim a rank around or below 1000 for a sure shot admission to these IITs. Best of luck for your upcoming JEE (Adv) examination. Thanks
Follow me if you like the reply.
Radheshyam

Ans: If he has coronary artery aneurysms then he needs regular echocardiograms and follow up with a pediatric cardiologist till the aneurysms regress. Till that happens, he is at a risk for myocardial infarctions hence will require lifestyle changes. Most aneurysms regress after a year. But follow ups will be required for some years as will be advised by the cardiologist

Ans: Diversifying into international stocks and alternative assets can be a strategic move, especially given your experience in financial analysis and investment planning. Here’s a breakdown of the benefits and risks of each approach:
International Stocks
Benefits are as follows:
- Diversification – Investing globally reduces dependence on domestic market conditions and spreads risk
- Access to High-Growth Markets – Some international markets, particularly emerging economies, may offer higher growth potential.
- Currency Appreciation – If the foreign currency strengthens against the INR, your returns could increase.
- Exposure to Leading Industries – Developed markets like the U.S. provide access to top tech, healthcare, and finance companies.

Risks involved in international markets are as follows:
- Currency Fluctuations – Exchange rate volatility can impact returns.
- Political & Economic Risks – Foreign regulations, trade policies, and economic instability can affect investments.
- Higher Transaction Costs – International investing often involves additional fees and taxes.
- Limited Information Access – Researching foreign companies may be more challenging compared to domestic firms.

Alternative Assets (Real Estate, Commodities, Private Equity, etc.)
Following are the benefits:
- Low Correlation with Stock Markets – Alternative assets often move independently of traditional markets, helping mitigate volatility.
- Inflation Hedge – Real assets like gold and real estate tend to retain value during inflationary periods.
- Potential for High Returns – Private equity and hedge funds can offer substantial gains if managed well.
- Portfolio Customization – Some alternative investments allow direct control, such as real estate or private businesses.

Risks involved are as follows:
- Illiquidity – Many alternative assets, such as private equity and real estate, are not easily sold.
- Complexity – These investments often require specialized knowledge and due diligence.
- Higher Fees – Alternative investments may have higher management costs and entry barriers.
- Market Uncertainty – Some assets, like cryptocurrencies, can be highly volatile.

Given your methodical approach to financial planning, you might find international ETFs a convenient way to gain global exposure while managing risk. Similarly, REITs or commodity funds could be a structured way to enter alternative assets without direct ownership complexities.