Hello sir I m a salaried person of amount Rs. 10 lacks/ anum, what is the correct way to use of my salary with minimise the tax liability also. I am investing only LIC PPF,MF, & STOCKS ONLY & interested in property & gold. Also suggest the percentage by allocation in DIFFERENT tools with expense also.

Ans: As per the details mentioned above section 80C is completely covered.

In order to avail further benefit, you can avail medical insurance premium under section 80D. You can claim deduction upto 25,000 on premium paid towards medical insurance for self, spouse and children and parents below 60 years of age and Rs. 50,000 if parents are above 60 years of age.

You can also avail an additional deduction of 50k by investing in NPS.

Ans: You can consider a home loan. I am assuming that this house will help you save Rs 18,700 in rent. (Rs 2.24Lpa). Vs this on the Rs 40L downpayment you will lose FD interest of Rs 3.2L pre tax (FD at 7% and Equity at 15% assumed) which works out to only Rs 2.29L post tax on the FD interest. Further you would now get tax deduction on your home loan of Rs 2L pa. You would lose HRA benefit. (You need to compute this based on various HRA conditions). You tax saving on home loan is definitely going to be higher.
Thus, the home loan is beneficial to you from a tax saving basis and based on your current circumstances. However, you need to consider other factors like your repayment capacity of your EMI on home loan and also its impact on your savings into stocks, MF, etc. for the future.

Ans: presuming you have exhausted the limit of Rs. 1.50 Lacs with your existing PPF, LIC etc, you may still have room for investment u/s 80CC(1) and 80CC(2), which are central govt schemes for investment in pension schemes like Atal Pension yogana which gives additional deduction of Rs. 50 K. You can claim your bank interest in Sec. 80TTA. Claim donations, if any in 80G. in case if you have any housing loan, interest upto Rs. 2.00 Lacs is deducted from salary and net salary is offered to tax. The principle portion can be deducted from Rs. 1.50Lac slab also

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 have shared your situation in great detail. That itself is a very strong step. You are only 34, and already covering important areas like EPF, insurance, Sukanya Samriddhi and home purchase. Your clarity about retirement and your daughter’s future is praiseworthy. Let me take a 360-degree view of your situation and guide you with a structured plan.

» Income and Current Commitments

Your annual income is Rs. 12 lakh.

EPF contribution is modest at Rs. 1,800 per month.

Term insurance is Rs. 16,000 yearly.

Family medical insurance is Rs. 12,000 yearly.

Home loan EMI is very high at around Rs. 2.5 lakh per month.

Rental income is Rs. 19,500 monthly, which partly offsets the Rs. 20,000 rent outflow.

Monthly housing expenses are Rs. 18,000.

You also hold Rs. 6.5 lakh in Fixed Deposit.

Sukanya Samriddhi contribution of Rs. 1.5 lakh per year is a good long-term step.

» First Assessment of Home Loan

EMI shown is Rs. 2.5 lakh monthly. That seems unusually high for Rs. 35 lakh loan.

At 7.7% with 360 months, EMI should be about Rs. 25,000, not Rs. 2.5 lakh.

Please recheck the figure. If EMI is Rs. 25,000, then it is manageable.

If it is really Rs. 2.5 lakh, then you are over-committed and must restructure.

For this advice, I will assume it is Rs. 25,000, since that is logical.

» Insurance Protection Review

You are the sole earner for a family of three.

Term insurance of Rs. 16,000 premium suggests a cover of Rs. 1–1.5 crore.

This is not sufficient. At least Rs. 2.5–3 crore cover is needed at your age.

Term insurance is the cheapest way to safeguard your family.

Please increase the cover to protect against income loss risk.

Health cover of Rs. 12,000 per annum seems adequate, but check sum insured.

With rising medical costs, keep minimum of Rs. 10 lakh cover for family.

» Sukanya Samriddhi Account

Your contribution of Rs. 1.5 lakh yearly is the maximum limit.

This builds a strong education and marriage corpus for your daughter.

The scheme is tax-free and government backed, very safe.

Continue till maturity. It will grow into a solid base.

But do not depend only on this for education. You need parallel market-linked growth.

» Fixed Deposit Holdings

Rs. 6.5 lakh in FD is safe but returns are low.

FD interest is fully taxable.

Keeping some FD is fine for emergency needs.

But over time, move surplus into mutual funds for growth.

» Retirement Planning Gap

Current EPF balance is Rs. 24,000 only.

Monthly contribution of Rs. 1,800 is small for a Rs. 12 lakh salary.

By retirement, this will not be sufficient.

You need to build a much larger retirement corpus through equity investments.

At least 25–30% of monthly income should be invested for retirement.

» Investment Strategy for Growth

Continue Sukanya contribution for daughter’s future.

Keep Rs. 3–4 lakh in FD as emergency fund.

Divert remaining FD into mutual funds gradually through systematic transfers.

Focus on actively managed diversified equity funds, not index funds.

Index funds look low-cost, but they lack protection in market downturns.

Actively managed funds by skilled managers give better risk-adjusted return.

Invest through Certified Financial Planner guided distributor, not direct funds.

Direct funds may save commission, but you lose personalised planning and review.

Regular funds with expert monitoring keep you disciplined and aligned.

» Monthly Cash Flow Structuring

Salary income: Rs. 1 lakh monthly (after tax approx).

Rental income: Rs. 19,500 monthly.

Rent expense: Rs. 20,000 monthly.

Home loan EMI: Rs. 25,000 monthly (assuming corrected figure).

Household expenses: Rs. 18,000 monthly.

Sukanya contribution: Rs. 12,500 monthly equivalent.

Insurance premiums: Around Rs. 2,300 monthly equivalent.

Balance available can be invested in mutual funds for growth.

Start with Rs. 20,000 per month in diversified equity funds.

Increase by 5–10% every year as income grows.

» Tax Saving Opportunities

Continue EPF, Sukanya, and home loan repayment.

These already qualify for Section 80C benefit.

With Rs. 1.5 lakh Sukanya, plus EPF, you already exhaust 80C.

Term insurance premium also comes under 80C.

Home loan interest up to Rs. 2 lakh yearly is deductible under Section 24(b).

Medical insurance premium qualifies under Section 80D.

Use National Pension System (NPS) for additional Rs. 50,000 deduction under 80CCD(1B).

Avoid investing just for tax saving. Tax saving should align with long-term goals.

» Child’s Education and Marriage Planning

Sukanya will cover part of the need.

Education costs are rising faster than inflation.

You need an additional education corpus of Rs. 25–30 lakh in 15 years.

Marriage may need Rs. 20–25 lakh.

Build this through equity mutual funds with long horizon.

Start dedicated SIPs for education and marriage goals.

» Risk Diversification Approach

Do not depend on one product.

Mix of EPF, Sukanya, mutual funds, and FD gives balance.

Equity gives growth, debt gives stability.

Keep gold allocation up to 5–10% for diversification.

Avoid ULIPs and endowment policies. They give poor returns and low insurance.

If you hold any such LIC plans, better to surrender and redirect to mutual funds.

» Managing Rent and House Ownership

You are paying Rs. 20,000 rent and also paying EMI.

Rental income offsets rent expense almost fully.

Long term, consider moving into own house when financially comfortable.

This will reduce dual outflow.

Till then, keep using rent as tax benefit also.

» Emergency and Liquidity Planning

Keep six months’ expenses in liquid form.

This should be around Rs. 5–6 lakh.

FD or liquid mutual funds are good for this.

Do not touch emergency fund for investments.

» Reviewing Portfolio Regularly

Review investments every year.

Increase SIP amount with income.

Rebalance equity and debt allocation when markets swing too much.

Track insurance cover as responsibilities change.

Adjust goals when daughter’s needs get clearer.

» Finally

You have already created a strong base with Sukanya, insurance, and EPF.

Main gaps are in retirement savings and child’s higher education planning.

Strengthen life insurance cover.

Build long-term wealth through diversified equity mutual funds.

Use professional Certified Financial Planner support to avoid emotional mistakes.

Avoid index funds and direct funds, as they reduce quality of planning.

Balance safety with growth. Stay consistent for next 20–25 years.

This will ensure both retirement comfort and your daughter’s secure future.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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