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Vivek

Vivek Lala  |301 Answers  |Ask -

Tax, MF Expert - Answered on Jul 09, 2024

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Mamta Question by Mamta on Jul 09, 2024Hindi
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Hello Sir I am an NRI and I still have an old SB account in India. I have not changed it to NRO or NRI account. I have a Demat account and investments in demat throgh this SB account. And I am still investing in shares through this demat a/c. Now is it better to change the account to NRI account and also update the demat account or can I continue as it is till I shift back to India?. I am not sure if it is that simple. What are the implications please explain.

Ans: Yes please get your SB changed to NRO , and also open a NRE bank account
All the details will be explained by the bank you are banking with
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

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 27, 2024

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Hi. I am currently living in India and have received a job offer from Dubai. As I plan to shift, I needed to understand some nuances about managing my SIPs, Equity Holdings and EMIs in India. I have following: 1. 80K SIP in 2 DSP Funds and 2 Quant Funds 2. 70K EMI for a home loan 3. About 1Cr equity holding in a demat account Once I move, I will let my flat out on rent. Wanted to understand following: 1. For rent collection, EMI, SIP etc what account is advisable? NRE or NRO? For EMIs, SIPs etc I will have to transfer money from overseas account to Indian account 2. For SIPs - I will have to change my existing account to an NRE/NRO account as well? 3. Demat holdings - is there a separate category of demat accounts for NRIs?
Ans: Moving to Dubai while maintaining financial commitments in India requires careful planning. Here's a breakdown of considerations for managing your SIPs, EMIs, and equity holdings:

Account Choice: For rent collection, EMI payments, and SIP investments, opening an NRE (Non-Resident External) account is advisable. NRE accounts allow you to repatriate funds freely, making them suitable for managing finances while abroad. However, for domestic transactions, you can also consider an NRO (Non-Resident Ordinary) account, which has restrictions on repatriation but facilitates local transactions.
SIP Management: You'll need to transition your existing bank account linked to SIPs to an NRE/NRO account to facilitate seamless fund transfers from your overseas account. Ensure you inform your mutual fund provider about the change in bank details to avoid any disruptions in your SIPs.
EMI Payments: Similarly, you'll need to link your home loan EMI payments to your NRE/NRO account for smooth transactions. Set up standing instructions or auto-debit mandates to ensure timely EMI payments while you're abroad.
Demat Holdings: As an NRI, you can hold equity investments in India through a designated NRI demat account. You'll need to convert your existing demat account to an NRI demat account to continue managing your equity holdings seamlessly.
Tax Implications: Be mindful of tax implications both in India and Dubai. Consult with a tax advisor to understand your tax obligations in both countries and optimize your tax planning strategies.
Legal Compliance: Ensure compliance with RBI regulations and other legal requirements concerning NRI investments and remittances to avoid any regulatory issues.
Communication: Maintain open communication with your banks, mutual fund providers, and brokerages to update them about your NRI status and ensure smooth transition and management of your financial affairs.
By proactively addressing these considerations and seeking guidance from financial advisors and legal experts, you can effectively manage your financial commitments in India while pursuing opportunities abroad.

..Read more

Ramalingam

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 07, 2024

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I have invested in mutual funds through savings account in groww. Now the same account is converted to NRO account. Can I continue investigating from the same account? Account number is same and have invested in the same fund after converting to NRO. Should I continue investigating it? Is there anything I need to update about my NRI status?
Ans: Converting your savings account to a Non-Resident Ordinary (NRO) account can bring about several changes, especially when it comes to your investments in mutual funds. Here’s how to navigate your situation effectively.

Continuing Your Mutual Fund Investments
Since you have invested in mutual funds through your Groww account, you can continue investing from your NRO account. Here are some important points to consider:

Same Account Number: Since your account number remains the same, your investments in mutual funds through the Groww platform can continue. The transition to an NRO account does not automatically hinder your investment.

Fund Investment: As long as the mutual fund house allows investments from NRO accounts, you can keep investing in the same funds. However, ensure that the mutual fund you are investing in accepts funds from NRO accounts.

Updating Your NRI Status
When you convert to an NRO account, there are some updates and considerations you should be aware of:

Notify the Fund House: Inform the mutual fund house about your change in status to NRI. This is crucial for regulatory compliance and ensuring that your investments are correctly classified.

Tax Implications: NRI investments are subject to different tax treatments. Capital gains from mutual fund investments are taxed differently for NRIs, particularly with regards to Long-Term Capital Gains (LTCG) and Short-Term Capital Gains (STCG). You should familiarize yourself with these changes to manage your tax liability effectively.

KYC Compliance: Make sure your KYC (Know Your Customer) details are updated according to your NRI status. This may involve submitting new documents that reflect your NRI status, such as a valid passport, visa, and proof of residence abroad.

Why Professional Guidance is Essential
During transitions like converting to an NRO account, it’s often challenging to manage investments independently. Here’s why seeking professional help is advantageous:

Expertise in NRI Investments: A professional Mutual Fund Distributor (MFD) can guide you through the complexities of investing as an NRI. They can help you understand the implications of your status change on your investments.

Tailored Financial Advice: An MFD can provide personalized advice based on your financial goals, risk appetite, and investment horizon, ensuring that your portfolio aligns with your needs.

Assistance with Documentation: Managing the necessary paperwork during this transition can be overwhelming. A professional can help ensure that all required documents are submitted correctly and promptly.

Handholding Throughout the Process: Having an expert to assist you can ease your concerns and help you navigate the investment landscape confidently. They will be there to address any queries you may have and provide ongoing support.

Final Thoughts
You can continue investing from your NRO account using your existing Groww account, as long as you keep the mutual fund houses informed about your NRI status. It’s vital to update your KYC details and understand the tax implications of your investments.

However, managing investments as an NRI can be complex. Therefore, engaging a certified professional MFD is highly recommended. They can provide you with the necessary guidance and support as you navigate this transition.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

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Ravi Mittal  |403 Answers  |Ask -

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Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 08, 2024

Asked by Anonymous - Nov 08, 2024Hindi
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Iam under debt of Rs 10lac and my salary is 23k per month. How to come out from debt and i need to get debt free. So, please guide me.
Ans: Being in debt can be overwhelming, especially on a limited monthly income. But with disciplined planning and commitment, you can gradually achieve financial freedom. Here’s a detailed guide to help you pay off your Rs 10 lakh debt and build a stable financial foundation.

Step 1: Calculate Your Monthly Expenses and Set a Budget
Start by understanding your cash flow. Track every expense to get a clear picture of your spending.

Essential Expenses: These include rent, food, utilities, and any other basic needs.

Discretionary Expenses: Cut back on non-essentials like dining out, entertainment, and shopping.

Savings and Debt Repayment: Dedicate any amount left after essential expenses towards debt repayment.

Tip: Keep a written budget or use a mobile app to monitor your expenses. Reducing discretionary spending will help increase the amount available for debt repayment.

Step 2: Increase Income if Possible
Boosting income, even slightly, can significantly accelerate debt repayment. Here are some ideas:

Freelance or Part-Time Work: If possible, look for freelance work in areas you’re skilled in, like writing, tutoring, graphic design, or programming.

Overtime or Extra Shifts: If your employer offers overtime, consider taking it on to increase your income.

Sell Unwanted Items: Sell items you no longer need, such as electronics, clothes, or furniture, to generate additional cash.

Increasing your income, even temporarily, can help you pay off your debt faster.

Step 3: Create a Debt Repayment Plan
List all your debts, including outstanding amounts, interest rates, and due dates. Here are two strategies for paying them off:

Snowball Method: Pay off smaller debts first to gain momentum, then tackle larger ones. This provides psychological motivation by clearing debts faster.

Avalanche Method: Focus on debts with the highest interest rates first. This method saves more on interest in the long term.

Choose the strategy that suits you best and start making extra payments each month.

Step 4: Prioritize High-Interest Loans and EMI Payments
Debt with higher interest can escalate quickly, so prioritize clearing them first. Some common examples include:

Credit Card Debt: If part of your debt is on credit cards, try to pay it down as quickly as possible. Credit card interest rates are often the highest.

Personal Loans: If your Rs 10 lakh debt includes high-interest loans, prioritize these over lower-interest obligations.

Contact your creditors to explore if they can reduce your interest rate temporarily. Any reduction helps ease the debt burden.

Step 5: Consider Debt Consolidation Options
Debt consolidation combines multiple loans into a single, lower-interest loan, making it easier to manage. Options include:

Personal Loans: Look for a lower-interest personal loan to pay off existing debts. This can reduce the overall interest burden.

Balance Transfer: If a major portion of your debt is on a credit card, look for a card offering a low or zero-interest balance transfer option.

Be cautious of fees associated with consolidation options and make sure to do thorough research. Consolidation can simplify payments and potentially save you money on interest.

Step 6: Start a Small Emergency Fund
While repaying debt is crucial, having a small emergency fund (around Rs 5,000–Rs 10,000) can help you avoid additional debt. This fund is for unexpected expenses like medical emergencies or car repairs.

Building a small emergency cushion ensures you don’t rely on credit if unplanned expenses arise. Once your debt is cleared, you can gradually build a larger emergency fund.

Step 7: Avoid Taking on New Debt
Avoid credit cards, loans, or any new debt until you’ve repaid the current amount. New debt will delay your goal of becoming debt-free.

Instead of borrowing, prioritize saving for any purchases. Practicing patience with spending decisions will help prevent additional debt.

Step 8: Automate and Regularize Payments
Set up automated payments for your debt EMIs and monthly bills. Automation helps prevent missed payments, which can incur penalties and hurt your credit score.

If automated payments aren’t possible, set reminders to ensure timely payments.

Step 9: Track Progress and Stay Motivated
Track your progress each month and celebrate small wins, such as reaching specific milestones in debt reduction.

Seeing your debt balance decrease, even gradually, can keep you motivated.

Step 10: Seek Professional Guidance If Needed
If you feel overwhelmed, consider seeking guidance from a Certified Financial Planner (CFP). They can help you devise a structured plan tailored to your specific financial situation.

A CFP can also provide personalized advice on managing and reducing debt efficiently.

Finally
Your determination to achieve a debt-free life is commendable. By following these steps and staying disciplined, you’ll gradually pay off your debt and move toward financial freedom. Remember, small steps today will lead to a financially secure tomorrow.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

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

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Ramalingam

Ramalingam Kalirajan  |6995 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 08, 2024

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Dear sir/Ma'am, I want to invest long term mutual fund for my daughter marriage. She is now 15 years old and i want to invest for 10 years, please advised me which mutual fund best for me. My monthly investment amount is Rs. 5000.00/- please reply soon as soon possible.
Ans: Investing for your daughter's marriage is a thoughtful goal. With 10 years to grow your investment, mutual funds offer a practical approach to help achieve this objective. A disciplined investment of Rs 5000 per month can build a substantial corpus over time. Here’s a comprehensive guide to structuring this investment for long-term success.

Choosing the Right Type of Mutual Funds
For a 10-year horizon, equity mutual funds are suitable. They have the potential for higher returns over time. Considering a diversified mix of equity categories could balance growth with stability.

Equity-Oriented Funds: With their higher growth potential, equity funds can be ideal for long-term goals like marriage. Large-cap funds or diversified equity funds with a mix of large- and mid-cap investments can provide relative stability.

Balanced or Hybrid Funds: These funds allocate a portion to both equity and debt. This approach reduces risk while still capturing growth. Hybrid funds could be a good option to add stability.

Avoid Index Funds: While index funds are popular, they lack flexibility in managing market changes. Actively managed funds, however, allow fund managers to navigate market fluctuations, potentially offering higher returns.

Benefits of Regular Funds vs. Direct Funds
When considering direct funds, you miss out on expert guidance, which is vital for long-term investments. Regular funds through a Certified Financial Planner (CFP) ensure you get continuous support, fund reviews, and performance tracking. They help rebalance your portfolio when required, maximizing your returns and managing risks effectively.

SIP (Systematic Investment Plan) for Steady Growth
Setting up a monthly SIP of Rs 5000 is a practical approach. SIPs allow you to invest consistently, regardless of market highs and lows, which averages out costs over time. This approach, known as “rupee cost averaging,” helps reduce the impact of volatility.

Tax Implications on Mutual Fund Investments
Understanding tax rules on mutual funds is important.

Equity Mutual Funds: Gains above Rs 1.25 lakh attract a 12.5% tax on Long-Term Capital Gains (LTCG). Short-Term Capital Gains (STCG) are taxed at 20%.

Debt Mutual Funds: Both STCG and LTCG are taxed based on your income tax slab.

These tax rates are subject to change, so it’s crucial to monitor tax policies periodically. You may consult a tax advisor for updates and efficient tax planning.

Key Investment Tips to Reach Your Goal
Consistency: Stay disciplined with your SIPs to leverage compounding. Missing contributions can reduce the growth potential.

Regular Monitoring: Review fund performance at least once a year. This ensures the selected funds are meeting your expectations and objectives.

Professional Guidance: Consult a CFP periodically to align your investments with your financial plan. They can advise on any required adjustments to optimize your portfolio.

Adjusting for Inflation and Goal Cost
Over time, inflation will impact the cost of your daughter’s marriage. Your CFP can help you estimate the future value and adjust your SIP amount if needed. Gradually increasing the SIP amount can help you meet the target despite inflation.

Final Insights
Your commitment to this goal is commendable. By selecting the right mix of funds, maintaining discipline with SIPs, and staying informed on tax and fund performance, you’ll be well on your way to achieving the desired corpus for your daughter’s marriage.

Invest with confidence, plan regularly, and stay on track toward building a secure financial future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Radheshyam

Radheshyam Zanwar  |1033 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Nov 08, 2024

Asked by Anonymous - Nov 08, 2024Hindi
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Career
Hello! I am looking to change my career. Currently, I work as a DTP Operator and Graphic Designer in my maternal uncle's offsset printing press business. My father passed away 8 years ago, so my maternal uncle has taken on the responsibility of me, my mother, and my brother. I have been working under them for the past 5 years as a favor of them. However, there has been no financial growth or development in my current position. But maternal uncle asks me to continue to work with them as their childrens are out of their Offset Printing profession. So they expect me to handle the business in future. But this will not happen. Also I'm not sure of the future scope of Offset Printing Press profession due to digitization. Though my mind is telling me to change profession, as of my financial condtion is weak I would have to start again from zero. I am feeling unsure about what to do?
Ans: Hello.
Presently you are working as a DTP operator and Graphic Designer with your uncle. It seems that due to financial problems, your uncle might be taking undue advantage of your situation and taking it granted that you must work for him and his printing press as a bull for 24x7. You said, your uncle's children are not interested in running the printing press. Hence he is expecting to handle the business in the future. I think this is a golden time to negotiate with your uncle from a business point of view and put some terms and conditions in front of him. You must overtake the printing press fully in your control and share some part of the profit with him. Remember, you are young, have solid experience of 5 years and the most important thing is that, your uncle is not dependent on you only. This makes the situation in your favor. If your uncle is not ready to hand over the printing press business to you, then you have an option to search for another job and tell your uncle also in this regard. I can fairly say, your uncle will not think to lose you under any condition. In life, nothing is impossible, With the hands-on experience of 5 years, you may job in an advertising company and a reputed publishing house. Related to your insecurity feeling, even though you are working with your uncle, you are feeling insecure. Hence either force your uncle to accept your terms and conditions or leave him without any hesitation. Try with new people, new organizations, and new opportunities. A little change will make a big change in your life.
Best of luck for your bright future.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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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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