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Mihir Tanna  |851 Answers  |Ask -

Tax Expert - Answered on May 24, 2024

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Vinod Question by Vinod on Feb 21, 2024Hindi
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Hi , My In-laws sold their home for 1 cr inbangalore in 2024. they had bought land in 2002 for 1.5 lakhs and built home in 2008 for 25 lakhs. how much tax they need to pay for the captital gain or which bounds are good for investing to avoid the tax. they are 63 yrs old.

Ans: Capital gain amount is derived by deducting indexed cost from sale consideration.

Assuming land is acquired in FY 2002-03 in 1.5 lacs, indexed cost will be Rs.497143 and Assuming property is constructed in FY 2008-09 in 25 lacs, indexed cost will be Rs.6350365. Total will be 6847508

accordingly there will capital gain will be Rs.31,52,492 taxable @20%.

You can calculate the indexed cost from the income tax calculator https://incometaxindia.gov.in/Pages/tools/indexed-cost-of-acquisition-or-improvement.aspx

For bonds please check with bank
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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Relationships Expert, Mind Coach - Answered on Jun 26, 2024

Asked by Anonymous - Jun 21, 2024Hindi
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I got married in 2008. Our son was born in 2013. My wife was doing PhD at that time and we both took good care of him as we were staying in an academic campus. Upon completion, my wife moved away from our place with her job in 2018. Initial one year, everything was fine. I used to visit them once in a month as the place was far away. Later in 2019, she moved to a better job location with our son. This place was also far from my workplace. Due to some reasons, she started avoiding me and I could hardly meet them especially my son. I could talk to my son only once/twice every month and see him on average of every 4 months. She does not allow me talk to him over video call as well. My parents who had a great memory with their grandson also cannot talk to him, except after several persuasions by me, she visits my paternal home once or twice in a year. She takes our son to my parents house for an hour and never allows to stay with them. This is happening for the last 5 years. I am clueless as any movement to court might lead us filing a divorce, which will grossly hurt my parents. Sometimes I feel that I should wait for my son until he becomes 18 (he is 11 now) and see him once he goes out of his mom's house. Requesting for your suggestion.
Ans: Dear Anonymous,
I truly believe that distance can drive a huge gap between two people in a relationship. Long distance relationships (LDRs) are not for everyone and if someone is into something like this, they would have or must have an honest chat about it.
Not being able to be in the company of one another, not being able to share their day with the other, not being able to communicate as often as they want can lead them to become their own person and highly independent not really missing their partner. It can also lead them to find other pair/pairs of ears almost replacing their partner at that moment. Repeating this over time can lead to romantic associations outside of the relationship as well.

Now, what could have caused your wife to take a step to be isolated from you, only you will know...and what has made you wait for 5 years to actually realize that something must be done about this?

Anyway, talk to your wife...I mean, how long can she avoid you? Meet her at a common place, like at your parents' place so that it does not flare up into a big thing. Take the opportunity to try and win your family back. Maybe it was a simple misunderstanding that caused all of this. Only when you try to find out, will you know, yeah?

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Ramalingam Kalirajan  |4054 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 2024

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Hello Sir, I am 45 years old and I have invested through SIP in the following funds since last 13 years. 1. HSBC Flexi Cap Fund - Regular Growth 2. Invesco India Midcap Fund - Regular Growth my question is should I continue with these funds or should I shift to any other fund ? If I should shift then which fund do you suggest ?
Ans: Understanding Your Investment Goals
At 45, your financial goals are likely focused on retirement planning and wealth preservation. It's crucial to align your investments with these goals.

Reviewing Your Current Funds
You've been investing in HSBC Flexi Cap Fund and Invesco India Midcap Fund for 13 years. These funds have given you exposure to both large-cap and mid-cap stocks.

Performance Evaluation
Evaluate the performance of these funds. Check their returns, consistency, and performance against benchmarks. If they have consistently outperformed, they might still be good choices.

Risk Assessment
Assess the risk associated with your current funds. Mid-cap funds can be more volatile compared to flexi-cap funds. Ensure this risk aligns with your risk tolerance.


You've done a commendable job by investing regularly for 13 years. It shows your discipline and commitment to building wealth.

Should You Continue or Shift?
Reasons to Continue
Consistent Performance: If your funds have shown consistent performance, you may want to continue.
Low Exit Load: Exiting a fund with a low exit load or after the exit load period can save you money.
Familiarity: You're familiar with these funds and their performance trends.
Reasons to Shift
Underperformance: If the funds have underperformed compared to peers, it might be time to switch.
Changing Goals: If your financial goals or risk tolerance have changed, you may need different funds.
Market Conditions: Adapting to changing market conditions can sometimes warrant a shift in funds.
Evaluating Alternatives
If you decide to shift, consider funds that align with your goals. Evaluate their performance, risk, and consistency. Diversify across large-cap, mid-cap, and multi-cap funds.

Advantages of Actively Managed Funds
Active Management Benefits
Actively managed funds have fund managers who make strategic decisions to outperform benchmarks. They can adapt to market conditions better than index funds.

Flexibility
Actively managed funds can move in and out of sectors or stocks based on performance and market trends. This flexibility can lead to better returns.

Disadvantages of Index Funds
No Flexibility: Index funds stick to a predetermined portfolio, regardless of market conditions.
Average Returns: They aim to match, not beat, the index, leading to average returns.
Limited Downside Protection: In a downturn, index funds fall with the market, without any active measures to mitigate losses.
Personalized Recommendations
Aligning with Goals
Select funds that align with your retirement goals and risk tolerance. Consider a mix of large-cap, multi-cap, and balanced funds for a diversified portfolio.

Regular Reviews
Regularly review and rebalance your portfolio. Adjust your investments based on market conditions, fund performance, and changes in your financial goals.

Consulting a Certified Financial Planner
Consult a Certified Financial Planner (CFP) for personalized advice. They can provide tailored recommendations based on a comprehensive analysis of your financial situation.

Diversifying Your Investments
Balanced Funds
Balanced funds invest in a mix of equities and debt. They provide stability and growth, making them suitable for retirement planning.

Large-cap Funds
Large-cap funds invest in well-established companies. They offer stability and consistent returns, ideal for conservative investors.

Multi-cap Funds
Multi-cap funds invest across large, mid, and small-cap stocks. They provide diversification and potential for higher returns.

Debt Funds
Debt funds invest in fixed-income securities. They offer stability and are less volatile compared to equity funds.

International Funds
Consider international funds for geographic diversification. They provide exposure to global markets and reduce country-specific risks.

Final Insights
You've done well by investing regularly for 13 years. Evaluating your current funds and considering alternatives is wise as you approach retirement. Systematic Withdrawal Plans (SWPs) offer many benefits, including higher returns, tax efficiency, flexibility, and inflation protection. Diversify your portfolio across balanced, large-cap, multi-cap, debt, and international funds. Regularly review your investments and consult a Certified Financial Planner for personalized advice. This comprehensive approach will help you achieve your retirement goals and financial security.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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Ramalingam Kalirajan  |4054 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 2024

Asked by Anonymous - Jun 26, 2024Hindi
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Mr Ramalingam what do you think is the importance of a regular income payout after retirement ? Are mutual funds only way to create a corpus ? Im talking about a fixed monthly income not a corpus. Can you suggest?
Ans: Importance of Regular Income Payout After Retirement
Financial Stability
Regular income ensures financial stability post-retirement. It covers daily expenses, medical bills, and lifestyle needs without depleting savings.

Peace of Mind
Knowing you have a steady income stream provides peace of mind. It allows you to enjoy retirement without constant financial worries.

Inflation Protection
A regular income helps combat inflation. With rising costs, a fixed income ensures you can maintain your standard of living.

Independence
Having a reliable income allows you to be financially independent. You won't need to rely on family members for financial support.

Health and Well-being
Financial stress can impact health. A regular income contributes to better health and well-being by reducing financial anxiety.

Are Mutual Funds the Only Way to Create a Corpus?
Diversification is Key
While mutual funds are an excellent option, they shouldn't be the only investment. Diversifying across different asset classes reduces risk and enhances returns.

Other Investment Options
Fixed Deposits (FDs): Safe and secure, offering fixed returns.
Public Provident Fund (PPF): Long-term savings with tax benefits.
National Savings Certificate (NSC): Safe investment with fixed returns and tax benefits.
Employee Provident Fund (EPF): For salaried individuals, offering tax benefits and compounded returns.
Real Estate: Can provide rental income, though not recommended as the primary option.
Creating a Fixed Monthly Income
Systematic Withdrawal Plans (SWPs)
SWPs in mutual funds allow you to withdraw a fixed amount regularly. It's a good way to generate monthly income while keeping the corpus invested.

Senior Citizens' Saving Scheme (SCSS)
SCSS is a government-backed scheme offering regular interest payouts. It’s a secure option with decent returns for senior citizens.

Post Office Monthly Income Scheme (POMIS)
POMIS is another government-backed scheme providing fixed monthly income. It’s low-risk and suitable for conservative investors.

Annuity Plans
Annuity plans from insurance companies provide regular payouts. You invest a lump sum and receive a fixed monthly income for life.

Dividend-paying Stocks or Funds
Investing in dividend-paying stocks or funds can provide regular income. However, dividends can fluctuate, so it's not as predictable as other options.

Rental Income
If you own property, rental income can be a steady source of funds. Ensure you account for maintenance and vacancy risks.

Fixed Income Securities
Bonds and debentures offer fixed interest payments. Consider high-quality corporate or government bonds for regular income.

Why SWP Can Outbeat Other Options
Flexibility
SWPs offer greater flexibility compared to other options. You can choose the amount and frequency of withdrawals, adjusting based on your needs.

Potential for Higher Returns
Investing in mutual funds through SWPs can offer higher returns than fixed deposits or POMIS. This is due to the equity component, which can outperform over the long term.

Tax Efficiency
SWPs are tax-efficient. Only the capital gains portion of each withdrawal is taxed, unlike fixed deposits where the entire interest is taxable.

Inflation Protection
SWPs in equity mutual funds provide a hedge against inflation. Equities typically outperform inflation over the long run, maintaining your purchasing power.

Customizable Payouts
You can customize SWP payouts to suit your financial needs. This is not possible with annuities or fixed deposits, which have fixed payouts.

Capital Appreciation
While providing regular income, SWPs also allow for capital appreciation. Your remaining corpus continues to grow, offering long-term benefits.

Professional Management
Mutual funds are professionally managed. Fund managers actively manage the portfolio to optimize returns, unlike fixed income or real estate where you need to manage yourself.

Liquidity
SWPs offer better liquidity compared to other fixed-income options. You can stop or change withdrawals anytime without penalties.

Balancing Risk and Return
Diversified Portfolio
Create a diversified portfolio combining various income sources. This reduces risk and ensures a stable income stream.

Regular Reviews
Regularly review your investment portfolio. Adjust based on changes in your financial situation, market conditions, and inflation.

Professional Guidance
Consult a Certified Financial Planner (CFP) for personalized advice. They can help you create a balanced, diversified retirement income plan.

Final Insights
A regular income post-retirement is crucial for financial stability, peace of mind, and independence. While mutual funds are a great option, diversify your investments across various asset classes. Consider SWPs, SCSS, POMIS, annuities, dividend-paying stocks, rental income, and fixed income securities. SWPs, with their flexibility, potential for higher returns, tax efficiency, and inflation protection, stand out as a superior option. Regularly review and adjust your portfolio with professional guidance to ensure a secure and comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

...Read more

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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