Long-Term Capital Gains on Equity Redemption - 30 Lakhs - How to Minimize Taxes?

Ans: Hello A.L.
CSE branch is not possible..You did not mention the category. Assuming OC, with a score of 97.333, you have a chance to get any branch in one of the NITs but surely in IIIT. Please check all the previous cut-offs of all NITs before filling in the options.

Follow me for a prompt reply. Else ask again without hesitation.
Thanks
Radheshyam

Ans: You are in the 30% tax slab. The choice between taking a loan or using your fixed deposit depends on multiple factors. Let’s evaluate both options from a financial and strategic perspective.

Benefits of Taking an Education Loan
Tax Benefits on Interest Paid

The interest paid on an education loan qualifies for a tax deduction under Section 80E. This benefit is available for up to eight years.

Since you fall in the 30% tax slab, this deduction can help reduce your taxable income.

Liquidity Retention

Keeping your fixed deposit intact ensures liquidity for emergencies and other financial goals.

Unexpected medical expenses or job loss can impact cash flow. A loan helps you maintain financial security.

Low-Interest Rates Compared to Other Loans

Education loans usually have lower interest rates than personal loans. Some banks also provide a moratorium period, during which repayment starts after course completion.

Credit Score Improvement

Timely repayment of the loan will improve your credit score. This can help in the future if you need to take another loan.

Disadvantages of Taking an Education Loan
Interest Outflow

Even though the tax benefit reduces the burden, you will still pay more than the actual loan amount due to interest.

If you can afford the expenses without affecting other goals, avoiding interest payments is better.

Loan Repayment Burden

If your son does not secure a high-paying job immediately, the repayment can become stressful.

You may have to step in to make EMI payments, affecting your retirement plans.

Benefits of Using Fixed Deposits
No Interest Outflow

By using your own funds, you avoid paying interest to the bank. The actual cost of education remains lower.

Peace of Mind

Without a loan, you won’t have to worry about monthly EMI payments. This ensures financial stability and mental peace.

Better Financial Freedom for Your Son

If you fund the education yourself, your son starts his career debt-free. This gives him more flexibility in career choices.

Disadvantages of Using Fixed Deposits
Loss of Liquidity

Using the fixed deposit will reduce your emergency funds. If another major expense arises, you may struggle to arrange funds quickly.

Impact on Other Financial Goals

If this fixed deposit was set aside for another financial goal, using it for education may delay that goal.

You need to evaluate whether this will affect your retirement or home purchase plans.

Tax on Fixed Deposit Interest

The interest earned on fixed deposits is fully taxable as per your slab. Since you are in the 30% slab, this reduces your net return.

Key Factors to Consider Before Deciding
Cash Flow Stability

If your monthly income and investments provide enough financial security, paying from the fixed deposit is a good option.

If not, an education loan can help manage cash flow better.

Alternative Investment Options

If your fixed deposit is earning lower returns than the loan interest rate, it makes sense to use it instead of taking a loan.

If your investments are growing at a higher rate than the loan interest, taking a loan is financially better.

Risk Tolerance

If you are comfortable managing debt and can benefit from the tax deduction, a loan can be a strategic decision.

If you prefer a risk-free approach, using your fixed deposit is the better choice.

Optimal Approach for You
Since you are in the 30% tax slab, an education loan can provide tax benefits.

However, if your fixed deposit is earning a lower return than the loan interest, using it can be financially smarter.

If liquidity is not a concern and your retirement plans remain unaffected, funding education yourself is a good choice.

A balanced approach is also possible. You can take a partial loan and use some of your fixed deposit. This way, you reduce the loan burden while keeping some liquidity.

Finally
Taking an education loan has tax benefits and keeps liquidity intact. However, it comes with interest costs and repayment obligations.

Using your fixed deposit saves interest but reduces liquidity and may impact other financial goals.

The decision depends on your financial stability, investment returns, and long-term goals.

A Certified Financial Planner can help structure your finances in the most tax-efficient way.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: First thing is that you were curious towards sex and it is natural. No one can deny sex, because we are born out of sex. You feel guilty because you viewed pornography in a hidden way. Don't be ashamed for that. But certainly due to your addiction your career is damaged. Consider SEX in a natural way but don't allow sex or sex channel to dominate your will power. Set some goals and try to reach them. I am sure you will succeed. Best of luck. Professor

Ans: A 72 percentile in JEE Main is on the lower side, but you can check the opening and closing ranks for 2024 on the JoSAA website to determine your eligibility for specific NITs and branches. Additionally, you should consider reappearing for the April session to improve your score. It’s also wise to have Plan B and Plan C by applying for 3-4 other entrance exams as backup options, allowing you to choose the most suitable college based on your final results. All the Best for your Prosperous Future.

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Ans: If you sell your old house in January-2025 (Registered Deed), you will have to complete the purchase process (by getting it Registered in your name) of house (with 25% your share) with in 2 years from January-2025. This will enable you to claim deduction u/s 54 to save LTCG.
The exemption shall be available for Rs.55.00 lakhs (25% share in purchased property) or your LTCG on sold house, which ever is less.
Most welcome for any further clarifications. Thanks.

Ans: To get an approximate idea about your eligibility for any particular institute/branch, please follow these steps: 1. Calculate your approximate rank based on your percentile using a Google search. 2. Check the JoSAA opening and closing ranks for 2024 to get a general idea of the institutes and branches you might be eligible for, based on your category (EWS). Make sure you fill in your son's preferences accordingly during the actual JoSAA counselling process after JEE Advanced. 3. To better understand the JoSAA counselling process, I recommend watching an EduJob360 video if time permits. 4. Additionally, it’s advisable to appear for 3-4 more entrance exams as backups. Relying only on JEE may limit your options, so it's good to have a broader range of choices to ensure you select the most suitable path for you. All the Best for Your Prosperous Future.

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Ans: Aman Sir, To get an approximate idea about your son's eligibility for any particular institute/branch, please follow these steps: 1. Calculate his approximate rank based on your percentile using a Google search. 2. Check the JoSAA opening and closing ranks for 2024 to get a general idea of the institutes and branches you might be eligible for, based on his category (OBC-NCL). Make sure you fill in your preferences accordingly during the actual JoSAA counselling process after JEE Advanced. 3. To better understand the JoSAA counselling process, I recommend watching an EduJob360 video if time permits. 4. Though 99.71 percentile is an excellent score, it’s advisable to appear for 3-4 more entrance exams as backups. Relying only on JEE may limit your son's options, so it's good to have a broader range of choices to ensure you select the most suitable path for you. All the Best for Your Prosperous Future.

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Ans: To get an approximate idea about your son's eligibility for any particular institute/branch, please follow these steps: 1. Calculate your approximate rank based on your percentile using a Google search. 2. Check the JoSAA opening and closing ranks for 2024 to get a general idea of the institutes and branches you might be eligible for, based on your category (OPEN-GENERAL). Make sure you fill in your son's preferences accordingly during the actual JoSAA counselling process after JEE Advanced. 3. To better understand the JoSAA counselling process, I recommend watching an EduJob360 video if time permits. 4. Additionally, it’s advisable to appear for 3-4 more entrance exams as backups. Relying only on JEE may limit your options, so it's good to have a broader range of choices to ensure you select the most suitable path for you. All the Best for Your son's Prosperous Future.

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Ans: Khaja Sir, To get an approximate idea about your son's eligibility for any particular institute/branch, please follow these steps: 1. Calculate his approximate rank based on your percentile using a Google search. 2. Check the JoSAA opening and closing ranks for 2024 to get a general idea of the institutes and branches you might be eligible for, based on his category (OBC-NCL). Make sure you fill in your preferences accordingly during the actual JoSAA counselling process after JEE Advanced. 3. To better understand the JoSAA counselling process, I recommend watching an EduJob360 video if time permits. 4. Additionally, it’s advisable to appear for 3-4 more entrance exams as backups. As your son's JEE percentile is slightly on lower side & relying only on JEE may limit your options, so it's good to have a broader range of choices to ensure you select the most suitable path for you. All the Best for Your Prosperous Future.

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