Sir, my mother-in-law is investing in stocks. My father-in-law is getting pension as a senior citizen from govt of Andhra Pradesh. If she becomes tax payer due to stock/MF investments, whether my father-in-law pension will be cancelled.

Ans: Amount received from relative under will or as inheritance is not an Income in the hands of recipient. Further, clubbing provisions is not applicable as amount is received after death as nominee.

Ans: Thank you for asking this thoughtful question. It shows your care for your mother’s well-being and future. Let us examine your concern in a full 360-degree way — with simplicity, clarity, and depth.

About Government Old Age Pension in Andhra Pradesh
The pension is given under the YSR Pension Kanuka scheme.

It is meant for social security, not linked to income tax or investment laws.

The basic aim is to help elderly, disabled, and poor individuals meet daily expenses.

The current monthly pension for senior citizens in Andhra Pradesh is Rs. 3,000.

It is managed by the Department of Rural Development, not Income Tax or SEBI.

Eligibility Conditions for Old Age Pension
Age should be 60 years and above.

The person should belong to a Below Poverty Line (BPL) household.

In some villages, the local revenue staff or panchayat decides eligibility based on ground realities.

There is no official rule that restricts beneficiaries from opening a demat account or mutual fund investment, especially for small amounts.

Can She Legally Open a Demat and Invest in Mutual Funds?
Yes. Any Indian resident above 18 years can open a demat and invest in mutual funds.

Your mother being a senior citizen is fully eligible to open both.

PAN card and Aadhaar are needed. Basic KYC is required.

Even if she has no income tax returns, she can complete KYC as a low-income investor.

A bank account in her name is also needed to link.

Will It Impact Her Government Pension?
Investment up to Rs. 20,000 in mutual funds will not affect her pension.

The scheme does not monitor such small investments in financial markets.

There is no automatic link between mutual fund platforms and pension disbursing bodies.

Even if she receives small dividend or redemption, it is not taxable if her total income is below the basic exemption limit.

But avoid investing large sums in her name. That may attract scrutiny at the village level.

What You Should Be Cautious About
Keep investments below Rs. 20,000, just as you already planned.

Do not invest lump sums beyond this unless you speak to a Certified Financial Planner.

Do not show high-value transactions in her bank account.

If someone files a complaint or raises doubts, the local authority may ask questions.

Maintain simple records — SIP confirmation, account statement, PAN copy, etc.

Do not register her as a guarantor or joint holder in other accounts.

Why It Is Still a Good Move
Investing in her name gives her a sense of dignity and financial inclusion.

The interest or capital growth can act as a buffer fund for health or emergencies.

Even Rs. 20,000 in a balanced mutual fund can grow steadily over time.

Mutual fund platforms offer monthly withdrawal options if needed later.

It creates a documented track record in her name, useful if any future benefit requires it.

Suggested Structure for Your Plan
Open demat and MF account under regular plan, through MFD with CFP credential.

Avoid direct funds, as these are not guided, and no CFP support is given.

Pick an actively managed hybrid fund or conservative balanced fund.

Set up a small monthly SIP of Rs. 500 to Rs. 1000.

Link to a separate bank account, not shared with anyone.

Keep the email and phone number as yours (with her permission) to monitor.

Documentation to Keep Handy
PAN and Aadhaar copies

Bank passbook first page or cancelled cheque

Income declaration (optional, for KYC if required)

Any government document proving pension eligibility (for future clarifications)

Statement of investments once every 6 months for your own tracking

Final Insights
Your mother’s pension will not be affected if you invest a small amount like Rs. 20,000. She is legally eligible to open mutual fund and demat accounts.

Just follow a simple and transparent approach. Keep all documents clean. Invest through a Certified Financial Planner-led MFD. Avoid unnecessary risk or lump sum entries.

You are taking a very thoughtful and noble step. May her small investments bring her pride and support in times of need.

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