Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Sanjeev

Sanjeev Govila  |458 Answers  |Ask -

Financial Planner - Answered on Jul 23, 2023

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
Prasanna Question by Prasanna on Jul 21, 2023Hindi
Listen
Money

Sir, I am prasanna , retiring from Central Govt service shortly. Retirement benefits to the tune of about 65 lakhs , I want to transfer it to the account of my wife. What will be the tax implication. Whether this decision is prudent or not. Just I want to make my wife financially independent I smy motto of transferring the amount

Ans: The tax implications of transferring retirement benefits to a spouse in India:-

Gift tax: Gifts between spouses are exempt from gift tax, so you will not have to pay any gift tax when you transfer your retirement benefits to your spouse.

Clubbing provisions: All the income arising from the assets gifted to your spouse will be clubbed with your income and taxed in your hands. This means that you will be taxed on the interest income, capital gains, etc, arising from the investments made with the gifted amount.

All-in-all, you may not find much benefit of transferring the money to your spouse with an added headache of showing spouse’s income from such assets in your name when the TDS etc would have been deducted in her name.
We do not recommend you to do it.
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.
Money

You may like to see similar questions and answers below

Hardik

Hardik Parikh  |106 Answers  |Ask -

Tax, Mutual Fund Expert - Answered on Jul 27, 2023

Listen
Money
Hardik Sir, i am retiring from Govt services shortly, all the pension benefits which i get , i would like to give it to my wife, will there be any tax implication to her for this one time transaction. Whether it is advantageous or dis advantageous to transfer to wife as one time gift, i want her to take the responsibility of this amount of around 60 lakhs.
Ans: Dear Prasanna,

Firstly, congratulations on your upcoming retirement. It's a significant milestone, and I'm here to help you navigate the financial aspects of it.

Now, coming to your question about transferring your pension benefits to your wife. As per the Income Tax laws in India, any gift received from specified relatives, such as a spouse, is not treated as income. Therefore, it is fully exempt from income tax. So, if you decide to give your pension benefits to your wife as a one-time gift, there won't be any immediate tax implications for her.

However, there's an important aspect to consider. While the gift itself is tax-free, any income generated from this gift (for example, if your wife invests this amount and earns interest or dividends) would be clubbed with the income of the giver, i.e., you, and taxed accordingly. This is known as the clubbing of income.

In conclusion, gifting your pension benefits to your wife could be a good idea if the aim is to let her manage the funds. However, the income generated from the gifted amount would still be taxable in your hands.

I hope this clarifies your query.

Best,
Hardik

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |4830 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Ramalingam

Ramalingam Kalirajan  |4830 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Listen
Money
I am a salaried person My take home earning is 39.5K I have two daughter out of which elder one has completed teenage and second is teenager now. I am living on rent Please Suggest Some SIP funds name along with amount suggestion so that I can make my own home in next 10 years along with family liabilities. MY savings would be about 10 L - 11 L within six months.
Ans: You earn Rs. 39,500 per month. You have two daughters, one in her teens and the other has completed her teenage years. You live on rent and aim to buy a home in the next 10 years. Your savings will be about Rs. 10-11 lakhs within six months.

Investment Strategy
Monthly SIP Allocation
Given your goal of buying a home in 10 years, consider the following SIP allocations:

Large-Cap Funds: Allocate Rs. 5,000 monthly. These funds provide stability and steady returns.

Multi-Cap Funds: Allocate Rs. 5,000 monthly. These funds balance investments across different market capitalizations.

Hybrid Funds: Allocate Rs. 5,000 monthly. These funds mix equity and debt, balancing risk and return.

Mid-Cap Funds: Allocate Rs. 2,000 monthly. These funds offer higher growth potential with moderate risk.

Small-Cap Funds: Allocate Rs. 2,000 monthly. These funds can yield high returns but are riskier.

Lump Sum Investment
When your savings reach Rs. 10-11 lakhs, invest a portion in mutual funds and keep some as an emergency fund.

Emergency Fund: Keep Rs. 2-3 lakhs in a high-interest savings account or liquid fund.

Equity Mutual Funds: Invest Rs. 5 lakhs in a combination of large-cap, multi-cap, and mid-cap funds.

Debt Funds: Invest Rs. 2-3 lakhs in short-term debt funds for stability and moderate returns.

Diversification and Risk Management
Diversify Investments: Ensure your investments are spread across different asset classes to reduce risk.

Regular Monitoring: Review your investments periodically to ensure they are aligned with your goals.

Professional Advice
Consider consulting a Certified Financial Planner. They can help tailor a plan to your specific needs and risk tolerance.

Final Insights
Start monthly SIPs in a diversified portfolio.

Allocate lump sum savings wisely.

Diversify investments to manage risk.

Regularly monitor your investments.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4830 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 09, 2024Hindi
Listen
Money
I am 41 single female ,no kids, no dependents with no ancestral/ property for self. Just started MF 13k a month (in axis small cap 5k, axis flexi cap 5k & axis bluchip 3k) , PPF has 5L , NPS(T1) has 3L balance.PPF 8.5k a month & 6K in NPS are monthly investments apart from SIP. I m living on rent 21k a month . no EPF balance . Monthly fixed expenses are 70k , car loan & card emi 40k .I make about 1.4L a month. Have health insurance for 1cr . How much more should I invest on monthly basis to have a good retirement? Also the dilema of buying a house flat is always, as there are no dependents/ don't see any in future..no marriage plans in future too. So is it okay to stay on rent ? I have no other savings from the one mentioned above. I have utilised 80 C & 80 D investments completely car insurance & health insurance is about 60k a year
Ans: Current Financial Position

You have a well-structured investment plan with mutual funds, PPF, and NPS. Your monthly investments are focused on SIPs and contributions to PPF and NPS.

Investment Goals

Retirement Planning: Building a comfortable retirement corpus.

Debt Management: Paying off your car loan and credit card EMIs.

Housing Decision: Deciding between renting and buying a house.

Assessment of Current Investments

Mutual Funds (Rs 13,000 per month): You are investing in small cap, flexi cap, and bluechip funds. This provides a mix of high growth potential and stability.

PPF (Rs 5 lakhs): Offers safety and tax benefits. Your monthly contribution is Rs 8,500, which is good for long-term growth.

NPS (Rs 3 lakhs): Provides an additional retirement corpus with tax benefits. Your monthly contribution is Rs 6,000.

Recommendations

1. Increase Monthly Investments

To achieve a good retirement corpus, increase your monthly investments. Aim to save and invest at least 30% of your income. This means increasing your monthly investments to around Rs 42,000.

2. Focus on Debt Management

Prioritize paying off your car loan and credit card EMIs. This will free up funds for additional investments and reduce financial stress.

3. Housing Decision

Renting is a viable option if you do not have dependents and no plans to marry. It provides flexibility and avoids the long-term commitment of a home loan. Investing the funds instead of buying a house can potentially yield better returns.

4. Diversify Your Portfolio

While your mutual funds are well-chosen, consider adding a few more diversified funds to spread risk. Avoid direct funds; instead, invest through a Certified Financial Planner for better management and advice.

5. Maximize Tax Benefits

You are utilizing Section 80C and 80D benefits. Continue to do so and explore other tax-saving investments that align with your goals.

Final Insights

Your financial planning is on the right track. Focus on increasing investments and paying off debt. Renting is a practical choice given your circumstances. A diversified and well-managed investment portfolio will ensure a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4830 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 08, 2024Hindi
Listen
Money
Hello, I am 39 and I earn 1.5 lacs per month after Tax and Mandatory PF deduction. I have a total Loan EMI of around ?60,000 which will continue for the next 9 yrs. I have 38 lacs in provident Fund, 5 lacs in PPF, 5 lacs in Bank FD and 15 lacs in Equity MF(?40000/- SIP in 5 Different High Risk Portfolio). I am planning to retire at 50. Kindly guide me how to reach ?3 Crore Corpus Savings/Investment in the quickest possible way.?
Ans: Current Financial Overview
You earn Rs. 1.5 lakhs per month. You have a loan EMI of Rs. 60,000 for the next nine years. Your savings include Rs. 38 lakhs in provident fund, Rs. 5 lakhs in PPF, Rs. 5 lakhs in FD, and Rs. 15 lakhs in equity mutual funds. You invest Rs. 40,000 monthly in high-risk SIPs.

Goal Assessment
You aim to retire at 50 with a Rs. 3 crore corpus. Let's strategize to achieve this goal.

Investment Strategy
Increase SIP Contributions
To reach your goal, consider increasing your SIP contributions. Allocate more funds to a mix of mutual funds with varying risk profiles.

Large-Cap Funds: For stability and steady growth.

Multi-Cap Funds: For balanced exposure across market capitalizations.

Hybrid Funds: For a mix of equity and debt, balancing risk and return.

Increase your SIP contribution as your income grows or expenses reduce.

Optimize Current Investments
Provident Fund
Your provident fund is a strong base. Continue contributing to it for tax benefits and steady returns.

PPF and FD
PPF and FD offer safety but lower returns. Consider moving some FD funds to equity mutual funds for higher growth.

Debt Management
Loan Repayment
Prioritize repaying high-interest loans first. Consider refinancing to reduce interest rates. This will free up more funds for investment.

Diversification and Risk Management
Avoid Overconcentration
Ensure your investments are diversified. Avoid overconcentration in high-risk funds. Balance your portfolio with low and medium-risk investments.

Professional Advice
Consider consulting a Certified Financial Planner. They can help tailor a plan to your specific needs and risk tolerance.

Final Insights
Increase SIP contributions in a diversified portfolio.

Balance high-risk funds with stable investments.

Optimize existing investments for better returns.

Focus on debt repayment to free up funds.

Consider professional financial advice for a tailored plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4830 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 07, 2024Hindi
Listen
Money
Hi I need advice from you. After 18.5 years of experience corporate sector, I lost my job recently. I am now in a confusion state that, should I again try for job ? or do business/ small job ? Currently my MF portfolio is 1 Cr ( Quant small 70 lakhs , HDFc mid cap 20 lakhs , Nippon small cap 8 lakhs, Canara roboco ELSS 2 lakhs) , having 10% profit as on date Also , I am planning to sell a land which is not growing as expected ( Approx 20 lakhs ) I have 2 houses , would like to sell one , ( Approx 50 lakhs ) Planning to Move all these funds into mutual funds With approx 1.7 cr, can I retire?
Ans: Assessing Your Current Financial Situation
You have significant investments and assets. Your mutual fund portfolio is Rs. 1 crore with a 10% profit. You plan to sell land for Rs. 20 lakhs and a house for Rs. 50 lakhs, totaling an additional Rs. 70 lakhs. This would bring your total available funds to Rs. 1.7 crore.

Considering Retirement Feasibility
Living Expenses
To assess if you can retire, estimate your monthly living expenses. Include housing, food, healthcare, insurance, and leisure. For a comfortable retirement, consider inflation and increasing medical costs.

Withdrawal Rate
A safe withdrawal rate is around 4% per year. With Rs. 1.7 crore, you could withdraw Rs. 6.8 lakhs annually, or around Rs. 56,000 monthly. Ensure this aligns with your expected expenses.

Reinvestment Strategy
Diversified Mutual Funds
Consider reallocating your investments for diversification and risk management. Your current portfolio is heavily skewed towards small and mid-cap funds.

Large-Cap Funds: Include these for stability and steady returns.

Multi-Cap Funds: Offer exposure across market capitalizations, balancing risk and reward.

Hybrid Funds: Invest in both equity and debt for balanced growth and stability.

Systematic Withdrawal Plan (SWP)
Consider an SWP for regular income. This will provide a steady cash flow while keeping your principal invested.

Alternative Options
Starting a Business
Starting a business can be rewarding but involves risks. Consider your interests, market demand, and initial investment. A small job could also provide income and maintain financial stability.

Seeking Employment
Returning to a corporate job can provide stability and benefits. It can also help you grow your retirement corpus further before fully retiring.

Final Insights
Evaluate your monthly expenses and future financial needs. Reallocate your portfolio for diversification. Consider an SWP for steady income. Explore small jobs or business opportunities, but weigh the risks. Returning to a corporate job can offer stability and growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |4830 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Asked by Anonymous - Jul 07, 2024Hindi
Listen
Money
Hii...I am 32 and having 1 daughter of 3 years. I am currently working in a PSB with having salary of appx. 1.20 lac. My protfolios- 1. Shares- 4 lac 2. MF- 8 lacs 3. PPF- 10 lacs 4. Sukanya- 4 lacs 5. FD- 4 lacs 6. Property- 100 lacs Please suggest me for best investment plans.
Ans: Current Financial Position

You have a good salary and a well-diversified portfolio. Your investments include shares, mutual funds, PPF, Sukanya Samriddhi Yojana, FD, and property.

Investment Goals

Child’s Education and Marriage: Planning for your daughter's future.

Retirement: Building a corpus for a comfortable retirement.

Wealth Growth: Maximizing returns while managing risk.

Portfolio Assessment

Shares (Rs. 4 lakhs): Good for long-term growth but carry higher risk.

Mutual Funds (Rs. 8 lakhs): Provide diversified exposure. Consider actively managed funds for better returns.

PPF (Rs. 10 lakhs): Safe investment with tax benefits. Suitable for long-term goals.

Sukanya Samriddhi Yojana (Rs. 4 lakhs): Excellent for your daughter’s future. Offers high interest and tax benefits.

Fixed Deposits (Rs. 4 lakhs): Safe but lower returns. Use for short-term needs and emergencies.

Property (Rs. 100 lakhs): Significant asset but consider its liquidity and maintenance costs.

Recommendations

1. Increase SIP Investments

Regularly invest in SIPs. Choose diversified equity and balanced funds. Aim to increase your SIP amount by 10% each year.

2. Child’s Education and Marriage Planning

Continue investing in Sukanya Samriddhi Yojana. Consider child-focused mutual funds. These funds align with educational goals and future expenses.

3. Retirement Planning

PPF is a good start. Supplement it with mutual funds. Consider a mix of equity and balanced funds for growth and stability.

4. Portfolio Diversification

Maintain a diversified portfolio. This spreads risk and maximizes returns. Balance between equity, debt, and government schemes.

5. Active Fund Management

Avoid direct funds. Use regular funds through a Certified Financial Planner. They offer professional management and better guidance.

6. Minimize Real Estate Investment

Real estate is illiquid and requires maintenance. Focus on more liquid investments like mutual funds and PPF.

Final Insights

You have a strong financial base. Enhance it with disciplined SIP investments and diversified funds. Consult a Certified Financial Planner for personalized advice and active fund management.

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x