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Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 29, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - May 29, 2024Hindi
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Is SIP in minors name for higher education ,would be beneficial in tax point of view,? when minor becomes major who would be liable to pay taxes Major or parents???

Ans: Certainly, let's delve into the tax implications of investing in SIPs in a minor's name and how it affects taxation when the minor becomes a major.

Understanding SIP in Minor's Name
Investing in SIPs in a minor's name for their higher education can have tax implications for both the minor and the parents.

Tax Benefits of SIP in Minor's Name
Investing in SIPs in a minor's name can offer tax benefits under certain circumstances.

Tax-Free Income: Income earned from investments made in the minor's name is clubbed with the parent's income and taxed accordingly.

Lower Tax Liability: By distributing income among family members, overall tax liability can be reduced.

Taxation When Minor Becomes Major
When the minor reaches the age of majority, the tax implications change.

Tax Liability Shifts: Upon turning major, the minor becomes liable for taxes on income earned from investments made in their name.

Clubbing Provisions: Income earned prior to turning major may still be clubbed with the parent's income for taxation.

Tax Planning Strategies
To optimise tax implications, consider the following strategies:

Utilising Tax Exemptions: Make use of tax exemptions and deductions available for education expenses.

Gradual Transfer of Investments: Consider gradually transferring investments to the minor's name to manage tax implications.

Decision Making
Deciding whether to invest in SIPs in a minor's name for higher education depends on various factors.

Risk Appetite: Assess the risk appetite and investment horizon to determine suitable investment avenues.

Tax Planning Goals: Align investment decisions with long-term tax planning goals and financial objectives.

Considerations for Tax Planning
When making investment decisions for a minor's higher education, consider the following tax planning aspects:

Long-Term Goals: Plan investments keeping in mind long-term financial goals and objectives.

Legal Implications: Understand legal provisions and tax regulations related to investments in a minor's name.

Conclusion
Investing in SIPs in a minor's name for higher education can offer tax benefits and help in long-term financial planning. However, it's essential to consider the tax implications when the minor becomes a major. Consulting with a Certified Financial Planner can provide personalised guidance and help in making informed investment decisions aligned with your tax planning goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

Asked by Anonymous - Apr 16, 2024Hindi
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I have 2 Minor Ons aged 9 and 7, they have Minor PAN and Bank account. I have started SIP investments for them. What are advantages of investing in their name over mine? I want to give them a considerable portfolio when they turn 21. Thanks.
Ans: Building Wealth for Your Children: A Smart Move!
Investing in your minor children's names is a fantastic way to jumpstart their financial future. Here are some key benefits:

Long Investment Horizon: Starting early allows them to benefit from compounding, where returns are earned on both the initial investment and accumulated returns over time. This can significantly grow their corpus by the time they reach adulthood.

Tax Benefits: Minors typically have lower tax brackets than adults. This can result in tax savings on any capital gains generated from their investments.

Financial Discipline: Having a sizeable investment portfolio upon reaching adulthood can instill financial responsibility and provide a head start for their future financial goals.

Investing in Your Name vs. Theirs:

Account Ownership: When you invest in your child's name, they become the legal owner of the investments once they turn 18 (or 21 depending on the investment type).

Control During Minority: As the guardian, you will manage the investments until they reach legal age. You can choose a Certified Financial Planner (CFP) to create a plan aligned with their future goals.

Remember:

Long-Term Goals: Focus on long-term investment horizons to ride out market fluctuations and maximize potential returns.

Risk Tolerance: Consider your children's future needs and risk tolerance when choosing investment options.

Professional Guidance: A CFP can suggest suitable investment options and strategies based on your children's financial goals and risk profile.

By planning early and seeking professional advice, you can ensure your children have a solid financial foundation for their future!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 17, 2024Hindi
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Thankyou for the indepth analysis and encouragement.. im planning to do my sip's in a manner of increasing investment by 15 percent every year .. is it better to do a sip on a mutual fund or begin a tailor-made education policy for an amount of 1 crore for my childs education, within the next 15 years sir? If yes, plz do mention the name of funds, i will do more research
Ans: You have a noble goal to secure your child's education. Increasing SIP investments by 15% annually is a wise approach.

Systematic Investment Plan (SIP)
SIPs in mutual funds can offer substantial growth over time.

Benefits of SIPs
Compounding: Regular investments compound over time. This leads to exponential growth.

Rupee Cost Averaging: Investing a fixed amount regularly reduces the impact of market volatility.

Flexibility: You can start with a small amount and increase it. This matches your plan to increase investments by 15% yearly.

Liquidity: Mutual funds offer easy liquidity. You can withdraw funds when needed for your child's education.

Professional Management: Actively managed funds have professional fund managers. They aim to outperform the market.

Disadvantages of SIPs
Market Risk: SIPs are subject to market risks. However, long-term investments typically smooth out these risks.
Education Policy
Education policies are often insurance products combined with investment.

Benefits of Education Policy
Guaranteed Returns: They offer guaranteed returns. This provides a sense of security.

Insurance Coverage: They often include insurance. This can be beneficial in case of unforeseen circumstances.

Disadvantages of Education Policy
Lower Returns: Returns are usually lower compared to mutual funds. This affects the overall growth of your investment.

Less Flexibility: These policies are less flexible. Early withdrawal may incur penalties.

High Costs: They come with higher costs and charges. This reduces the net returns.

Why SIPs are Better
Higher Returns: Mutual funds, especially equity funds, offer higher returns. This helps in achieving the 1 crore goal faster.

Flexibility and Liquidity: SIPs provide flexibility in investments. They also offer easy liquidity when needed.

Professional Management: Actively managed funds can outperform market indices. This leads to better growth.

Investing Through a Certified Financial Planner
Professional Guidance: A CFP can guide you to choose the best mutual funds. They provide valuable insights and manage your investments.

Regular Funds: Investing through a CFP offers advisory services. Direct funds lack this professional guidance.

Disadvantages of Direct Funds
Lack of Advice: Direct funds do not offer advisory services. This can lead to mismanagement of funds.

Higher Effort: Managing direct funds requires more effort and knowledge. It may not be suitable for everyone.

Avoid Index Funds
Disadvantages: Index funds simply mimic the market. They lack professional management.

Lower Returns: Actively managed funds often outperform index funds. Fund managers adjust for market conditions.

Final Insights
Increasing SIP investments by 15% annually is a wise decision. SIPs in mutual funds offer higher returns, flexibility, and professional management. Education policies, while secure, provide lower returns and less flexibility. Consult a Certified Financial Planner for personalized advice. They can help create a tailored plan to achieve your goal of 1 crore for your child's education.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 18, 2024

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Hai sir ok I agree with you but which sip is good for children education can you Tell me the sip name
Ans: Investing in SIPs for your child’s education is a wise decision. Education costs are rising, and proper planning ensures a secure future for your child. Let me guide you with the right framework to select SIPs without naming specific funds.

Factors to Consider While Choosing SIPs

Investment Horizon

If the goal is more than 10 years away, prefer equity-oriented funds.
For goals within 5 years, consider balanced or debt-oriented funds.
Risk Appetite

Choose large-cap or balanced funds if you prefer stability.
Opt for mid-cap and small-cap funds for higher returns with risk tolerance.
Diversification

Avoid investing in too many similar funds to reduce overlap.
Diversify across fund categories for balanced risk and growth.
Past Performance

Focus on funds with consistent long-term performance.
Check if they outperform their benchmark and category peers.
Fund Manager Expertise

Active funds with skilled managers can deliver better returns.
Evaluate their management style and track record.
For Specific Fund Recommendations

Selecting the right SIP depends on your goals and financial situation.
A Certified Financial Planner or MFD can assess your unique needs.
They will recommend suitable SIPs to match your education goal.
Benefits of Consulting a Certified Financial Planner

A CFP provides a personalised investment plan.
They help monitor and rebalance your portfolio regularly.
This ensures your investments stay aligned with your education goal.
Final Insights

Start SIPs early to benefit from compounding. Contact a CFP or MFD for specific fund recommendations tailored to your goals. A customised approach ensures optimal results for your child’s education.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 06, 2025

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Is it wise to have SIP account opened in my childs name and payment is also made thru his own savings account, guardian is my wife. pls advice i have already taken few SIPs thru this route so that after both my child attain legal age they have sound financials, is this the right route to create long term wealth for my kids ?
Ans: You have taken a thoughtful step toward securing your children’s financial future. Investing in Systematic Investment Plans (SIPs) in their names can provide them with long-term wealth. However, there are important aspects to consider.

Ownership and Control of Investment
Since your child is a minor, the investment account is operated by the guardian.

Your wife, as the guardian, has control until the child turns 18.

After attaining majority, the child must update records for direct ownership.

SIPs continue but require KYC completion in the child’s name.

Taxation Impact of Investing in Child’s Name
Any income from these investments is clubbed with the parent’s income.

The income is taxed in the hands of the higher-earning parent.

Once the child turns 18, taxation applies individually in their name.

If SIPs are equity-based, long-term capital gains tax applies beyond Rs. 1 lakh.

For debt funds, capital gains tax is based on holding period and indexation.

Operational Challenges of SIPs in Child’s Name
Money deposited in a minor’s account must be legally justified as a gift.

Some banks restrict large SIP transactions from a minor’s account.

When the child turns 18, all investments need re-verification.

If KYC updates are not completed, redemptions and further investments may get blocked.

Alternative Approach for Child’s Future Wealth
Instead of opening SIPs in a child’s name, consider investing in your own name and earmarking funds for them.

You can maintain control without KYC changes later.

Taxation remains in your name until you transfer funds.

Flexibility to reallocate funds for child’s education, marriage, or other needs.

No requirement to re-submit documents when they turn 18.

Final Insights
You have chosen the right path by thinking about long-term wealth creation for your children. However, investing in your name with a clear allocation for their future can simplify taxation and operations. This also provides flexibility in managing funds as per future needs.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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Asked by Anonymous - Jul 08, 2025Hindi
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What should I choose.... JAMIA MILLIA ISLAMIA ECE, AMU ECE, NIT PATNA Electrical Engineering , NIT Durgapur Electrical engineering, etc. Female/EWS/OS
Ans: All institutions possess NBA/AICTE accreditation, PhD-qualified faculty, modern specialized laboratories, strong industry MoUs for internships, and active placement cells. Jamia Millia Islamia’s ECE department offers A++ NAAC accreditation, state-of-the-art VLSI, DSP and IoT labs, interdisciplinary research centres and approximately 82% overall B.Tech placement consistency over the past three years despite branch-wise variance. Aligarh Muslim University’s ECE under ZHCET features robust analog/digital and communication labs, mandatory industry training and around 82% placement rate for B.Tech engineering streams with a median package near ?6 LPA. NIT Patna’s EE records a 85% branch-wise placement rate, backed by power-electronics and smart-grid labs, TEQIP-funded infrastructure and 9.9 LPA average package for UG placements. NIT Durgapur’s EE achieved 87% placements, boasts specialized power, control and automation labs, ongoing global research collaborations and an average package of ?14.61 LPA over three years.

For the strongest research culture and interdisciplinary labs, the recommendation is Jamia Millia Islamia ECE. Next, is NIT Durgapur EE for superior average packages and modern power-systems infrastructure. Third, NIT Patna EE for balanced placements and campus-industry linkages. Lastly, I recommend AMU ECE for its consistent median placements and cost-effective education. All the BEST for Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |8204 Answers  |Ask -

Career Counsellor - Answered on Jul 08, 2025

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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