Busy CA Daughter-in-Law: Feeling Overwhelmed by Household Chores and Tense MIL

Ans: Dear Anonymous,
What can you do if your father has a rigid thinking like this? Like you yourself have mentioned: that your father must see what you saw in this person.
So, how much effort has gone into that? It seems that all of you are quick to judge that your father is strict and that he does not like people from certain states etc...Okay, he is who he is, right? So, now tune your efforts from complaining about him to what you can do to make him see the good in your partner.
Also, I hope that your partner is in a reasonably good financial state for his age else this will become an issue with your father.
Address your father's concerns and that will help you and your partner actually move things further. You becoming financially independent also will give your father confidence that you are old enough to make certain decisions of your life.

Also, your mother supporting you is of little use; if your father has always been in charge, she will have little say in the matter, so do not depend on anyone right now. Take it upon yourselves now to address what your father finds worrisome and take each point and build something useful to counter that.
It will not be possible or wise to force him to agree as that may not happen, so work on actually making him see what you see in your partner.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

Ans: Some of the options for your Son: National Defence Academy (NDA), Combined Defence Services (CDS), B.A. in Defense and Strategic Studies (please check the websites of these Universities: Madras University, Alagappa University, Bharathiar University, Dr. MGR University) & NCC cadets with a 'C' certificate can apply directly to SSB without written exams. All the BEST for Your Son's Prosperous Future.

To know more on ‘ Careers | Education | Jobs’, ask / follow Us here in RediffGURUS.

Ans: Start by setting aside a calm moment to have a serious discussion with your wife about how her behavior affects you and the children. Use "I" statements to express your feelings, like "I feel hurt when you compare me to other men" or "I feel stressed when our discussions turn into arguments." This approach can help her see your perspective without feeling attacked.

Next, it might be helpful to set some boundaries. Explain that while you're committed to your marriage, you can't tolerate behavior that is disrespectful or harmful to the family. Clearly define what is acceptable and what is not, and let her know that continuous conflicts will have consequences for your relationship.

Consider seeking professional help through couples therapy or counseling. A neutral third party can help facilitate conversations, address underlying issues, and improve communication between you two. If your wife is resistant, you might still consider going alone to seek support and strategies for yourself.

When discussing her conversations with other men, emphasize your concerns for her safety and emotional well-being. Let her know that these interactions can create more significant issues in your relationship, especially with children involved. Encourage her to focus on building a strong family foundation rather than seeking validation from others.

Lastly, prioritize your daughters' well-being. Make sure they feel secure and loved, regardless of the challenges you're facing. If necessary, seek support from trusted friends or family members to help you navigate this situation.

Remember that you deserve respect and support in your relationship. If things do not improve despite your efforts, you may need to consider your options moving forward for your happiness and the well-being of your children.

Ans: 01. Being a Senior Citizen, you may deposit this tax till the last date of filing of ITR (Most likely it would be 31st July, of the assessment year).
02. It would be better, if you deposit the tax earlier, after sale of Asset, so that interest payment is avoided.
03. You can save LTCG tax, by investing in Residential house property within time limits or by purchasing Capital Gain Bonds for this purpose.
Most welcome for any further clarifications. Thanks.

Ans: Normally not. If he does so, it would be an illegal act.
Most welcome for any further clarifications. Thanks.

Ans: It might have been a side effect of statin. Please get your lipid profile done and then discuss with a physician whether the benefit of Statin outweigh the side effects or not. You can also share your last lipid profile parameters with me here and which statin and what dose you are using those.

In your case, stopping statins and use of alternatives could be a better approach.
However, it has to be an informed decision after medical consultation.

Best,
Dr Chandrakant Lahariya
Centre for Health: The Specialty Practice
New Delhi

Ans: 1. Evaluating Capital Gains Tax on the Property Sale
Capital Gains Details: You sold your property for Rs 48 lakh, having initially purchased it for Rs 18 lakh. Since you held the property for more than two years, the profit qualifies as a long-term capital gain (LTCG).

Taxation on LTCG: The LTCG on property sales is taxed at 20% with indexation benefits. Another option is to pay 12.5% tax straight away without indexation. This tax may reduce if you opt for reinvestment options under Section 54 or Section 54EC of the Income Tax Act.

Section 54: If you reinvest in a new residential property within two years or construct one within three years, you could claim a tax exemption on the gains.

Section 54EC: If you don’t wish to reinvest in property, you can invest up to Rs 50 lakh in bonds issued by NHAI or REC, specifically designed for capital gains tax exemption. These bonds have a 5-year lock-in, and the interest is taxable.

2. Balanced Portfolio for Growth and Stability
Since you have a 5-6 year investment horizon, a balanced portfolio would be ideal to both grow and safeguard your funds. Consider a mix of the following investment categories:

Debt Mutual Funds for Stability and Safety
Stable Returns: Debt funds are less volatile than equity and offer relatively stable returns. They are suitable if you seek low-risk returns over a medium horizon.

Tax Efficiency: If held for more than three years, debt funds offer indexation benefits on LTCG, making them tax-efficient for medium-term goals.

Recommended Funds: Invest in short-to-medium duration debt funds to match your 5-6 year timeframe. Actively managed debt funds offer regular guidance from financial professionals, making them a better choice than direct investments.

Hybrid Funds for Balanced Growth
Hybrid Allocation: Hybrid funds blend equity and debt to provide moderate growth with stability, perfect for investors looking for balanced returns.

Risk Cushion: These funds protect you from market volatility with a mix of assets, ideal for 5-6 years of steady growth.

Tax Consideration: If held for over one year, equity-oriented hybrid funds benefit from LTCG tax treatment, which can be tax-efficient for your capital growth.

Actively Managed Equity Mutual Funds
Growth Potential: Even with a shorter timeframe, a limited allocation in equity mutual funds can provide enhanced returns. Actively managed funds, handled by expert fund managers, often outperform index funds, especially during market fluctuations.

Avoiding Direct Funds: Direct funds lack the insights a Certified Financial Planner (CFP) or Mutual Fund Distributor (MFD) offers. Regular plans offer guidance that can better align with your financial goals, helping you navigate market changes effectively.

Tax Structure: For equity funds, LTCG over Rs 1.25 lakh annually is taxed at 12.5%, which is lower than other asset classes, making it beneficial for growth.

3. Enhancing Liquidity with Debt Instruments
Having a portion of funds in fixed-return debt instruments ensures liquidity and regular income if needed. Here are a few options:

Fixed Deposits with Laddering: Spread deposits over multiple tenures, ensuring liquidity and minimising reinvestment risk due to fluctuating interest rates.

Corporate Bonds or NCDs: Consider bonds from reputed companies for fixed income, but focus on high-rated bonds for security. Although taxable, bonds provide consistent returns and can be an option for funds needed in a shorter span.

4. Emergency Fund Allocation
An emergency fund is vital at every age and is even more essential as retirement approaches. Secure at least 6-12 months of expenses in a liquid or ultra-short-term fund.

Liquid Funds: These provide quick access to cash if needed, with relatively lower risk and tax efficiency.

Bank Savings or Short FDs: For part of your emergency fund, keep funds in a high-yielding savings account or short-term fixed deposits.

5. Health and Retirement Provisions
As you are approaching retirement, securing adequate health and retirement funds is essential for a stable future.

Health Insurance: Ensure you have sufficient health insurance coverage, keeping in mind the rising medical expenses. You may also consider critical illness coverage to avoid out-of-pocket expenses.

Retirement Planning: Allocate a portion of your corpus in conservative, low-risk investments to provide consistent income post-retirement. Monthly Income Plans (MIPs) in mutual funds can supplement regular income if required, providing a balanced approach.

6. Potential Tax Liabilities and Strategic Planning
Here’s how to structure your investments while optimising tax efficiency:

Section 54 and 54EC: If you decide to reinvest under these sections, it can lower your capital gains tax liability. These are specific exemptions aimed at property sellers to reinvest gains in bonds or another house.

Indexation for Debt Funds: Holding debt funds for over three years qualifies for indexation, reducing your tax burden on long-term gains.

Regular Monitoring: A Certified Financial Planner can review your portfolio to adjust for tax efficiency, especially as new tax laws or changes affect mutual fund gains.

Final Insights
This is a solid time to capitalise on your property gains. With a mix of debt, equity, and hybrid mutual funds, you can achieve both stability and growth over the next 5-6 years.

Balanced Investment Strategy: A well-structured portfolio combining debt, hybrid, and limited equity mutual funds gives a balanced approach to growth and safety.

Tax Management: Maximising capital gains exemptions and using indexation benefits can help in optimising taxes on your gains.

Emergency and Health Planning: Set aside funds for medical and emergency needs, which is essential for financial peace.

By diversifying into the right instruments and with regular guidance, your Rs 48 lakh corpus can grow, while preserving your financial security over time.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner

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

Ans: Current Situation and Potential Tax Implications
Joint House Purchase: You purchased a new property in June 2023 jointly with four family members. It will be completed by December 2026, with a total cost of Rs 2.2 crore.

Loan and Payments: A home loan has funded Rs 1.1 crore, and payments continue towards the installments.

Old House Sale Delayed: Your plan to sell an old house by June/July 2024 has been delayed, but you expect it could be sold by December 2024 or January 2025.

The sale timing is critical, as it affects tax calculations and investment strategy.

Understanding Capital Gains Tax on the Old Property Sale
If you sell the old house in the next few months, consider these points:

Long-Term Capital Gains (LTCG): If you held the old property for more than two years, the gain qualifies for long-term capital gains tax. The LTCG rate is 20% with indexation benefits, helping reduce the taxable amount.

Section 54 Exemption: If you invest the capital gains from selling the old house into a new property (your under-construction home), you may be eligible for a Section 54 exemption. This reduces or eliminates the tax burden.

Time Limits for Exemption: Under Section 54, the new property must be purchased one year before or two years after the old property’s sale date. For under-construction properties, the new home must be completed within three years of the sale. Since your home is scheduled for completion by December 2026, it may fall within this time frame for exemption.

Steps for Managing Installment Payments and Tax Considerations
To efficiently manage your installment payments and minimise tax liabilities, here are some key strategies:

Use Sale Proceeds for Installments: Once you sell the old house, allocate the proceeds to pay off the remaining installments of your new home. This method supports your Section 54 exemption, as the capital gains directly fund the new property.

Utilise Capital Gains Account Scheme: If the old house sale happens before the new home’s completion in December 2026, consider a Capital Gains Account Scheme. This scheme holds your gains until you’re ready to pay the final installments, allowing you to maintain the tax exemption.

Avoid Tax Penalties: By reinvesting the capital gains directly or through a Capital Gains Account, you stay aligned with the tax-exempt limits. This approach prevents tax penalties on unutilised gains.

Loan Repayment Strategies and Their Benefits
With an existing home loan, you have options for managing debt effectively:

Partial Loan Prepayment: If selling the old house frees up significant funds, consider partially repaying the home loan. Reducing the loan principal lowers interest obligations and eases financial pressure.

Maintain Liquidity: If your income sources post-retirement are limited, focus on balancing loan repayment with cash reserves. Avoid exhausting all funds on prepayments, as liquidity will support unforeseen expenses.

Interest Deduction Benefits: Home loan interest qualifies for tax deductions up to Rs 2 lakh per annum. So, if tax-saving on other income is beneficial, maintaining the loan could serve dual purposes.

Planning for Additional Financial Needs
You may have specific financial goals or family obligations. These plans ensure financial security alongside the property investment.

Consider Your Age and Income Needs: At 68, it’s essential to preserve funds for retirement. Make sure your reserves meet monthly expenses comfortably.

Health and Emergency Reserves: Reserve a portion of the proceeds or capital for health and emergency funds. These ensure stability, especially if unforeseen expenses arise.

Future Property Maintenance: Anticipate expenses related to the new property after completion, including maintenance and repairs.

Investment Strategy Post-Sale
If the old property sale yields surplus funds beyond the installment payments, strategically investing this surplus can optimise your finances:

Allocate to Mutual Funds for Growth: Investing some amount in mutual funds, with guidance from a Certified Financial Planner, can grow your wealth with tax-efficient returns. Actively managed funds offer the potential for better gains than traditional deposits.

Explore Debt Funds for Stability: Debt funds provide relatively stable returns, which are also tax-efficient. These funds suit conservative investors who prefer less market volatility.

Avoid High-Risk Products: Given your age, high-risk investments (like equities) may not align with your risk tolerance. Focusing on balanced or debt-oriented funds can offer stability with some growth potential.

Ensuring Compliance with Taxation Rules
To maximise tax savings while remaining compliant, consider these best practices:

Work with a Certified Financial Planner (CFP): A CFP can help navigate the specific tax exemptions, handle instalment planning, and advise on re-investing sale proceeds effectively.

Documentation and Filing: Maintain detailed records of the new property payments, loan interest, and any transactions related to the sale proceeds. Accurate records support tax filing and Section 54 claims.

Plan Ahead for Final Payments: Since you still have 2-3 instalments due, ensure funds from the old property sale remain accessible. This keeps the payment process smooth and helps you avoid penalty charges or tax complications.

Final Insights
Selling the old property offers a structured approach to fund your new home. It also offers potential tax benefits when done with thoughtful planning.

Utilise Capital Gains Exemptions: Applying Section 54 can save significant taxes, especially as the new property aligns with your long-term plans.

Balance Loan Repayment with Liquidity: Repay loan portions wisely without sacrificing cash reserves. This balance supports both current needs and future obligations.

Explore Moderate Investments for Surplus Funds: Any surplus should be invested in tax-efficient, moderate-risk avenues that align with retirement security.

Best Regards,
K. Ramalingam, MBA, CFP

Chief Financial Planner

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

Ans: You are 43 years old with an SIP allocation in both large-cap and mid-cap funds. You have a total mutual fund corpus of Rs 16 lakhs and an additional Rs 1.5 lakh in debt instruments. Your passive income is Rs 30k per month and expenses are Rs 70k per month.

Passive Income and Expenses
Your passive income covers part of your monthly expenses. This is good but not sufficient for your monthly needs. You might need to draw from your investments to cover the gap.

Retirement Corpus Calculation
Retiring now requires careful planning. To sustain your lifestyle, you need to account for 70k monthly expenses.

Let's assume:

Your retirement age is 60

Life expectancy is 85

Monthly expenses remain the same

You will need a significant corpus to cover 25 years of expenses post-retirement.

Educational Corpus for Your Son
Your son is 14 years old, and college expenses will kick in within the next 4-5 years. Assuming a conservative approach:

Consider the cost of education, including tuition and other expenses

Account for inflation

Investment Strategy
Continuing Current SIPs
Parag Flexi Cap

Canara Large Cap

Quant Active

Axis Mid Cap

Motilal Midcap

ICICI Mid and Large Cap

Potential Changes
Evaluate the performance of your current funds. If they are consistently underperforming, consider switching to better-performing funds. However, ensure these align with your risk profile.

Diversification
Balance your portfolio with a mix of large, mid, and small caps

Consider international exposure for broader diversification

Debt Instruments
With Rs 1.5 lakh in debt instruments, ensure they align with your risk tolerance. Debt instruments provide stability but lower returns.

Tax Efficiency
Be mindful of the new mutual fund capital gains tax rules:

LTCG above Rs 1.25 lakh is taxed at 12.5%

STCG is taxed at 20%

Regular Reviews
Regularly review and rebalance your portfolio. This keeps your investments aligned with your goals and market conditions.

Insurance
Ensure you have adequate health and life insurance. This protects your family's financial future.

Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of expenses. This covers unforeseen situations.

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