Hii sir/mam, i have been suffering Anxiety problem. If some one said something i used to over thinking. Please help me how to cure my problem.

Ans: Hello Jitendra
You can expect core branches like Civil, Chemical, or lower-demand streams in NIT Uttarakhand or GFTIs during CSAB rounds.

Good luck.
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Radheshyam

Ans: Hello dear.
Your son has chances of getting branches like Chemical, Civil, or Metallurgy in mid-tier NITs, and may upgrade from SVNIT Chemical to a better branch or NIT in CSAB rounds. Keep a close eye on the counseling process.

Good luck.
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Radheshyam

Ans: Hello Shantanu
You have a chance in lower-tier Maharashtra colleges via CAP rounds; after CAP, target private or autonomous colleges like MIT-WPU, DY Patil, or VIT through non-CAP/institutional rounds.

Good luck.
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Radheshyam

Ans: Hello dear
You can target lower NITs (Puducherry, Meghalaya) for core branches, newer IIITs and GFTIs for ECE/IT, under Gujarat home state quota in CSAB.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: Hello dear
You can expect branches like CSE in lower NITs/IIITs, IT/ECE in mid-tier NITs, or core branches in good NITs during CSAB rounds.

Good luck.
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Radheshyam

Ans: Hello Jyoti
Preference order: (1) EEE @ Jalandhar (2) Electronics @ Calicut (3) VLSI @ Jalandhar. The final choice will be yours.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: Understanding Taxation on Fixed Deposit Interest

– Interest on fixed deposits is taxable under “Income from Other Sources.”
– Tax is not based on when interest is received.
– It is based on when the interest accrues.
– This is true even if the FD pays only at maturity.

? When Does Interest Accrue?

– Interest accrues every financial year, not just on maturity.
– Banks calculate interest every quarter or half-year.
– Even for reinvestment FDs, interest is earned yearly.
– The entire interest is paid at maturity, but accrues yearly.

? Taxation is Based on Accrual Method

– As per Income Tax Act, interest must be declared yearly.
– This is known as “accrual basis of taxation.”
– Ignoring this may result in tax demand and penalty later.

? Common Misunderstanding About Tax on FDs

– Many believe tax is due only when FD matures.
– This is incorrect under the Income Tax rules.
– This assumption may cause large tax outflow in maturity year.
– Also, it may attract interest and penalty from IT department.

? Your Obligation Each Year

– Every year you must estimate interest accrued.
– Add it to your total income while filing ITR.
– Pay tax as per your income slab on that amount.
– This is applicable even if the interest is not paid out.

? Where to Find Yearly Accrued Interest

– Ask your bank for yearly interest accrual certificate.
– Usually available in April each year.
– This helps in proper tax reporting in your return.

? Tax Deduction at Source (TDS) on FDs

– Banks deduct TDS if interest exceeds Rs. 40,000 per year.
– For senior citizens, this limit is Rs. 50,000.
– TDS is 10%, provided PAN is updated.
– If PAN is missing, TDS can be at 20%.
– TDS is not the final tax liability.
– You still need to calculate your slab tax.
– If you fall in higher tax slab, pay balance tax.
– If your slab is lower, claim refund of excess TDS.

? If You Ignore Annual Reporting

– Tax department can track FD accrual via Form 26AS.
– Interest is also shown in AIS (Annual Information Statement).
– If you don’t report interest, it raises red flags.
– In future scrutiny, you may face tax demand and penalty.

? Tax Planning Suggestions

– Ask bank for Form 16A or interest certificate every year.
– Add accrued interest to your income in your return.
– Pay self-assessment tax if needed before 31st July.
– This avoids last-minute surprise tax burden at maturity.
– Also avoids interest under section 234B and 234C.

? Impact on Overall Financial Planning

– FDs give assured returns but interest is fully taxable.
– This makes post-tax return low for many investors.
– Consider this tax aspect while comparing with other investments.
– For high income earners, debt mutual funds may be better.
– They offer indexation benefit and lower tax impact over time.

? Should You Break FD to Avoid Annual Tax?

– No need to break FD.
– Just declare interest every year properly.
– Even if maturity is far, show yearly interest accrual.
– Maturity proceeds will be tax-free if already declared yearly.

? Tax Filing and Documentation Tips

– Maintain record of FD opening date, amount and maturity date.
– Keep bank’s yearly interest certificate safely.
– While filing ITR, enter interest under “Income from Other Sources.”
– Match with AIS data to avoid mismatch.
– If mismatch found, explain with proof during ITR processing.

? What Happens on Maturity Year?

– In maturity year, you receive full interest and principal.
– But only declare the last year’s interest in ITR.
– Don’t report entire 6 years’ interest again.
– That would mean double taxation.
– Maturity amount already includes taxed portion.

? If You Missed Reporting in Earlier Years

– You can revise past returns for last 2 assessment years.
– File revised returns and pay tax with interest.
– Better to rectify voluntarily than face penalty later.

? Key Tax Rule to Remember

– Interest earned is taxable on accrual basis.
– Even if payment is made on maturity only.
– Pay tax each year, not just in maturity year.

? Ideal Tracking Practice

– Maintain Excel sheet for FD investments.
– Note FD amount, start and end date, and yearly interest.
– Add this value every year while filing your ITR.

? Benefit of Declaring Yearly Interest

– You avoid tax shock in final year.
– You avoid penalty, interest, and notice from IT department.
– You show income transparently.
– This helps in home loan, visa, and other financial proofs.

? Role of a Certified Financial Planner

– A CFP can help optimise tax-efficiency of your investments.
– Can help plan maturity of FD with other cashflows.
– Can suggest better options if tax is reducing returns.
– Regular reviews with a CFP help avoid such confusions.

? Disadvantages of Fixed Deposits

– Returns are low compared to inflation.
– Taxable every year.
– No indexation benefit.
– TDS cuts liquidity.
– Not suitable for long-term wealth creation.

? Alternative Options for Tax Efficiency

– Actively managed debt mutual funds offer better post-tax return.
– They allow better planning for income and withdrawals.
– Short-term and long-term capital gains can be staggered.
– Professional fund manager brings risk control.
– Certified Financial Planner and trusted MFD can help align these.

? Don’t Fall for Index Fund Hype

– Index funds offer low-cost but no flexibility.
– No scope of outperformance during market shifts.
– Poor downside protection in falling markets.
– Better to use actively managed funds guided by experts.
– This helps optimise portfolio across market cycles.

? Disadvantages of Direct Mutual Funds

– Direct plans need your own research and monitoring.
– No access to guidance from a certified mutual fund distributor.
– Most investors lack time or knowledge for this.
– Errors in fund selection or exit timing hurt returns.
– Regular plans via MFD give advice, handholding and long-term value.
– A CFP-aligned MFD ensures aligned goals, reviews and discipline.

? Don’t Rely on Endowment or Investment Policies

– If you hold LIC or Postal policies for investment, evaluate ROI.
– Most of them yield low post-tax returns.
– Consider surrender and reinvest into better options via SIPs.
– A Certified Financial Planner can help this switch efficiently.

? Final Insights

– Tax on FD interest must be paid every year, not just at maturity.
– Interest accrues yearly and is taxable even if not received.
– TDS doesn’t mean your full tax is paid.
– Declare interest each year in ITR.
– Collect interest certificate yearly for accurate tax filing.
– For better returns, explore tax-efficient debt mutual funds.
– Avoid direct funds and index funds without advice.
– Get professional support from CFP and trusted MFD.

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

Ans: Hello Himanshu
Prefer CSE @ VIT Bhopal if possible.

Good luck.
Follow me if you receive this reply.
Radheshyam

Ans: You have already taken thoughtful steps. Your goals are clear and well-prioritised. Now let’s do a complete 360-degree analysis.

Your profile shows that you are sincere and serious. Let us create a clear path forward.

? Income, Salary and Monthly Commitments

– Your net salary is Rs. 47,000 per month.
– NPS contribution of Rs. 5,000 is already deducted from salary.
– Loan EMI is Rs. 10,500 per month till June 2027.
– Monthly living expenses are between Rs. 25,000 and Rs. 30,000.
– LIC premium is Rs. 5,000 monthly.
– You have limited room for investment surplus right now.
– But this will improve after June 2027.

? Analysis of NPS Account

– NPS balance is Rs. 4 lakh as of now.
– You are contributing Rs. 5,000 monthly.
– That will continue till retirement in 2044.
– NPS is a disciplined and tax-efficient tool for retirement.
– Let it grow without any withdrawals.
– Avoid reducing the NPS contribution in future.
– After retirement, only 60% of the corpus will be tax-free.
– Remaining 40% may require annuity or structured withdrawal.
– NPS alone may not be enough for full retirement need.

? LIC Policy Assessment

– You pay Rs. 5,000 monthly till 2039.
– Policy offers Rs. 21 lakh maturity with Rs. 10 lakh death benefit.
– LIC is a mix of insurance and low-return savings.
– Estimated return is likely around 4% to 5% per year.
– You may consider surrendering this plan.
– Reinvest this into long-term mutual funds.
– Mutual funds offer higher returns and better flexibility.
– Insurance should always be separate from investments.
– Use term insurance for risk coverage.
– Use mutual funds for wealth creation.

? Review of PPF Account

– You are contributing a small amount irregularly.
– Current balance is Rs. 1.7 lakh.
– Maturity is due in 2033.
– PPF is safe and tax-free.
– But it offers modest returns of 7–7.5%.
– Use this only as part of your debt portion.
– Avoid treating it as your main growth engine.
– Increase contribution slightly if possible.
– But don’t overdepend on it for goals like education or retirement.

? Current Debt Structure and EMI Analysis

– EMI of Rs. 10,500 will end in June 2027.
– That’s about 25% of your current investable surplus.
– Once cleared, you will have higher monthly savings.
– Do not take another loan immediately after this one ends.
– Use that EMI amount for goal-based SIPs.
– Avoid using loan for buying car or land.
– Try to stay debt-free after 2027.
– That will help you build wealth faster.

? Insurance Planning Review

– LIC is not term insurance.
– You did not mention any pure term plan.
– Please buy one immediately with Rs. 50 lakh to Rs. 1 crore cover.
– It is low-cost and essential to protect your family.
– If anything happens to you, your son’s future is at risk.
– Term insurance is the best way to secure his education and upbringing.
– Review and ensure nominee names are correctly added.

? Goal 1: Your Son’s Education Planning

– Your son is 6 years old now.
– Engineering or medical education costs can be high.
– It may require Rs. 25–30 lakh or more in total.
– You have 10–12 years to plan this goal.
– Start a separate SIP dedicated only for this purpose.
– Choose diversified mutual funds with active management.
– Avoid direct or index funds.
– Direct funds lack expert guidance and periodic review.
– Index funds only copy market and offer no protection.
– Instead, regular mutual funds through a Certified Financial Planner are better.
– You will get yearly reviews and strategy adjustments.
– Increase SIP once your loan EMI ends in 2027.
– If possible, start with Rs. 3,000–5,000 monthly from now.
– Even this small start will grow with time.

? Goal 2: Buying a Car

– A car is a depreciating asset.
– It should never be bought with long-term loans.
– Try to buy a car with savings only.
– Delay the purchase till after 2027.
– You can set up a 3-year recurring deposit or short-term SIP.
– Use balanced or hybrid mutual funds for this goal.
– Do not disturb your son’s education corpus for car buying.
– Keep car budget simple and realistic.
– Avoid costly models with high EMI burden.
– Remember, a car is a comfort, not a goal.

? Goal 3: Buying a Piece of Land

– Real estate for living is a lifestyle choice.
– But do not treat it as an investment.
– Real estate lacks liquidity and transparency.
– Also, it brings added costs like stamp duty and maintenance.
– If you must buy land, do it only after key goals are covered.
– Never delay your child’s education or retirement for this.
– Avoid taking a big home loan again.
– If you still wish to buy land, start a separate SIP now.
– Use equity mutual funds with 8+ years horizon.
– Do not compromise your other long-term financial goals for land.

? Emergency Fund Planning

– You didn’t mention any emergency corpus.
– This is very important for salaried families.
– You need at least Rs. 1.5–2 lakh in liquid funds.
– Build this over the next 6–8 months.
– Use liquid or ultra-short mutual funds for this.
– Don’t keep money idle in savings bank account.
– This money is for medical, job loss, or family emergencies.

? Long-Term Retirement Strategy

– You retire in 2044, which gives 19 years.
– NPS will continue to grow till then.
– But NPS alone is not enough.
– Start a separate retirement-focused SIP now.
– Choose long-term equity mutual funds with active fund managers.
– Direct or index funds don’t give such customisation.
– Regular mutual funds via CFP-led guidance bring structure.
– Post 2027, increase retirement SIPs aggressively.
– Build two retirement sources – NPS and mutual funds.
– This dual structure gives tax and liquidity balance.
– Avoid any plans that mix insurance with retirement.

? Suggested Cash Flow Plan From Now

– Monthly net income is Rs. 47,000.
– EMI is Rs. 10,500 till 2027.
– LIC premium is Rs. 5,000.
– Expenses are Rs. 30,000 at max.
– That leaves very limited room today.
– Still, try SIP of Rs. 2,000–3,000 for your son’s goal.
– Also set aside Rs. 1,000 in liquid fund as emergency base.
– After EMI ends in 2027, divert that full amount to SIPs.
– Split that into retirement, car, and home planning SIPs.
– Don’t increase lifestyle expenses after loan closure.
– Instead, increase savings commitment.

? Maintain Financial Discipline

– Avoid borrowing for car, travel, or celebrations.
– Track all your expenses monthly using an app or diary.
– Update nominee details in all your accounts.
– Review all your investments every 6 months.
– Set financial reminders for SIP dates and insurance renewals.
– Don’t stop SIPs even if market goes down.
– Stay invested for long-term compounding.

? Benefits of Active Mutual Funds Over Index and Direct Funds

– Index funds copy market and offer no active strategy.
– They can fall badly when markets crash.
– They don’t help in risk reduction.
– Direct mutual funds are also risky for non-experts.
– They give no guidance, no regular review, and no help during crisis.
– Regular mutual funds through a Certified Financial Planner are better.
– You get yearly check-ups, goal mapping, and corrections.
– A planner keeps your emotions under control.
– That helps build long-term wealth safely.

? Finally

– You have good habits and clear goals.
– But some product choices need correction.
– Surrender the LIC and replace it with term insurance.
– Build your son’s education fund with SIP.
– Create a car fund only with savings.
– Don’t rush into land purchase.
– Build emergency fund and retirement fund gradually.
– After 2027, your cash flow will improve.
– Use that to increase SIPs and reach your goals easily.

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