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Got a Question? Just ask…! If you would like to ask any queries on personal finance topics, kindly visit our newly launched Questions & Answers Forum. Kindly click here to Ask your Questions.. Cheers! – Sreekanth

(The comments section on this page and on Articles which are more than one year old, has been disabled. Visit our new Forum section to ask your question. The main features of the Forum are ; you can have a dedicated Forum login ID, can track the status of your queries, you can view questions based on the interested category & you also can reply to the questions posted by other blog readers . So, kindly post your queries / replies at relakhs.com/forum.)

  • Dear Mr Shreekanth,
    Good Day,
    I am a 50 year old man. Below are my investment details and i want to continue investing for another eight to ten year.

    Insurance policies for Rajendra Patil
    PLAN NAME DOC SA PREMIUM MTY DATE
    NEW MONEY BACK 01/03/92 25,000 1320 YLY 03/17
    JEEVAN SARAL 28/12/11 15,00,000 18,375 QTY 12/13
    JEEVAN ASTHA 21/01/09 1,50,000 25,425 ONE TIME 01/19
    JEEVAN ANAND 05/06/02 1,00,000 7682 YLY 06/18
    JEEVAN MITRA TRIPLE 05/06/02 50,000 3018 YLY 06/24

    then i have following MF investments
    SIP
    FUND NAME SIP AMT ACCUMULATED TILL DATE
    1) AXIS LONG TERM EQUITY -G 2000 1.05,000
    2) BIRLA SUN LIFE FRONT LINE EQUITY – G 1500 43,000
    3) BNP PARIBAS LONG TERM EQUITY – G 2000 63,000
    4) HDFC BALANCED FUND -G 3000 1,15,000
    5) HDFC TOP 200 – G 3000 1,04,000
    6) ICICI PRU.VALUE DISCOVERY -G 2000 58,000
    7) IDFC PREMIUM EQUITY – G 3000 1,22,000
    8) RELIANCE BANKING -G 3000 3,90,000

    ONE TIME INVESTMENT IN MF
    1) HDFC CMF SAVING PALN -G – 2,60,000
    2) HDFC CMF TRESURY ADVAT -G – 2,00,000
    3) HDFC PRDUENCE -G -1,00,000
    4) ICICI PRU.BALANCED ADV -G -1,00,000
    5) RELIANCE GOLD SAVING FUND-G – 1,40,000 THIS WAS A SIP 3000/MONTH STOPPED LAST MONTH

    Also i have a LIC policy Jeevan saral ditto same as mentioned above in the name of my wife age-41 years

    I would like have your advise on the LIC investments also if you can let me know if my MF investments are ok
    or you suggest some changes as well.
    Awaiting your reply.
    Best regards,
    Rajendra Patil

  • Hi Shreekanth ,
    I want to buy health insurance floater policy for myself and my wife. Should i buy a policy directly from the company’s website or should i buy from some health insurance comparison websites like coverfox , medimanage etc. Some of these also offer after sales service like during claim settlement etc. What is your opinion ?

  • Hi Sreekanth,

    My father (retired govt employee) has got lumpsum amt of 2.5lacs from chit & willing to save this amt in FD for period of 1yr approx.

    I’m suggesting for mutual fund (which I started SIP horizon of 10 yrs last month & happy with current performance, credit goes to U). Could you please suggest MF for lumpsum investments for period of 1yr & also confirm if this has to split.

    Thank you.
    Srikanth

  • Hi Sreekanth,

    I am 54 years old and have Rs. 18 lakhs that I like to invest in MFs (my shortlist is provided below). My investment period will be 3 years from now and I can remain invested upto 5 years (additional investments will be made depending on spare funds). The purpose of this to build a retirement corpus from which I can make systematic withdrawals of about 50k monthly (?) from 2022 onwards.
    MF Scheme Name Category SIP x 12 x 3 Lump Sum
    Axis Long Term Equity Fund (G) ELSS 10,000 360,000
    HDFC Balance Fund (G) Balanced 10,000 360,000
    Birla Sunlife MIP Wealth 25 (G) MIP Aggressive 10,000 360,000
    DSP Black Rock Micro Cap (G) Small & Mid Cap 10,000 360,000
    ICICI Prudential Value Discovery (G) Diversified Equity 10,000 360,000
    1,800,000 1,800,000
    Kindly advise if the above selection of MF Scheme & investment pattern is okay or suggest something better if possible.

    Regards

    • Dear Gupta,
      The existing provision contained in sub-section (1) of section 220 provides that any amount specified as payable in a notice of demand under section 156 shall be paid within thirty days of the service of notice at the place and to the person mentioned in the notice.
      Sub-section (2) states that if the amount specified in the notice is not paid within the period, the assessee shall be liable to pay simple interest at one per cent for every month.
      If you have any outstanding tax dues, suggest you to clear them at the earliest (if you agree to the IT dept computation).

      Read: How to pay outstanding taxes?

  • Hi shreekanth
    My name is ranjeet,age 29.non smoker.
    I am planning to purchase online pure term plan of pnbmetlife For sum assured 1 cr.
    I checked on policy Bazar and found premium is comparatively low than others online term plan.
    Kindly suggest pnbmetlife online term plan is good.As in your site I couldn’t find any comments or post regarding pnbmetlife online term plan.
    Awaiting ur reply.
    Thanks
    ranjeet

  • I would like to know if i want to take policy for my daughter (9 years completed) for her future, which policy is the best for her? also for us we want pension policy. now my age is 45 years.

  • I have recieved 79000 Rs as arrears against salary this year,can u please tell me after calculation of 89 (1) I am getting a rebate of 2067 RS, I only have a doubt that do I need to show the total arrears in my this years gross salary for calculation of income tax

  • Hi Sreekanth;
    You are doing an awesome job by counseling amateur investors like me thru your blogs. Only after reading your blogs and after getting clarity on what Mutual Fund is all about , I have started investing in Mutual Funds. In this month only I have invested in three mutual funds and all of them are direct plans.
    Following are the mutual funds I am investing in. Pls review and let me know if I have to add / remove either of them OR I have to relook into the fund wise investment amount:-

    1. ICICI Value discovery Fund Growth option (Diversified Equity)- Rs. 10,000/- per month.
    2. Axis Long term Equity plan Growth Option (ELSS )- Rs. 10,000/- per month
    3. SBI Pharma Fund Growth option (Sector fund) – Rs. 20,000/- per month.

    Following are my personal details:-
    1. I am the only earner in my family. 2. My take away Monthly salary is 90,000/-. 3. I am 32 years old. 4. I have taken term insurance plan from HDFC with death benefit of Rs. One crore. 5. Me and My family is covered with health insurance cover of Rs. 8 lakhs per annum and I have also taken medical insurance for my parents with a cover of Rs. 4 lakhs per annum. 6. I live in Bangalore in a rented house and I have not yet decided to buy the house for accommodation.

    • Dear Swikar,
      Thank you for your appreciation and kind words.

      You are investing relatively higher amount in a sector fund (pharma), may I know the reason for this selection? Also, may I know your investment horizon (timeframe)??
      All the three funds are good ones.

      • Dear Sreekanth;
        Thanks for the response. As of now I am not looking for the investment in real estate hence I am investing all the money I am able to save per month in Mutual Funds. Reason for investing higher amount in Pharma fund is the fund performance in last 3-5 years. The CAGR return is more than 20% and it is one of the top performing fund across sectors, fund categories.
        My investment horizon is minimum 5 years depending on how the Fund Performs.

        Pls enlighten me further on my investment portfolio.

          • Thanks Sreekanth for the input.
            One last question, do you recommend me to add Balanced fund (HDFC/TATA Capital) to my investment portfolio by reducing investment amount of Pharma Fund? If you suggest, I will reduce 5k per month from Pharma Fund and invest the same amount in Balanced Fund.

            • Dear Swikar,
              You may consider a balanced fund as you are looking at 5 years time-horizon.
              In case if your horizon is more than that you may consider HDFC Mid-cap opportunities fund / Franklin Smaller companies fund.

              (You may kindly post your further queries @ relakhs.com/forum )

  • Dear Srikanth
    Can I take exemption for amount gifted to my daughter (major). If yes then how.
    Vijay kumar reddy.

  • Dear Sreekanth,

    Greetings.

    I am still waiting for your response to my earlier posted comments. Meanwhile, related to the same, I am providing below the shortlist of MFs that I would like to invest in. My investment duration is from 1 year to a maximum of 5 years:

    Birla Sunlife Cash Plus (Lumpsum) 1,000,000 For 1 year
    Birla Sunlife MIP II Wealth 25 (Per month) 25,000 Upto 3 years
    Reliance MIP (Per month) 12,500 Upto 3 years
    HDFC Balanced (per month) 12,500 Upto 5 years
    Franklin India Smaller Companies Fund (per month) 50,000 Upto 5 years
    UTI Mid-Cap Fund (per month) 50,000 Upto 5 years

    Please advise if the selection of MFs is good or suggest alternatives that will be better than my selection.

    Please respond to this as well as my earlier posted comments.

    Best regards

  • Dear Sir,
    Please throw some light on “Term Insurance” Policies.
    Concept-suitability-etc.,

    S.Sasikumar- 42Yrs.

  • Sir,
    I am Sasikumar.S. aged 42.
    As per your advice, I did portfolio overlap analysis with FUNTOO tool.
    Based on it,
    $ HDFC equity have 30% and 35% Portfolio OL with ICICI Value discovery and Franklin HG fund respectively.
    $ Franklin HGCF and ICICI Value fund have 22% FOL
    $ Remaining funds portfolio over lap % is around 10%.
    If I need to trim off any fund/ increase SIP amount in any fund,
    Pl offer your expert comment and suggestions for having a strong funds for my retirement life.
    ==================================================================
    I am running SIP in the following funds from 2014 with an aim to continue for next 15 yrs for building my retirement corpus.
    HDFC Equity – Rs 1500/-
    HDFC Mid cap opportunity fund – Rs 3000/-
    Franklin High growth companies fund – Rs 1500/-
    ICICI Value discovery fund – Rs 1500/-
    Birla MNC fund – Rs 1500/-
    SBI Pharma fund – Rs 1500/-

    Total SIP investment per month is Rs 10500/-

    I request your valuable reply about my portfolio/ alternate fund suggestions to ensure my safe retirement life.

  • Dear Sir ,
    I am a 38 year old and my wife is 33 yrs old housewife.My mother who is 74 years old stays with me. I have already bought a 50 lakh life cover of HDFC Click to Protect Plus and a personal accident policy of Bajaj Allianz Health Guard of 10 lakhs. Now i wish to purchase a health insurance policy for my family. I have done some research from various portals and zeroed in on Star Health Family Optima Plan for myself and my wife.The only factor i am a bit doubt ful is that it has a room rent capping of Rs 7500. We stay in Kolkata.Is this room rent capping sufficient.What do you think about my choice ? Is there any better option ? What policy to take for my mother ?She does not have any health problems as of now .

  • Dear Sreekanth,

    Thank you for your great effort to improve Financial literacy for public. I have taken a LIC Jeevan anurag policy in 2007 and till now 9 premiums paid.It is for 20 Year term and Rs 27,536 is premium and Sum assured is 5,00,000.Recently i have gone through your articles about not to involve in these kind of Money back policies and I have calculated all possibilities as below.

    1. Surrender Value if I do it now is Rs.1,82,000
    2. Paid-up Value is Rs.4,25,000 ( To be paid in 2027)

    Now I have decided to surrender and to get Rs.1,82,000 to invest in Equity High risk fund which can return 24% CAGR till 2027( for rest of 11 Years) , which will give around Rs.19.40,000.
    The reason to mentioned 24% is that I have crosschecked through Valueresearchonline, which provided topmost equity funds returns since their inception.

    Kindly advise whether my decision is correct or any other steps to be taken.

    With Best Regards,

    Lakshmi Narayana.

    • Dear Lakshmi,
      Expecting 24% can be abnormal but if it is achieve then well and good, suggest you to have reasonable expectation like say 12 to 15% from your portfolio and then re-work on your calculations.
      But your decision to discontinue the unwanted life insurance policy is correct. Do you have sufficient life cover? Any existing life insurance plans other than this one?
      Read: Best Term insurance plans.

      • Thank you Mr.Sreekanth. I do not have any life cover policy and now I am planning to take for Rs. One crore policy from HDFC Life Click2ProtectPlus.My age is now 38 Years and planning to take for 20 Year term.Could you please suggest the best among those 4 plan options in HFDC Life Click2ProtectPlus.

        Mr.Srikanth , when I have searched in Valueresearchonline portal for Top 10 Equity performance since their launch around 10 to 15 Year period, the return column showing almost 25 to 30 %. Is this return is CAGR or absolute? Please help me to analyzing about this whether I am interpreting correctly or not.

        With Best Regards,

        Lakshmi Narayana.

          • Dear Sreekanth,

            Thank you for kind reply.Now I am happy that you passed my understandings.Actually the reason behind is that I would like to invest Lump sum Rs.20,00,000 now and I am in dilemma whether to invest in buying a plot or to invest in Equities for a longer period min 10 Years.

            Your valuable suggestion is highly appreciable.

            Best Regards,

            Lakshmi Narayana.

            • Dear Lakshmi..To be frank it is very tough to compare Land Vs MF investments and provide you the advice. We need to look at other aspects of your profile too. Suggest you to take help of a Fee only financial planner (as you are looking at investing a hug sum of money).

  • Hi sir, I would like to invest an amount of 1 Lakh in mutual funds for long term of 20 years. It is basically for my child education. suggest me suitabe mutual funds to invest. Thank you…

  • Dear Srikanth,

    I need a suggestion from u. I gave 2 lakhs to my relative. He is asking me to purchase his agricultural land worth 10 lakhs by paying balance 8 lakhs to him. He will earn 1 to 1.2 lakhs per year from this land after 2 years (because mango plantations crop will come after 2 years).
    I am working in UAE since Dec 2013. Whether is it advisable to purchase agricultural land by investing another 8 lakhs. My intention is just leave 2 lakhs (Whether it come back or not), invest 8 lakhs into best mutual funds so that I can earn more compare to agricultural land income.
    Pl. advice.
    Thanks,
    Harinath

    • Dear harinath,
      Kindly note that there can be ‘state’ specific Terms & conditions to purchase agriculture land. So, suggest you to kindly first go through them.
      The returns (income) from agri land can’t be compared with a financial security like Mutual fund.
      May I know your investment horizon if you decide to invest in Equity mutual funds?

      • Dear Srikanth,

        Thank you for your prompt Reply. Agricultural land is near Anantapur , Andhrapradesh. My father is having agricultural land long back. I am planning to purchase this land to get back my 2 lakhs which I gave to my relative. Again I have to invest 8 lakhs to own the land.

        My investment horizon for MF is 10 years. Already I am having MF investments (followed your best MF 2015). Now I am thinking to diversify my asset allocation i.e. MF, Fixed assets like agricultural land. Also I am having Hosing [email protected]%pa interest (2 years loan payment completed. 8 Years payment balance. EMI is 35000/- ).

        Pl. advice me whether I have to invest 8 lakhs in the following equally
        1. I have to pay Housing loan prepayment – 4 lakhs or Total 8 laksh
        2. MF investment – 4 lakhs or Total 8 Lakhs
        or
        Shall I purchase Agricultural land.
        It is not a comparison between different assets, but If I get more returns in MF it is better to invest in them.
        Thanks in advance for your co-operation.
        Regards,
        Harinath

    • Dear Srikanth,

      Thank you for your prompt reply. The agricultural land is in Anantapur District , Andhara Pradesh. My father is having agricultural land. My time horizon for MF is 10 years. Also I am having a home loan with EMI 35000/- for 8 years. Already 2 years home loan repayment completed.

      Could you suggest me best option among the following or You can suggest me a new plan
      1. Shall I invest 4 lakhs in MF & 4 lakhs for home loan repayment
      2. Shall I invest 8 lakhs completely in MF. I am having some investments in MF (best MF for 2015 suggested by you). Because I may get decent returns without any extra work)
      3. Shall I purchase agricultural land by investing 8 lakhs (It costs 10 lakhs – already I gave 2 lakhs to him as a hand loan, he is insisting me to purchase land. I am thinking If I purchase this I will get back my 2 lakhs also). Though I am not particular / not interested about purchasing agricultural land.

      Thanks,
      Harinath

      • Dear harinath,
        If you are not interested in buying Agri land then suggest you not to go ahead with that decision.
        If your time-horizon is >10 years, kindly consider investing in Equity mutual funds.
        Do share details about your existing MF portfolio. Have you allocated sufficient savings towards your other high priority goals (ex:retirement goal), if not, you may continue with your Home loan EMIs and invest in mutual funds instead of part-paying your home loan amount.

        • Thank you Srikanth. I will invest total in MF.

          At present I am having investments in FT Smaller Companies Fund, FT Prima Plus, ICICI Value Discovery Fund. Not a regular sip. When I have amount I used to purchase. Total around 8 L investments in above funds as of now. I am having ICICI Direct 3 in 1 account. All investments are in that only. Charges of ICICI Direct are more. Do you suggest me to go for direct investments in above funds using MF Utility.

          I Have Term plan, Health Insurance. I want to invest my savings into MFs only. Shall I continue above funds (also started SIP) investing for 10 or more years. I have 5 goals
          1. Child 1 education after 6 years – Engineering or CA costs 10 Lakhs
          2. Child 1 Marriage after 13 years costs 15 L
          3. Child 2 education after 15 years – Costs Approx. 20 L
          4. Child 2 Marriage after 20 years – Approx. 20 L
          5. My retirement after 18 years – Need corpus approx. 50 L.

          Except Child 1 education all other goals are long term (>10 years). Shall I continue with above funds (with a sip of 10000 in each fund for next 10 to 15 years) . Do you want me to add one MID Cap – HDFC Mid cap fund. For child 1 education I have to plan FD of 2 to 3 lakhs in 1 or 2 years which I can adjust from my savings.

          As of now I need to make 1 crore corpus in between 13 years to 20 years from now to meet above goals.

          Could you please suggest me on above goals & plans.
          Thanks in advance for your kind suggestion.

          Regards,
          harinath

  • Dear Sreekanth.,

    Really u r helping all of people.,

    Thanks for all your service., now really i am able to find out all my mistakes. Presently in the process of implementing all your suggestion;

    As a part of that , i am in the process of acquiring HDFC Life’s Click2 Protect Plus term plan for 20 yrs ( my age is 36)for 50lakhs

    1.Is this policy covers natural death and death due to accidents
    2.Is that sufficient to take for 20 yrs term

    regards

    krishna

    • Dear Krishna,
      1 – Yes.
      2 – Depends on your expected retirement age & till the time you expect that you would have financial liabilities (if any) / fin commitments.

  • For AY 2017-18, am I eligible to give 15G and if so, what to write in col.16,17,18 for MOD/SWEEP A/C Interests, given the following conditions for AY 2016-17 :
    income from sal.-280449
    income from other sources-57098
    net total income-243890
    assuming that for AY 2017-18 those amounts will be 304392, 60000, 248000 and interest mod/sweep a/c be 20000.
    Kind urgent reply is solicited for.

  • Hi Sreekanth, I bought two plots in 2006 and from which one of them we sold in Dec2014 and the other one we sold in Feb2016. After indexation the capital gain tax is 21 lakh including both.
    Meanwhile in May 2015 i have done an agreement for a under construction flat for 40lakh.

    Need your help to understand if i can save capital gain tax arising from plots, by clubbing both the gains and buying one under construction flat.

    Thanks in advance, will appreciate your kind help.

  • I keep following you blog and post from last couple of months. i am 32 yrs of age:

    Below are my investments and request you to review:
    1. Axis Long term equity – ELSS – SIP 2500 Rs from Oct 2015 (20 yrs)
    2. UTI Mid cap fund – SIP 2000 Rs from Dec 2015 (15 yrs)

    New funds I have selected for my Son (1 year old) future (12-15 yrs):
    3. ICICI pru value discovery – want to start SIP 1500 Rs
    4. Tata Balanced Fund – want to start SIP 1500 Rs

    Queries:

    A. Should I continue to UTI mid cap. Do you see any issue with this fund.
    B. 1 and 3 are multi cap funds. Fund overlap <12%. Selection of ICICI valure discovery is appropriate or not.
    c. Larger cap fund do I need to consider intead of 3.
    D. In balanced fund I am little confused between Tata and HDFC. If you suggest both are okey then I will go for Tata.

    Request you to review queries.

    • Dear Mukul,
      A – As of now be with UTI mid-cap, the fund manager has changed but let’s track its performance for atleast 12 months from now. Personally, I too have investments in this fund.
      B – That’s ok.
      C – Its a good fund.
      D – TATA fund is a bit aggressive one. But considering your investment horizon, investing in this fund makes more sense.

      You may consider including a Small cap fund like Franklin Smaller cos fund or DSP micro cap fund for >15 year goals. But do check out for overlap and then take a decision.

  • Dear Mr Shreekanth,
    Can I know about the interest rate of PPF account which is decreasing if we observe the past history of interest rates of PPF account from 12% in way back 1986 to present 2016 it’s 8.1% if I am not wrong.

    I am 26years presently with annual income 4.5lakhs per annum planning to start the PPF account,but I am feeling a bit risk which lands me after 15years maturity period to present LIC endowemnet plans interest rates of interest if we compare endorsements vs PPF account presently.

    • Dear Raghuraj,
      Kindly do not mix insurance with investment.
      I believe that if one has investment horizon of say 15 years, he/she has to invest in equity oriented securities to get decent real rate of return.
      I also believe that the govt is providing a level playing field for all the parties involved in the financial markets, hence they have linked the debt instruments to the markets. Let the markets decide the interest rates. We as an investor have to invest in all possible asset classes based on our financial goals.

  • Sir,
    I am Sasikumar.S. aged 42.
    I am running SIP in the following funds from 2014 with an aim to continue for next 15 yrs for building my retirement corpus.
    HDFC Equity – Rs 1500/-
    HDFC Mid cap opportunity fund – Rs 3000/-
    Franklin High growth companies fund – Rs 1500/-
    ICICI Value discovery fund – Rs 1500/-
    Birla MNC fund – Rs 1500/-
    SBI Pharma fund – Rs 1500/-

    Total SIP investment per month is Rs 10500/-

    I request your valuable reply about my portfolio/ alternate fund suggestions to ensure my safe retirement life.

    Expecting your reply Sir.

    Thanks &Regards
    S.Sasikumar.

  • Dear Sreekanth.,

    Thanks from me for all your earlier advices to me.,

    1. In our earlier discussions you advises me to make paid up all my endowment plans; I have registered my policies on LIC portal. My premium comes due on April 2015. If i skip all my up coming premiums whether it will reduced paid up automatically. Will i be subject to any penalty; Because my agent always convince me to continue the policy;

    2. I have taken ” max life income advantage plan” -Money back for annual premium of 50,000 for 12 years and they will return annually 72000 for next 10 years at the end i will get maturity bonus of 5,75000. Presently i have paid First year premium.

    Kindly advice my above concern.

    Regards

    Krishna

  • Hi,
    My age is 38, My annual salary is 2.5 lakhs, from two years i am saving in ppf 1st yaer 30k and second year 40 k,i want to invest in mutual funds for my retirement (as working with a small private farm i won’t get any pension). i want to do sip of 3000 per month,and a lum sum of 2 lakhs is been invested as fd ‘s they will meture this month sol giv some suggession how to reinvest them as bank fd rates are gone down.
    Thank you.
    klv

  • Dear sreekanth
    Presently I’m working as a consultant witha firm and my parents Is 15lk the same company is offering on roll for the same package. Presently the only deduction is the of 10 %, can u please guide me what could be the standard income tax deduction with below scenario.
    Savings including insurance – 15000
    Home loan interest paid in past to be claim – around 20 lk
    Home used for own use.
    Kid school fee around 24 k

    Also please guide me about tax savings
    Appreciate your help in advance

  • Need Help
    I have a flat in apartment complex in Bellandur and earlier in 2005, all of the apartment owners received B Khata, at the time the reason was it came under Bellandur Panjayat.

    Around 2010, all of my neighboring flat owners converted to A khata, at that time i couldn’t and this got delayed until now.

    How can i get a A khata now. I have paid tax receipts until last year, My Apartment complex has Occupancy Certificate, All Land documents – Sale Deed, Conversion Order, Encumbrance certificate etc.

    Need your help to understand how i can get the khata issued.

  • Hello Mr. Shreekanth,
    I have gone through many of your articles, its all worth reading and implementing.

    Presently, I am 26 years of age having annual income of 4.5lakhs Rs.
    I want to take up life term of ICICI prudential smart life along with LIC’s health insurance of myself and my wife,is it worth to take? I presently do not hold any of the other source of income/savings or funds.

    I first made my decision to go for LIC’S Jeevan anand policy for myself of 5.0lakhs rupees, should i buy it? or ICICI term plan would be fine for me now?.

    Further i am also planning to invest in SBI Bluechip or SBI Pharma mutual fund and UTI Midcap Fund with annually 30,000 investing in both the funds. Does these funds are good for decent return and tax saving if i start it for 2-3 years from now?

    I will truly value your observations for the same.

  • Dear Sir,

    I am planning for 3 year investment with decent return , kindly suggest the best possible option with tax benefit.

    planning in invest 50k

    Regards,
    Praveen Rana

  • Sir
    I have lic jeevan anand having premium 48500 yrly(3yrs complete d),
    Deposited 5500 ppf,
    Invested 25000 Axis lte and 25000 bnp paribas equity.
    Now help invest remaining AMT for tax saving.

  • Hi ! I am 28 yrs old living with my parents. We have got 60-65 lakhs corpus on selling a property. Right now, no one is working, no house, no insurance nothing except the corpus amount. I have plans of buying a 2 bhk apartment (15-18lakhs,furnished) and my wedding (4-5lakhs) only after 1-2 years. I am now ready to invest 55 lakhs at the moment. Kindly suggest me to invest the money such that I can get monthly income of 25-30k regularly and some schemes for future. Detail me with an example placing u in my place and keep the numbers intact and suggest an excellent portfolio. Thanks a ton !!!

  • Hi Srikanth,
    Please advise if any Insuarnce company issues a Term insuarance plan on a housewife spouse(who used to work 6 years ago) , (now non earning, non taxpayer, no IT returns filed).
    Is , being an earning member a criteria for Term insurance?…pls advise

  • Hi

    Sir, as my friend’s PAN number has been entered wrongly and after 2 years the company is telling that they have sent for rectification for income tax dept. how many days it will take after sending the request for rectification and how we can make out that it has been corrected and can she get back her TDS ?

    Regards,
    Parveen

  • hello sir,

    i want to invest 45ooo/= in elss,

    my basic purpose is tax saving and steady growth.

    i am looking this investment for next 3=4 years

    can u suggest me which funds are the best to invest now looking at the market conditions

    Kindly reply asap as i am looking to invest before 31 march

  • Hi Sreekanth.,

    I started following all your article, its all useful and interesting; I clarified many of my doubts;

    Similar to above questions, mine is also related to LIC endowment policy; All the policy were taken by me during my initial stage of my career. I agree than i did not do much analysis; Now i could see there are other ways of financial planning to get a decent return more than offered by this traditional plans.

    Presently I have these plans with me;

    Jeevan Anand ( T.No 149) commencement date 28/10/2009 ; Taken 4 policies with term of yrs 21/20/19/18 all being SA for Rs 125,000; Qtr. pay being Rs 1,734/ Rs 1,836/ Rs 1,948/ Rs 2,073 ( premium mentioned for Qtr only) Accrued bonus each policy approx. Rs.33000(per policy)

    Jeevan Chhaya (T.103) commencement date 28/10/2009; Policy taken for 25 yrs ,SA 400,000,Qtr payments Rs 4,520 (premium mentioned for Qtr. only) Accrued bonus Rs 115,200

    My opinion is for paid up- reason being at least i could get all my premium paid & life cover for the paid up value at the end of policy term ( correct me if I am wrong)

    Personally i have not taken Term insurance & Medical insurance ( present coverage by office policy)

    Annual payments to these endowment plans approx. to RS 50,000; My plans would be to use this money towards medical insurance Rs17,000 ( 10 lakhs coverage) & Term insurance around 50 lakhs and balance would for other Equity investments

    Kindly Suggest

    Krishna

  • Hi Srikanth,

    I had filed my income tax returns for Assessment year 2014-15 & 2015-16 for the first time and initially the status was showing ‘Successfully E-verified’ and now status changed to ITR Processed and when I click on ITR-V Acknowledgement the status is showing as “ITR Processed no demand no refund”.

    What does this Status mean as well Is this the last step from IT

    Regards,
    Habeeb

    • Dear Habeeb..It means your Tax Returns has been verified, processed & no discrepancies have been found. You are neither liable to pay and taxes (nor) you are eligible to receive any refund from the IT dept :). Yes, this is the last step.

  • Aribitrage Funds – Request you to advise [i] the pros & cons about these funds. [ii] How come these are not heard that much in investing arena. [iii] the best performing funds in this category [iv] your observations about these funds in the market.
    Liquid funds – [i] Will you please highlight about the ‘Liquid’ part.
    [ii] which are the funds faring well in this category.
    [iii] whether the Arbitrage and Liquid funds are two identical type of funds or
    meant for totally different goals.
    Thank you very much for, the way your answers being drawn.

  • Hi shree….have bought a flat in 2015….the date of agreement of flat is oct 15….whreas my loan has been sanctioned in Feb 16, EMI started in Mar 16.Property value less than 50 lacs n loan less than 35 lacs…am I eligible for additional 50 thousand rebate as per latest budget provisions??

  • Hi Srikanth,

    Even few chits (chit funds ) are giving better returns as equal to equity funds within short time period ( less than 3 years). What do you opine. When one has short term goals, chits comes in handy with better returns and liquidity in reach.

    Thank s,
    Rakesh

    • Dear Rakesh,
      Most of the small-scale chit funds are not well regulated and we have seen in many cases how they just turn their boards and vanish.
      Also, the challenge with chits is it is very tough to calculate returns as the returns are dependent on many factors and also the returns vary depending on the pool size/profile.
      Whereas, mutual fund industry is very well regulated one and liquidity is also good.

  • Hello Sreekanth,

    I’m 33yr old IT employee married, has 2yr old kid staying with parents at own house in Hyderabad. My wife insists on purchasing flat, but I’m interested in independent house or land with little high homeloan. Could you please let me know which has more appreciation in future. Is investment in mutual fund better than Real estate.
    Regards,
    Srikanth

      • Personally I prefer to invest in an independent house to flat. But kindly do not acquire it by taking higher loan amount, as long as it is within your repayment capacity and provided you have made adequate allocation to other high priority goals like your retirement etc, it should be ok.

  • Please let me know that monthly income advantage plan offered by Max Life in which after paying 12 annual premiums will get a monthly income for next 10 years & get a lump sum amount (equal approximate the premiums paid in 12 years in the beginning) plus approx. 14.5 times death benefit for the entire policy term i.e.22 years. I want to know whether any other plan in other company offers as like this. Please suggest me. Thanks

  • Hi Srikanth,
    What will be the impact with the new rules 2016 on Voluntary PF.

    Thanks,
    Murali.

    • Dear Murali..Same as applicable as on the mandatory PF contributions.
      I believe that its better to invest in other equity oriented products (ELSS) or PPF instead of VPF, considering the fact that one can not withdraw full balance before 58 years.

  • Hi sree,
    I already started SIP with hdfc via agent.now with same folio can I start new SIP direct growth plans.if yes thentell me procedure.
    Thanks

  • I HAVE NOT YET RECEIVED THE INTIMATION UNDER SEC 143(1) THOUGH I HAVE BEEN INFORMED FROM CPC BANGALORE THE PROCESSING IS OVER AND THE SAME WOULD BE SENT TOME THROUGH MY E MALI ADDRESS

    MEANWHILE I RECEIVED REFUND WHICH IS VERY LEES AGAINST WHAT I HAVE FILLED IN MY RETURN IN AY 2015-16

    I have tried may times to contact CPC Bangalore but could not have been successful.

    KINDLY HELP

    PRADIP KUMAR MAJUMDAR
    PAN NO ****

    • Dear PRADIP,
      Kindly do not share PAN number on public forums.
      Without looking into the documents, it is very tough to assist you in this matter.
      Kindly consult a CA.

  • Sir regards.I am investing in following funds for last 8 months.7000 icici blue chip,30000 icici value discovery,10000 hdfc mid cap,30000 Tata balance.my horizon is for 10 years.are funds ok.should I decrease my allocation in balance fund and increase in diversified or midcaps.Thanks for your help

    • Dear saurabh,
      The invested funds are good ones. As you have a long-term view, you may reduce the allocation towards the balanced fund and can consider investing more in icici value & hdfc mid-cap fund for next few years (say 3 to 5 years).

  • Dear Sreekanth,
    We have been investing:
    1. 1.5 L in ICICI Lifestage Pension per year since 2009.
    2. 1 L in HDFC Savings Assurance Policy per year since 2009.

    There are 3 more installments remaining for both. My husband and I are close to retirement. Is it better to close them now and redeem and invest in other mutual funds? Kindly advise.
    Thanks,
    Geeta

    • Dear Geeta Ji,
      If the policies are nearing the maturity dates, you may hold on to them.
      Have you accumulated sufficient corpus to lead comfortable retirement? Do you have adequate health insurance coverage? Do you have any family member(s) who are financially dependent on you?

  • I am a member of Central Govt housing society and allotted a plot for which i have been paying installments since 2004. Finally the property was registered in my name in June 2015, for which the amount paid is less than market value(govt guidance value). Stamp duty is paid as per market value. The difference between market value and actual amount paid to society is 1.8lakh. Do i need to pay tax for this amount as it is treated as income from other sources? This society launched this project 10 years back, i had paid more than 50% of the value 5 years back in installments and remaining 50% last year june 2015. My doubt is, if bank interest is calculated on the 50% paid 5 years back, it comes to more than 1.8 lakh. In that case i do not have to pay any tax?
    Kindly advice whether i need to pay tax on this differential amount. Thanks in advance

    • Dear pandirivs..I am unable to understand your point. You have to pay capital gains tax (if any) only when you sell the property.
      For taxation purposes, the registered value is considered as the purchase price.

      • Dear Sreekanth,
        My point is if the property is purchased at a price less than market value/govt guidance value, the differential income i.e. the actual amount paid to the seller and the fair market value of the property is considered as “Income from Other Sources”.
        I paid stamp duty and registration charges as per fair market value(govt guidance value), but the actual amount paid to the society is less as this project was launched 10 years back, and over a period of time i paid more tahn 50% of the amount, and remaining 50% before registration. i.e. last year June.
        I read from income tax web-site that under the following headings

        Incomes which are charged to tax under the head “Income from other sources”, one the points is
        Immovable property received by an individual or
        HUF for a consideration which is less then its fair market value

        In my sale deed it is clearly written that the amount paid to seller(society) is 10 Lakhs(for example), whereas stamp duty and registration charges paid are for an amount of 11.8 Lakh.

        Can you please clarify on this

        • Dear pandirivs,
          In your case, you have paid the expenses, so how can it be ‘income’ to you.
          Am I missing something here. You may kindly take help of a tax expert / CA.

          • Dear Srikanth,
            I might not have put my issue clearly. Let me write it once again, so that you can understand my case better.
            Income tax rule is “Immovable property received by an individual or
            HUF for a consideration which is less then its fair market value are charged to tax under the head “Income from other sources”.
            My case comes under this category as i paid only 10lakh to the society, whereas its market value is 11.8 lakh. Of course stamp duty and registration charges are paid for 11.8 lakhs only.
            So this difference amount of 1.8 lakh is consideered as income from other sources.
            I have to pay tax for for this as per my slab which is 30%. There is no ambiguity in this. The point which i am not able to make it clearly is, since this society launched this project in 2004, and i paid 50% of 10lakh before 2009(in installments, from my own sources), and if interest is calculated (as per RBI interest rates) on this 5 lakh from 2009 to till now, it comes to more than 1.8Lakh.
            I ended up paying more than 11.8 lakh altogether to the society if you include interest portion on the payments made before 2009 plus actual amounts paid i.e. 5 lakh before 2009 and 5 lakh in 2015.
            My question now is, as per Registered sale deed amount paid is mentioned as 10 lakh and market value is 11.8 lakh. Do i need to pay tax for this difference amount?

            My claim is i ended up paying more than 11.8 lakh to society (if interests are also calculated). Is my claim a valid point for not paying tax for this difference amount of 1.8Lakh?

            Thanks in advance

  • Hello,
    I want to invest 25000 per month through SIP’s in mutual funds. After some research on net I have selected following funds:
    Amount Fund
    5500/- Axis Long Term Equity (For Tax saving)
    4500/- Birla Sun life tax plan (For Tax saving)
    4000/- SBI Bluechip
    4000/- Mirae Emerging Bluechip
    4000/- SBI Magnun balanced
    4000/- DSP-BR Micro cap or Tata Dynamic bond (confused)
    Please suggest me if above division of money and selection of fund is good enough or not. If not please suggest modifications. My age is 32 years and investment horizon is around 5 years.

      • Thank you very much Sreekantji for your reply. After putting much thought and analyzing portfolio overlap I have decided to invest for 8-10 years (previously asked for 5 years). I reached for following funds as SIP’s:
        1. 5000/- Mirae Emerging Bluechip
        2. 5000/- HDFC balanced fund
        3. 9000/- ELSS Fund (AXIS LTE/Franklin Tempelton Taxshield/Birla Sunlife Tax plan)
        4. 6000/- Not decided; need help!
        I have few questions to ask::
        1. As I want to invest 9000/- in ELSS, should I invest in one ELSS fund (AXIS LTE or Franklin Tempelton Taxshield or Birla Sunlife Tax plan) or should I divide 9000 and invest in two/three funds. If one fund is sufficient then which is the best ELSS fund to start SIP for 2016-17.
        2. In my planning I have included Large and Mid cap funds as well as one balanced fund. I want to invest 6000/- more with 8-10 time frame. In which additional fund (small cap or diversified or debt) should I invest for maximum benefit. Or should I distribute this 6000/- equally in above funds.

        • Dear Nites,
          1 – If the overlap between Franklin Tax shield and Axis LTE is low (say less than 30% or so), you may invest in both.
          2 – You may consider one equity diversified fund like Franklin Prima plus or ICICI Pru value discovery fund.

  • Hi, I have taken LIC Jeevan Saral A T M plan.
    Its been 3 yrs now. I am paying 4000 Per months. Plan is for 35 years. After Maturity i will be getting 1.5Cr.

    After going through various blogs i feel is not a good returns. Please let me know your views.

  • Hi Sreekanth ! Request u suggest or pave a way, for, I have a grand daughter who is born in US. I wish to open a suitable mutual fund with good performance. In as much the baby is US born, I can not open in her name directly, keeping myself being as ‘guardian’ . Hence,[i] request you to suggest a mutual fund which in turn shall be useful to her @ 18 yrs. age or so.
    If no suitable fund available to do so, any other mutual fund, to serve MY PURPOSE.
    [2] Also, request you to suggest a suitable method / fund / stock keeping the basic intention of investment in mind. Thank you.

  • Sir,

    Is there any health insurance available in the market covering sibling, mother and myself

    Manoj

  • Hi Srikanth. I am Dr.Kishore Gangineni. i spoke to you on whats app on the 5t of march for some advice. below are a set of mutual funds which i selected. i want to invest one lakh into each. Please let me know you opinion.
    Tata Ethical, ICICI Pru Value Discovery ,Franklin India Prima Plus ,IDFC Premier Equity, Mirae Asset Emerging Bluechip

  • In my home loan (taken 5 yrs back)my wife is coapplicant &coowner.Till now i m taking benefits of 80c and interest paid exsumtion as i m only paying total home loan.Now my wife is eligiblefor tax so we want to do prepayment (adiitional to regular EMI)for getting tax benefit under80c.Whether paying prepayment from her bank acoount will help her to get tax exsumtion.please suggest.Means Can we both benefit for sec 80c ‘EMI principal benefit to me and additional 1.5 lac repayment benefit to my wife?

    • Dear SHITAL,
      Kindly note that the tax benefits have to be claimed in proportion to the share of ownership in the property.
      Yes, in case say if you repay Rs 3 L worth of principal, both of you can claim Rs1.5 Lakh u/s 80c.

      • Dear Sreekanth,
        Thanks for infirmation.From your mail it seems my wife can get benwfit of tax exsumption.In our case we have not decided proportion of ownership in property. I checked index 2 and no such proportion is found.So whether need to fix it before claiming tax benefit for wife?
        also paying additional premium from my wife account will help her to claim tax benefit….

  • Dear Sir, I am on higher bracket income tax slab. My wife was earning till last 2 year. since last 2 years i am transfering rs 50000/- to her account each month from my salary. i want her to continue her return filing. how to show the income for return purpose since that money is tax paid from my earnings. second she has lot of FD’s on her name & our children.
    we want to transfer the Fd’s into some good mutual funds or tax bonds. i am new to investment line. all these years i have not planned any major investements.

    pls guide some good schemes. i am 53 years & wife is 45 years.

      • I have good mediclaim policies for me & family & have pension fund insurance & for my doughters yearly return for higher education purchase.

        every month i can park about 25000/- for next 2 to 3 years. i have 2 houses. but do not have any investements in shares/mutual funds now.

        pls suggest good investments in my left our 3 years of services. i do not have pension after retirment.

        • Dear Mukund,
          If you do not have pension after retirement, have you accumulated sufficient retirement corpus so that you can lead comfortable retirement life?
          If your investment horizon is 3 years and can afford to take high risk, you may consider investing in balance fund + aggressive MF MIPs.
          Read:
          Top Balanced funds.
          Top MIP funds.

  • hi Srikanth

    Hope you are doing well.

    As the repo rates may come down in short , when to invest in bebt funds, principally into income funds. Is it prudent to invest in income funds (debt funds) quarterly. Keeping current market condition please suggest when to invest as the repo rate may come down as per the news.

    Thank you for your guidance.

  • Dear Sir, One small Query ! Can you suggest a formula to Calculate the monthly savings if one has to achieve a corpus of 600000/- @7.5%p.a Quarterly interest withing a period of 60 months..

    Regards

  • Hi Sreekanth,

    I am Narasimhareddy planning to do CFP? I stay in Hyderabad. Could you lease provide any inputs or assistance for training any other information?

  • Hi Sreekanth,

    I am a retired person from and with no pension. I have FDs which are getting matured in this month for about 10L. Pl suggest me good mutual funds for long term investment for 5/6 years.

  • Hello

    I resigned my job in June 2014. My PF contribution was kept intact. I joined a new company in UAE.

    With new law and amendments, should I keep the amount left in PF or should I take it out and invest it in some other format of saving like bond or share.

    Regards
    MP

    • My Personal Suggestion : Please withdraw the amount and invest in Shares or Mutual Funds periodically for god returns in longrun.

    • Dear Manoj,
      You can now withdraw your share + interest thereon only. The employer portion can be withdrawn at the time of retirement age.
      You may withdraw and reinvest the fund according to your financial goals.

  • I am a married guy aged 29 years. Me and my wife are working with combined income of 2 lacs. Our combined expenses are around 60k

    We have the following long term and short term goals

    Short Term

    Annual Recurring Vacation – Budget 2 lacs each year

    Long Term

    House in 5 years – Required 75 lacs
    Retirement in 26 years – Required corpus 10 crores

    Investment Plan

    For Retirement:
    Trying to build 60:40 distribution like below:
    Annual EPF (mandatory) – 1.04 lac
    Annual ELSS – 32000
    Annual NPS – 1.02 lac
    Annual PPF – 48000

    For House
    Thinking of 40:60 Portfolio at 1 lac per month

    Questions:
    1. Can you suggest if my retirement portfolio looks ok ? Or do you suggest an alternate allocation ?
    2. For retirement portfolio – which ELSS should I invest in ?
    3. For House – Do you agree with the Equity:Debt allocation?
    4. Can you suggest mutual fund categories and mutual funds to invest in for house goal?

      • Hi Sreekanth

        Thanks much for your reply ! Appreciate it 🙂

        Yes, both me and my wife have a 3L health cover from the employer. Additionally, we purchased a separate Religare floater cover of 5L. I also have a term policy of ICICI for 1 cr

        For short term – Yes I will invest in RDs/ FDs

        Couple of questions for medium and long term goals

        1. Medium Term Goal – House in 5 years – I plan to build a 40:60 equity: debt portfolio, by investing in one balance fund and one MIP
        a. Do you think this equity:debt allocation looks good ?
        b. Do you agree with the Balance fund, MIP approach ?
        c. Am not very aware of the risks associated with MIPs. Do you suggest I use FDs for debt allocation

        2. Long Term Goal – Retirement
        a. I have a 60:40 portfolio for equity: debt currently. Do you think it will be prudent for higher equity at this stage

        Finally, I really want to convey my gratitude for maintaining such an informative blog. I find the various resources really helpful.

        Wish you best of luck for the future.

        Thanks
        Saurabh

        • Dear Saurabh,
          As your wife is also an earning member of your family, she can also opt for a Term plan cover.
          1 – Fine. (Read more one : MF MIPs). You may invest in balanced funds for say next 3 years and then switch to safe bets before the target year.
          2 – Considering your profile, you may allocate a higher percentage for equity for next few years.

  • Hi,
    What are the benefits will get for continuing PF account for 10 years?
    from aug 2006 to july 2009 i was using one PF account no. and from aug 2009 to till date another pf account no. and i have transfer my PF amount from first account no. to current PF account no. which i am continuing, is it will be considered from aug 2006 or it will be considered from aug 2009 for calculation.

  • Hi Sreekanth, This is Kaushik from kolkata.

    Need your assistance & guidance.

    Myself 32 years of age, haven’t invested in MF so far, Continuing saving through RD/PPF/FD with Banks.

    Want to invest in MF from April’2016 initially with very less amount for a long term fund equity/diversified equity fund.

    I have sorted out some Fund like I Pru Focused Blue Chip, Franklin Smaller Company .

    please suggest me for investing just Rs 3000 /- monthly .

  • Dear Sir,

    Today I read following from your blog
    As per the recent amendment to Section 45 of the Insurance Act, If your policy is 3 yrs old, no matter what happens, the life insurance company will not be able to deny the claims. So, your life insurance company has only 3 years in hand to reject the policy based on any mis-representation or mis-statement. Once 3 policy years are completed then the life insurance company has to settle the claims and can not reject them.

    So it means if my policy survive for 3 years then company will have to pay claim. which partially mean claim settlement ratio is no more a criteria for selecting term plan

    • Dear Ashish..Claim settlement ratio is still important before buying a term plan. But once the policy period crosses 3 year, life insurance company has to honor the claims (if any).

  • Dear sir,
    I have only this question or doubt. No more. By the way what do u mean by subscription. Sending u a question or asking to clarify ” is it priced one” or free?. Please do not think I am stingy.

  • Dear Sreekanth,

    In today’s budget announcement, the FM made the following statement:
    ___________
    Pensions to be partially taxable

    Under the National Pension Scheme, the government announced an exemption for withdrawal of up to 40% of the corpus at the time of retirement.

    Meanwhile, in case of recognised provident funds, including the EPF, the same norm as NPS will be applied. It implies introduction of taxes on withdrawals from such instruments, which had a total tax-free withdrawal, will now come under the tax ambit.
    ____________

    After retirement on 1/4/2013 at the age of 62 yrs, I left both employee & employer contributions in the EPF fund since I was informed that for upto 3 yrs the corpus will continue to accrue interest. Now, I wish to initiate the withdrawal by 31 March 2016 after the completion of 3 yrs of my retirement.

    Will the above amendment (tax on EPF) impact my withdrawal amount.

    Please let me know.

    Regards

    Prakash

    • Dear Prakash,
      As per the budget, the 40:60 rule is applicable for the contributions made from 1st April 2016.
      I believe that you can withdraw full EPF amount. Suggest you to kindly withdraw it and re-invest in other alternatives based on your requirements.

      • Dear Sreekanth,

        Thanks for the clarification. This is a real big relief for me.

        Linked to the same question, I have the following few more queries:

        I joined an MNC at the age of 51 yrs and retired at the age of 62 yrs. That is, after completing 11 years of service. As far as PF is considered, following is my understanding:

        1. Towards an individual’s PF account, every month the employer contributes 8.33 % of basic pay and the employee contributes an equal amount. This is a statutory requirement. Over and above this, the employee can volunteer to contribute a certain amount not exceeding a certain limit. These amounts are exempt from annual tax.

        2. If the employee retires after superannuation after completing 58 of age and 10 yrs of continuous service, he/she is eligible to get employee contributions (both statutory and voluntary) and employer contribution. However, in my case, my services were extended till the age of 62 yrs on regular employment on the rolls of the company. Till superannuation my PF contributions were deducted on a regular basis.

        3. I chose to leave the PF money in the fund for 3 yrs after superannuation as I would continue to get interest on the entire sum. This I thought was a decent enough investment by itself.

        4. Now, after completion of 3 yrs after retirement I would wish to withdraw the entire money from the PF fund. I am told that following would be what I would be getting (a) About 4% of employers contribution and associted interest thereof, (b) 8.33 % of employers contribution and associated interest will be parked in a pension fund and I will get an annuity, and (c) My contribution (both statutory and voluntary) and associated interest thereof.

        Is my above understanding correct? Please clarify.

        Regards

        Prakash

  • Hi Sreekanth

    I find your articles very useful, have one query I e-verified my returns on 13 feb 2016 and status is showing as ‘Successfully e-Verfied’ and I wanted to know what is the next process after this? and how much time it will take to complete whole process?

    Kindly help me on this.

    Regards,
    Mukaram

  • Hi Sreekanth,

    I have a nephew who is 4 years now. I am planning to invest ~60,000/- INR per annum in PPF for 15 years on his name. Per online PPF calculators, at the end of year 15 closing balance is coming to INR 1870367. Does this mean i will be able to withdraw whole amount(closing balance) end of year 15?

    Let me know if this is a safe bet as i do not want to take any risk investing in MF’s or other form of investments. Are we able to open PPF account for minors? Otherwise i can open on my name(i do not have one).

    • Dear Meena,
      I am not sure if you can open PPF A/c in your minor nephew’s name. I believe that it is not allowed. (in minor son’s name accepted).
      Yes, you can withdraw the entire balance after 15 year lock-in period.
      PPF is one of the best and safest debt instrument. As per the existing tax laws, the maturity amount is tax exempted.

  • Hi Sree,

    I am planning to Open an Bank account for my Son (a month old).

    1.Wanted to Know amount accumulated in this account will be taxable.
    2.Will it be added to my income.

    Currently I own two funds:
    Axis long term equity and UTI mid cap – Direct plans – SIP 2500 Rs.

    Now I want to add two more funds for my child educations and future> I have shortlisted two funds:
    ICICI pru value discovery.
    Tata Balanced fund.

    Please suggest.

  • After 28 years service company get my forcefully resignation for a reducing team can i get additional benefit?

  • pls reply fast
    it is urgent
    I have bought LIC bima bachat plan (Table 816), Money back policy for 9 years as term.
    i have received 15% of Sum assured at the end of 3rd year.
    will this amount be taxable or not?

      • Dear Shreekanth Sir,

        Thanks for your prompt reply

        but sir, i am not surrendering policy policy will mature after 9 years only
        only thing is i will get 15% S.A at the end of 3rd year, another 15% S.A at the end of 6th year and the maturity amount at the end of policy term i.e. at the end of 9th year.
        my query is whether this 15% S.A which i have received at the end of third year and 15% SA which i will receive at the end of 6th year is taxable or not?
        if taxable What amount will be taxable?

          • yes i am referring to interim benefits.

            Thanks for your guidance.

            if it is tax free why LIC is deducting TDS on it?

              • Dear H K,
                TDS deduction shows that your policy is taxable. If it was purchased before April 2012, then its sum assured should have been atleast 5 times of annual premium and if purchased after April 2012 then the sum assured should have been 10 times of annual premium to make your policy non taxable.

                Now deduction of this TDS is like an intimation to tax authorities and indication to you that you have taxable income from insurance policy too.

                If the policy is pension plan then you have to add the complete surrender/maturity proceeds in your taxable income and calculate tax on total income. If your income is below the basic exemption limit then you can claim back 2% paid as TDS otherwise have to pay extra tax.

  • Hi Sreekanth,

    On September 2015, I have registered for atal pension yoga scheme in SBI and received PRAN no through SMS. They are debiting rs. 922 every month. Below are the queries about it

    1. Does they give PRAN ID card, when contacted the bank employee they don’t have a clear idea about it.
    2.Does they provide portal to login and check the amount .
    3. I am tax payer does it benefit to me
    4. can I open one for NPS account from other POS ( for tax savings, currently atal pension yoga limits max of 922 for every month)
    5. what are the procedure to cancel this scheme if required

    thanks,
    Vijay

  • Iam investment plan 3000 per month icici pru value discovery fund and reliance small cap funds 5000per months plz suggest me

  • Hi Shree,
    I am Krishna, I am purchasing house in my wife’s name. In loan application I am applicant and my wife is co-applicant. My wife is house wife, she don’t have any source of earning and I will pay total loan amount.
    Please clarify can I get tax exemption and benefits or not. As I am not a co-owner.

  • I m planning to buy a term plan, i hv shorlisted SBI Life, Max New York and Bajaj Alianz, which u will suggest

  • Can NRIs invest In NHAI Capital Gains tax bonds to save capital gains from sale of property. The property sold in India

  • Dear Sir,

    I am working in Central Public Sector Undertaking in the 1992 pay scale. The Govt. of India (CCEA) has approved the closure of this non-performing company by sanctioning VRS/VSS on 2007 notional pay scale and retrench the employees under Industrial Despute Act, 1947 those who do not opt this VRS/VSS. The CCEA has given approval to calculate VRS amount, Gratuity and leave Encasement on 2007 notional pay scale at par with the last pay scale revision of CPSU.

    Sir, I wanted to know, whether the Gratuity paid (Rs. 10 L) to the employees under this case is taxable or not.

    Hope I will get a solution at the earliest.

    Thanks & Regards

  • Hi shreekanth… My portfolio is as follows
    Uti equity 2000
    ICICI value discovery 2000
    SBI small and mid cap 1000
    ….. Want to add couple of more funds… Pl suggest….BSL front line equity or ICICI pru focused equity, Franklin India smaller companies or TATA balanced

    • Dear Suchita,
      Kindly let me know your investment horizon??
      Invested funds are good ones. But I prefer Franklin Smaller cos fund to SBI small cap fund.
      You may add TATA balanced fund to your portfolio.
      Also, note that the fund manager of UTI Equity has been changed, so do track its performance for the next 12 to 18 months.

      • My horizon is about 20 years…..children education n retirement…n want to keep 3 funds for each of the goals
        ….hence want to add 3 more

        • Dear Suchita,
          You may invest in the same set of funds for different goals if the time-frame is long-term (say >10 years).
          You may add one Balanced fund and one more small cap fund.
          Ex – TATA Balanced fund & Franklin Smaller cos fund.

  • Dear Sreekanth Garu. I am planning to Invest Rs.15Lakhs bulk amount in Birla Sunlife MNC Fund. After completion of exit load i.e after 1 year, i want to take profits for monthly expenses. I go through the past record 15 years record of Birla MNC, only 3 times it turns negative. And all the other 12times, returns is good. Please give your advise in this issue.

      • Yes I got the amount. But without Interest. The below is shown in the passbook but not paid

        Int. Updated upto 31/03/2016 Employee share: 13,702 , Employer Share: 8,469

          • Hi Srikanth,

            I seriously don’t understand what u r talking abt.

            I am asking u if I will get this Interest which is payable in Mar’16 even after I have withdrawn all the PF and pension amount in Dec’15. I understand the calculation. but will that be paid? Because I have withdrawn everything before Mar’16, but the interest from Apr’15 to Mar’16 is not paid. will the interest be paid after Mar’16 or will it not be paid since I did not keep the amount until Mar’16.

            • Dear Shalini,
              The interest amount that is payable to you from Apr 2015 to Dec 2015 has to be paid to you by EPFO at the time of PF withdrawal only. Since you understand the calculation part, you may try to find out the exact interest amount.

  • Hi,
    What is the procedure for name change, the PF no. which i was using from aug 2009 provided by my employer, it shows some other employee name of our company. This has happened after transition ( name of company changed) in feb 2013.

  • I have taken ICICI Lombard ihealthplus comprehensive cover of 10 lakhs along with critical illness. They are issuing policy only for 2 years. I paid premium for 2 years and they say no medicals upto 46 years. I got my policy issued. Does this mean once I cross 46, even though I have active policy, I have to do medicals?

    • Hi Shreekanth..kindly answer my query as soon as you find time.

      Also I have another query..I already have a very high term life cover through my employee which has accidental benefit too. In addition I have good insurance through ULIP HDFC SL Crest (30 lakhs) as well as some policies through LIC (15 lakhs) . The issue is most of these end at 58(when I retire) or by 50-55 from other insurers.

      Should I go for a term cover from an outside insurer ?

      ICICI iprotectsmart term life has no medicals if you take insurance upto 49 lakhs. Is this correct?

      Also ICICI icare term life has no medicals till 1 crore. Is this correct?

  • Hi Sreekanth
    I want to deposit Rs 10 lacs . I’m a NRI. Time period only 9 months. I need this money back January 2017. Mutual funds not possible because my KYC not completed. Fixed deposit less than 1 year they are telling no interest for NRI. So please suggest me the possible best way to deposit.
    Thank You
    Justin

  • Srikanth Ji.. I am planning to Invest a Lumpsum of Rs.10Lakhs in Birla Sunlife MNC Fund for a time horizon of 15 for my daughter Education and Marriage purpose. As of now, she is 2years old. Please advise can i invest the amount before budget session or after budget presentation. Please provide your suggestion.

  • Hi Sreekanth,

    Could be pls guide me, to meet the educational and marraige goals of my daughter, I should invest in Child plan / Sukanya Samridhhi / or Mutual fund through SIP, as my daughter is 4 years old now and I have a horizon of 15-20 years.

    If child plans? Pls suggest which one.

    For mutual funds, shall I go ahead with your recommended list for 2016.

    I want to invest 10000-15000 per month.

  • Dear Sreekanth,

    I propose to let out my first floor in Bangalore suburb, The proposed tenant would wish to use it for commercial purpose (to open an office). In this regard I would wish to have your guidance & advise on the following queries:

    1. Are draft rent agreement(s) for commercial purpose, that would be legally binding in Karnataka, available on the net.

    2. Is it required to get the agreement executed on a stamp paper through the help of an advocate.

    3. Will such an agreement stand good (valid) in a court of law.

    4. The prospective tenant has agreed to bear additional expenses arising out of incremental increase in corporation tax, electricity & water charges.

    5. Are there any other additional points that I need to take care while finalising the tenancy agreement.

    I would greatly appreciate your response on the above.

    Regards

    Prakash

    • Dear Prakash,
      1 – Is your property a commercial one or residential? Do you have the required approvals to rent it for commercials purposes?
      2 – Stamp paper, Yes. Advocate’s help, optional.
      3 – Duly signed agreements are legally binding on both the parties.
      5 – Renewal clause – increase of rent, agreement duration, deposit/ advance refund clause, advance notice clause for vacating the premises, deduction of amount towards maintenance/painting charges while vacating the premises etc.,

      • Dear Sreekanth,

        Thanks for your kind response. However, I still have a few couple of queries:

        1. Mine is a residential property. Who will provide me with the relevant clearance for letting out the first floor of my property for commercial purpose.

        2. Are templates of such draft agreements available on the net. If so, can you pls provide me the relevant links.

        Regards

        Prakash

        • Dear Prakash,
          1 – If you have got Sanction plan approval for Residential use only then legally one should not let out the property for Commercial use. If they are going to display any Sign board (office name), revenue tax collector may ask you to pay property taxes accordingly. Because property taxes for commercial usage can be different and higher.
          You may visit your local civic body and check about this. (But we all know that many owners do not follow most of these rules and just let out the properties for commercial offices too).

          Kindly visit thise link..
          Commercial Property Rental Agreement – Template

  • Hi Sreekanth,
    This article and suggestions are really helpful. Thanks a lot for your valuable time to share your thoughts.

    Could you please guide me are the following SIP are good?

    SBI FMCG Regular Plan Growth – 5000
    SBI Magnum MidCap Reg Fund-G – 5000
    SBI Pharma Fund – Reg Plan – Growth – 5000

    Thanks,
    Lavanya Jayakumar

    • Dear Lavanya..Any specific reason for shortlisting SBI funds only? Kindly note that sector funds like FMCG/Pharma can have very high risk profile. If you understand their business cycles, you may invest in them.

      • Thanks Sreekanth for your reply. One of my friends who is certified financial planner has suggested to invest on these funds.
        Though we have high risk profile, is it worth to continue in these funds as I started before 6 months?

        Regards,
        Lavanya

        • Dear Lavanya,
          It is prudent to invest in funds from different fund category and across fund houses too.
          FMCG & Pharma funds are sector oriented funds, kindly understand the risks associated with thematic funds and do track the industry news/cycles.
          Kindly let me know your investment horizon.
          Kindly read:
          Best Equity mutual funds.

  • Dear Sreekanth,

    Just now I came across the following news item:

    EPFO raises rate marginally to 8.8% for FY16, leaving trade unions unhappy

    If I am correct, this is only a proposal. When is it likely to be finalised by The Finance, Investment and Audit Committee?

    Regards

    Prakash

  • Sreekanth,

    I want to apply home loan in SBI in my Wife name as main Applicant and me as Co applicant. My wife is not working. Can i claim the tax exemption for the EMI I will pay. When i ask to my accounts dept in my company they are telling that I should be main applicant in the home loan for getting TAX exemption… but, SBI home loan executive is telling Co applicant an also get tax exemption.. Which is True ?… Please Clarify me at the earliest

  • sir,
    I had made an sale agreement with the builder as follows . I told him to write the agreement as that my wife will be the first owner & myself second owner. But after seeing the agreement it seems it is written fully in the name of my wife only.. Pls clarify it.. pls find the agreement first page for reference

    SALE AGREEMENT

    *************

    • Dear Raghavendra,
      Kindly do not share your personal details (Address/PAN no etc) in public forums. I have deleted a portion of your comment (but I have gone through the entire query).
      Based on the info you have provided, the sale agreement is completely written in your wife’s name only (as the sole owner). So, kindly check with your builder about this and get it changed as per your requirements.

  • Can an employee generate more than one UAN? Is it OK to do so? Are there any penal provisions if done knowingly?

  • HI Sree,

    Review MF plans:

    I have SIP 2500 Rs in UTI Mid cap fund Direct Growth from Nov 15. Should I continue this fund or not as fund manager has changed. I checked it on Value Research. I you advice to exit then please suggest other plan

    Axis long Term Equity Fund Dirct Growth – Sip 2500 Rs.

    Suggest one balanced fund for long term for wealth creation.

  • Hi Srikanth,

    I have been following the site and its very useful for any person for his financial planning.

    I have 2 queries. Currently I am investing in SIP for ICICI focussed Blue chip Equity growth.

    I am planning to go for another SIP as well into Balanced as the markets are also not performing well and also on long term basis for 10 years from now. Which one do you suggest and Equity or Debt oriented?

    Secondly, regarding gold, did the new gold monetization scheme started by the govt and whats the best way to utilise the surplus gold which just lies in lockers?

    Thanks in advance
    Arun

  • Hii,We want to purchase a flat.we are already looking many flats.But all those are telling they don’t have cc and oc.They are also telling we can regularise it later. One of the land owner said that land is A khata so.don’t have any problems. Many of my friends they also bought flats without oc and cc. Plz suggest me what to do? We are in dilemma and scary abt future..

  • Sir
    I want to know about which is best in between Franklin Prima plus and Icici pru value discovery as my aim is for 10 years through sip kindly provide your specific valable suggestions
    thank’s

  • Dear Sreekanth,

    As per The Hindu dated Jan 14, 2016 ,The Finance, Investment and Audit Committee (FIAC) of the EPFO was scheduled to meet on Monday Jan 18, 2016 to consider 8.9 per cent annual dividend on PF savings for 2015-16. Has this been announced?

    Thanks

    Prakash

  • Hi Sreekanth

    I have a plot which I am planning to sell this year (2016), I have been owning it for more than 36 months and I understand that I am liable for 20% Capital Gains Tax. The question I have is, can I claim exemption of CGT on the below property. I came across a condition in your blog that if the sale proceeds was invested in the last 1 year or in next 3 years we can claim exemption. Does my below property investment qualify for CGT exemption ?

    I recently purchased a flat thru a promoter, furnishing details below.

    Agreement entered with Builder – July 2012
    Sale Deed Registered (for Undivided share) – Jun’2015
    The construction is still not complete and I am NOT in possession of the unit.

    Please advise.

    Thanks
    Seetha

  • hi,
    This is Deepa.I have quitted job on Jan 2016.
    pension query:To avail a pension benefits need to be in service for 10years.currently I have 7.5 years.please suggest wat to do with pension amount.I hope pension amount won’t yield interest.
    Note:planned to join company after 2 years.

  • Asking a question on behalf of my elder brother. He has been investing in Mutual Funds since many years but does not have same email address in every folio. In fact he does not know to use an email. Being a mandatory field I guess the distributor may have put some dummy email and processed transactions.

    I have created an email address for him. Please suggest the shortest way by which I can get new email address updated in all the Folios online. It may help in getting consolidated statement of all funds from CAMS website.

    Thanks in advance.

  • Hi Sreekanth,
    I had resigned from Tech Mahindra the then Satyam Computers in October 2014. My service was 9 years, 9 months and 8 days. I had applied for PF withdrawal in form 10 c (pension Component) and 19 (employee provident fund). I got full amount pertaining to form 19 and unfortunately my pension amount is not released. I had raised a query regarding the same and the reply from them is as follows

    “This is to inform you that as per our record your service is 9 years 9 months which is considered as 10 years in rounding up in system. So you are not eligible for withdrawal benefit only eligible at present for scheme certificate. You are requested to submit form no.10-c along with family details”.

    Some how I don,t believe those government guys. Please guide me.

    Please let me know if you require any other information on the same.
    Thanks in advance,
    Regards,
    Y Sridhar Reddy

    • Dear Sridhar,
      One can withdraw pension (EPS) if service is less than 10 years.
      As your service is 10 years, you can withdraw pension amount after attaining 58 years of age.

      • Dear Sreekanth,
        I had clearly mentioned that my service is 9 years, 9 months and 8 days only i.e. (from 10th January to 14th October 2015). I had not completed my full 10 years service. Does 9 years, 9 months and 8 days equal to 10 years?

        Regards,
        Y Sridhar Reddy.

  • I hv invested 60 k p.a. In sbi pension fund for 4 yrs, for which I hv taken tax rebate under 80 c. Now , I wanted to surrender my policy and I am only getting 2.58 lakhs also they said I will b deducted 2% tds extra . After sirrendering my policy do I hv to show it in ITR returns and extra tax do I hv to pay. Thx .

    • Dear Ravi,
      Surrendering the pension plan before maturity has serious tax implications. First of all, the premiums that you have claimed as part of deduction under section 80C will have to be reversed and you will have to pay tax on it. Secondly, the entire surrender value will be added to your income and you will have to pay tax on it according to your tax slab.
      Also, the insurance regulator mandates that two-third of surrender value needs to be utilized to purchase annuity plan.

      • Should I wait till completion of 5 th year. The pension plan is for 20 yrs. The minimum lock In period is three yrs, which is completed. I find no use of this policy. Returns are less. Kindly help me out of this.

    • Dear Jallakarthik,
      Marginal standing facility is a window for banks to borrow from Reserve Bank of India in emergency situation when inter-bank liquidity dries up completely. Banks borrow from the central bank by pledging government securities at a rate higher than the repo rate under liquidity adjustment facility or LAF in short.
      About other bank rates, kindly read: ‘What is CRR/SLR/Repo rate?’

  • Dear Srikanth,

    I am having 7.5 Lakhs with me and want to invest in Stocks & MF. Could you guide me 2 to 3 good stocks for long term investment more than 10 years for wealth creation. I choose 3 MF from your list suggested.
    1. Franklin India Prima Plus Growth
    2. ICICI Pru Balanced Fund
    3. UTI Mid cap fund
    I am planning to invest 4 lakhs in these MF and balance in stocks. Do you suggest me to invest lump sum or SIP. Provide me best strategic plan.

    • Dear Harinath,
      Kindly note that I do not offer suggestions on direct equities (shares).
      Selected funds are good ones. The fund manager of UTI midcap has quit UTI, so you may opt for Franklin Smaller companies fund or HDFC mid-cap opportunities fund.
      You can invest lump sum considering the current market conditions & your investment horizon.

      • Thank you Srikanth. I will choose another Fund Company HDFC Mid cap opportunities instead of Franklin Smaller Companies as I am investing in Franklin Prima Plus. Also I will invest in ICICI Balanced Fund.

        Thank you for your kind suggestion. So I will invest total 7.5 lakhs in lump sum in the said 3 funds.

  • Hi, I would like to know about superannuation , currently i work in a company were in i could make voluntary contribution to LIC group scheme towards superannuation. The same is not available in company i planned to join shortly.
    1. Can i make my contribution to LIC Group scheme directly, since new company doesnt have that option?
    2. Can i shift that to any other service provider other than LIC were in could continue my contribution directly?
    3.Or can i withdraw that amount?
    4, or hold on to it
    please advise.
    Raj

    • Dear Raj,
      If your new company do not have approved Super annuation fund, you may apply for withdrawal, but do note that there will be tax implications. Kindly check with your current employer or LIC for more details.

  • Hi Srikanth ,

    Let me take this opportunity to wish sucess in this great endeavour of en lighting all of us about financial intricacies .. Had a small query about how gratuaty is calculated in NGO , NPO or institutions

  • Hi sreekanth,

    I have no words to thanks for doing such a non profitable job you done.I salute you from both hands for your passion and effort .

    I am a salaried employees want to take a term plan please guide me. what are the points should i notice ?

  • Hi Sreekanth,
    I am new to investment; I am an NRI planning to return to India permanently after 2 months. aged 47 years, I currently saved about 50L INR, from this am looking for a monthly income of 20 to 25 thousand for house expenses and remaining I want to invest for 3 to 5 years. Currently I don’t have any financial goals. Kindly suggest me.
    Thank you very much.

  • Sir, i have e-filed of a trust. Actually i supposed to file ITR-7. Instead, i have filed in ITR-5. I am very trouble. How to rectify this error. Pls guide me sir.

  • Dear shreekant,
    Kindly advise whether it is better to take a Critical illness policy separately or should it be taken alongwith a term insurance? From some basic research which i did, the coverage in case of latter is limited. Kindly advise.

  • Hi Sree,
    do u know Bharti Axa,AegonLife selling online term plans to both non-earning persons?
    one of my friend(govt employe) purchased aegonlife,bharti axa joint life online term policy to him&to his wife(non-earning). company said to him that his income wil be shown to her wife and issued half of sum assur amount of him ex:50L to him 25L to his wife.
    now my question is
    it mis-seling of insurance against IRDA guidelines becaz basicaly term plan is for earning people to compensate financially his family in his absence?
    shall i advise him to withdraw policy from company?
    i’m very anxious to know? plz reply early

    • Dear naresh,
      If they have issued policy in the name of non-earning member, it would have been surely based on their underwriting rules & as per IRDA regulations only.
      Some Life insurance companies do issue term policies with low sum assured amount say less than Rs 25 Lakhs.
      Also, there are few join-life Term plans now available in the market.
      The point here is, insurance cover is not required for non-earning member. The husband can invest this premium in better investment avenues than buying a term plan in her name.

      • thnQ………………….4quick respons
        but Sree,

        my queries are
        1. will husb get sum asur amount if his wif demis?
        2. after mariage of women susb is legal heir without WILL . am i corect?
        3.aegonlife issued policy sum asurd for nonearning member(wife) more than rs.25L that is rs.36L and husb got sum asurd rs.78L
        4.and in the case of bharti axa policy sum asurd for nonearning member(wife) more than rs.25L that is rs.50L and husb got sum asurd rs.75L. morever it is offering accidental death benefit rider to no-earning person also.
        u cant believ this just checkout bharti axa&aegonlife for e-quotes and enter ur mob no. anonymously they wil definitly cal back u. u just ask for joint life policy&tel them ur anual income 4L & ur wif is no-earning. i am sure u wil get above said e-quote in ur email id within 5min

        • Dear naresh,
          1 – Yes. If the policy is issued, he will get the claim amount (based on claim settlement procedure/investigation)
          2 – I did not understand your point??
          Since they are join-life plans, I believe that they can issue policies.

          • hi sree,
            once again thnQQ…

            2. will husband be authorized person to receiv death benefits in case online term plans of her wife if her own mom&dad alive?
            becaz in some i read articles saying that

            can u coin this scenario nomination/legal heir in case of
            a.unmarried women b.unmarried men c.married man d.married women e.married widow as per indian law
            many people get confused “who wil be the owner of his/her assets after demise”

  • Can you please review whether Indiafirst Life guaranteedd pension plan is worth investing in? Secondly, if i am a self employed professional (Chartered Accountant) aged 42 and having other equity and debt investments…whether this producr shoukd form parr of my potfolio as part of strategic allocation of assets?

    • Dear Rishi,
      It is prudent to invest as much as possible in equity oriented options than investing in pension plans.
      The maturity proceeds are taxable & you have to compulsorily have to buy a annuity.
      So, better to avoid pension plans.

      • Thanks for your response. At the outset, I congratulate you for having a great website and a discussion forum and thank you for freely disseminating your knowledge. I am a CA and in my advising clients regarding financial planning, i come across many misconceptions and wrong notions. So your attempt at financial literacy is a great service to the society. Importantly, I also find your advice and suggestions to be sound and prudent.

        Regarding my query, I understand and agree that an equity based investment is good. However under the philosophy of strategic allocation of assets, it is advisable to have a judicious mix of various asset classes even if some asset classes give lesser returns than equity. In that context, this product appears to give a 9% guaranteed returns in the first few years. Do you think that it would be well to have such an asset in the portfolio alongwith other equity based instruments? Would appreciate your insight.

  • What is the way to take term insurance with HDFC. For the last two weeks I am behind HDFC personnel but they are not fast. Is there any other reliable sources to do.

    • Hi Sreekanth, need ur advice on a loan matter. I’m 42 years old who want to start a new business. I’m short of some money. My friend is willing to loan me the money. I’ve some queries: 1. Is it legal to borrow money through a PN.
      2. I want to borrow 45 lakh with a condition to pay back in 5 years. Is it possible through PN ? I heard PN validity is only 3 years.
      3. I want to pay some “courtesy amount” as interest though he is not demanding at all. Please advice.
      Thanks.

      • I checked the details in online and is in contact with HDFC life executive. Very slow in responding.

        Can you suggest the correct way.

  • Excellant article. I have started doing SIP from 4 months.
    1. MIRAE ASSET INDIA OPPORTUNITIES FUND –
    2.SBI Magnum MidCap Fund
    3.ICICI Prudential Focused Bluechip Equity Fund – G
    4.Franklin India Balanced Fund-G
    I am investing 5000/- in each monthly. want to invest for 15 yrs. What do you think. Should i change any fund.pls have a look and suggest

  • Mr.Sreekanth Reddy,

    I have a plot on Mysore Road – Kengeri hobli Panchayat limits in Challagatta Village, Actually i bought it in 2006 it’s a Panchayat approved Layout. I have manual katha and paying tax also, but recently i heard that without e katha we cannot sell it. is it true, shall i do it now, when i contacted the panchayat people they said it can not, they are not giving the proper answer. what shall i do now, pl. advice me. email:[email protected] 95028833**.

    Thank u

  • DEAR SREEKANTH,

    EXCELLENT KNOWLEDGE, GOOD WAY OF EXPLAINING, BEST FREE SERVICE. HAPPY TO HAVE A YOUNG PERSON LIKE YOU. KEEP UP YOUR GOOD JOB. ALL OUR BEST WISHES TO YOU.

    MY SON IS PLANNING TO INVEST IN DEMAT – AIMING TO USE RGESS FOR TAX – DO YOU HAVE SUGGESTIONS ON THIS

  • Hello Srikanth,

    Can you please explain in detail about the Exide Life Star Saver insurance plan? Is it good to invest in it?

  • Dear Sreekanth,
    I have been watching your articles for past 3 months, it is very informative & appreciate.
    i have been investing SIP from last year in HDFC prudence, UTI midcap, Birla frontline equity,
    Franklin high growth companies & Reliance top 200. All are growth option & long term 5~7years.
    As we all aware, the market is going down now. in this juncture, which equity fund do you
    recomment to purchase for lumpsum example rs.50,000.
    Plz advice

  • Dear expert, I have purchased the bunglow in May, 2012 in the ongoing project from the builder at Malvan, Maharashtra.In the same month ie May 2012, with builder I have executed the sathe karar (Agreement to Sale) on my name (Sole Owner).
    I have already paid complete stamp duty & registration during sathe karar (ie on May 2012)at malvan Tahasil Office.
    Now the bunglow is ready and we are going for the sale deed.

    Please help me clarify, can I include my Father & Mother as a co owners in the sale deed? (their names are not there in the agreement to sale).

    • Hi Srikanth,

      Thanks ton for your valuable service!

      This is Kathiravan from Chennai 37 years old, I am planning for Term policy for 39 years, here i shortlisted AEGON life iterm and HDFC Life (clik 2 protect) , My question is during my living period the companies has been closed in the sense what will be the process, IRDA will be transferred my policy to other companies or again i have to take the term policy fresh from other company.

      2 question is if any risk after me, the company has been closed and nobody ready to take the company that time IRDA will come and pay the settlement amount?

      For ex: natural disasters happen, 1000 peoples has been dead, that time the company does not have the amount to settle the amount and closed. what will be the next step IRDA will settle the amount to the policy holder?

      Please help answer me what is the role of IRDA here.

      • I shortlisted AEGON life iterm and HDFC Life (clik 2 protect) , which one is your choice in term of care.

      • Dear Kathiravan,
        Very good and valid question.

        Insurance industry is a very well regulated one in India.
        The solvency ratio or margin could ensure that the insurance company won’t go bankrupted. The solvency margin refers to the excess amount of assets that an insurance company must maintain over its liabilities. Also, Companies are required to keep the customers’ accumulated premiums very strictly separated from the company’s own assets, liabilities and expenses.

        While forming an insurance company comes with numerous restrictions, winding it up is not an option. The Insurance Act states that in case an insurer cannot continue business sustainably, it must merge with another company. The insurer cannot hope to run away leaving its customers in the lurch.
        Realistically, what all this means is that insurance companies never go bankrupt; if they do badly, they are typically bought up by a competitor long before things get that bad.

        • Thanks Sri!
          My real concern is almost shorted out,
          I need few more clarification :),

          1) Since I planned for Ageon Life because of term annual premium is very low, your choice is HDFC Life. Here when we go for a Private insurance company what are all the things we have to look for choosing the company, Ageon for 7500000 Premium amount is 11643 when comparing HDFC around 15K Please advise how to chose the better one. Is that security wise Ageon is better company?
          2) Why the premium is much lower in Ageon, can we trust for long term? :)

  • Sir i have taken mediclaim policy from new india assurance on my family( self + wife + son ) since last 5 years. this policy is individual. now i want to convert this policy in to floater. but i m confused between individual and floater, so please send the comparison of above both option and which is better among them and why.

  • Dear Mr. Reddy,

    I have invested a lumpsum amount of Rs 5 lakh in HDFC Prudence Balance Fund, and there is is also a SWP of
    Rs 5000 per month and from this amount I have invested in SIP in ELSS funds i.e.
    Axis long term Equity – 2000p.m.
    Birla 96 tax relief – 2000 p.m.
    Sbi magnum Tax Gain- 1000p.m.
    Is my portfolio is right or should I stop the SWP..?
    Thanx in advance.

  • Hi Sreekanth,

    I am an NRI planning to return to india after few years. Currently saved about 1Cr INR and I am planning to FD this amount in NRE account for about 10years with monthly payout option. I am actually looking for a monthly income out of what i have saved till now. Is this a good idea to invest such huge amount in FD’s. Is there any better option which fetches me monthly income on this amount.

  • Thanks for your informative post Sreekanth. I have a special situation – I stay in an apartment which is solely owned by my wife. She is a working professional and she had purchased the property before our marriage. I had taken a housing loan in 2015 for an apartment which is under construction – since I don’t have a self occupied property at the moment, can I claim HRA benefits by paying rent to my wife? If this is possible, what are the tax implications on my wife? She is still servicing the home loan for her apartment.

  • Dear Sreekanth,

    I have a house loan from 10 years and I am claiming tax deduction for the interest paid on the same each financial year.

    2 months back I have started constructing another home and for which I have another home loan. In this case, Please clarify me whether I can opt for both the interest paid for tax deductions.

    I understand that 2nd loan there will not be any limit on the interest part for claiming tax deduction, I mean I can claim more than 2 Lakhs? Is this correct? If correct, which should be self occupied.

    The one which I cam staying can claim more interest than 2 lakhs, or the one which I have availed newly?

    Please clarify.

    Thanks & Regards,
    Surya.

    • Dear Surya,
      If you consider the second property (new one) as ‘Let-out’ one then you can claim full interest payments as tax deductions under section 24.
      You have the option to select. Suggest you to select based on the home loan outstanding amount.
      But if you are residing in the old property then you have to consider it as SOP, reason being if you let-out new one, the prospective tenants would be claiming HRAs.

      • Thanks Sreekanth.

        Also, the new property land I have purchased land in 2011 Mar by taking plot loan during that time. It was fully closed in 2013 Dec.

        Now, I wil be finishing my new house by June 2016, In this case can I claim interest I have paid for plot also starting next financial year? I think it can be claimed in 5 years after construction of the house… Is this correct?

        Thanks & Regards,
        Surya.

  • Hi sreekanth,
    I m thinking about opening demat account.
    I m not willing to intraday trading. I wish to stock investment for long duration.so what are the option.

  • Dear Srikanth,
    My age at 42, I want to invest in mutual funds for 5years perspective
    Right now I bought Axis Long Term ELSS Fund
    what funds are too good for my portfolio please suggest me.
    and also i bought
    SBI-100……221.71
    Bharti airtel-50……330.24
    BHEL-100 ……..155.46
    AXIS BANK-50 ……442.90
    ICICI- 50 ……426.04
    SUNPHARMA -20….805.45
    TATA MOTARS-25….348.30
    recently can average now or….
    venkat

  • HI SREEKANTH,
    I am a student aged 24 years. I got 15 lacs from my father which he gave me after his retirement in 2014. My father was working in public sector bank. I invested the sum in bank FD, MF (equity and debt) and purchased share also. As of now i did not redeemed any MF neither I sold any share. As of now i am not earning by myself. Want to know that Do i have to pay tax and if yes how to calculate it. Please explain in detail.
    THANKS IN ADVANCE 🙂

      • Dear sreekanth,
        Total expected writtern from FD would be around 30000.
        To save TDS i have submitted 15 g/h from to bank. I read In one of your article that if you have more than 2 lacs in mf or 1lac or above in share and if you don’t file ITR then You may get income tax notice. Due to this only I am little worried.

        • Dear MAAZ,
          If your investments and your income do not match (not proportinate) you may get ‘compliance notice’ from the IT dept.
          For example : If one invests Rs 2 Lakh in MFs then his/her total income can be easily more than Rs 2.5 Lakh p.a, hence he/she has to file ITR.

          • Dear Sreekanth,
            You know the complete scenario now. So what should i do particular to my situation. If i am not liable to pay tax how can i file ITR to avoid the above situation.

  • hi sHREEKANTH,
    when i am trying to transfer online with the procedure mentioned by you,i am getting the error as your request has already been taken,but when i wnat to check status there are no requestes there.what is the solution for this.
    Also,if i want to transfer my pf throgh current employer attestation,do i need to first correct the information (father’s namein this case) with the previous EPFO office.

    Regards,
    Anupam

    • Dear anupam,
      Did you previously submit any request?
      You can submit ‘name correction request’ to your current employer and they will then forward the request to EPFO office.
      You need to give ‘joint declaration by self & employer’. You need to give the copy of identity proof which has a correct name.

  • Dear Sir

    I am planning for higher studies in 15 months.Which MF scheme suits my profile so that I have a decent return ?I can invest approx 10,000 per month.

  • sir,
    actualy i wish take term plan to me&my wife in this month
    i consulted customer executive on phone of bharathi AXA for online term life “eprotect” plan
    she said
    company provide TERM PLAN WITH ACCIDENT DEATH to both me(salaried employe) & to my wife(housewif)
    company provide this plan to my wife on my income proof for half of sum assurd saying that min sum assured is rs.50,00,000/-
    suppose my policy 75L with accident death rider rs.20L then they offer my wife rs.50L with accident death rider rs.10L.
    i verfid their company brochur “eprotect” in that anywhere it is not mentioned about accidental death rider but she said newly they launched rider to online term plan
    shall i buy it becaz it’s all confused
    as per IRDA guidlines every company whenver any changes made in plan they should update in brochur & take approval of IRDA . am i correct?
    which policy is suitable to me & my wife?
    plz suggest
    thanQ

  • hi Srikanth reddy

    thanks for your all info. very much useful.
    i m 30 yr old. i m already planned for elss.

    also i would like to invest in tata balance fund. I cant afford much risk. can you suggest me which plan suits me .

    Regular Plan (Routed through Distributor)

    – Growth
    – Dividend
    – Monthly Dividend

    Direct Plan (w.e.f. 1st Jan 2013)

    – Growth
    – Dividend
    – Monthly Dividend

    As there are this many options kindly let me know which is suitable for me

    Thank you for your time and help.

    • Dear Rakesh,
      Considering your age, for your long term goals you got to take risk 🙂
      Not taking risk itself is the biggest RISK of all.
      You can select ‘Growth’ option.
      If you are comfortable in picking good MF schemes and invest in them by yourself then you can opt for ‘Direct plans’ of MF scheme. Else, choose ‘Regular plans’ through online platforms like fundsindia/Zipsip/ICICIdirect etc or through MF Advisors.

      Read:
      MFUtility online platform for MF investments.
      Regular Plans Vs Direct plans of mutual funds.

      • Dear Srikanth

        Thank you very much for your valuable inputs .

        For my short term and medium term goals I want to invest in Birla sun life mip wealth 25, But i dont have corpus to invest in this as lumpsum amount. I can invest in this fund through sips.

        What if invested in birla sunlife mip wealth 25 saving scheme by sips. Had it given better returns via sips in past?

        Thank you for your time and help.

        Regards,
        Rakesh

          • Hi Srikanth

            Thank you very much.

            I could see three options in money contol, birla sun life mip (g) 25 – .

            Birla sun life mip growth 25 MD,
            Birla sun life mip growth 25 mip, I could not get what is md and mip , can you please let me know.

            which one is suitable for short term returns and tax

            Thank you once again.

            Regards,
            Rakesh

    • Hi..
      Term plans help to ensure ones family’s financial independence in the event of unfortunate demise of the earning member or bread-winner of the family. There won’t any maturity benefit.
      These are available at extremely competitive rates when compared to traditional plans like endowment or money-back plans.
      Read:
      Best Term plans.
      Kindly note that if one has no dependents/financial obligations, life cover is not required.

  • Hi Sreekanth,

    How are you…
    This is Badria, from Nandyala (your school cricket mate).

    I am very happy to see you are very helpful to so many people. Keep up your good work.

    Thought of quick connect with you, can you drop me an email with your mobile number.

    Thanks
    Badria.

  • I have purchased resale flat on 31 march 2015 with my and spouse name. I have taken Home loan from SBI and arranged some money to purchase it. This flat is originally constructed around 2005 . I want to know can i withdraw money from my PF account for Repairs/Alteration of Existing House. I want to alter my flat.So i need this money.And if yes what are documents required. I really appreciate your help in this forum.

      • Thanks Srikanth for your quick reply. I have gone through guidelines but have some confusion. Since my Deed executed on 30 March 2015. And as per provision House/Flat should be 5 year old. So do i also need any original document from builder when he has given possession originally to someone around for 2005.

  • Hi,
    I have two properties and for both i have taken loans.so my queries are
    1.Can i show both interest amount under section 24?
    2.My one property suppose to get in Feb.2016, so can I show interest amount under section24?

    Regards,
    Bhushan

  • Dear shashidhar,
    Insurance is required if one has dependents /financial obligations/financial liabilities to cover.
    Kindly check again if your son/parents/wife really require life insurance?
    Do you & your family have health insurance cover?
    Kindly provide more details about yourself & your family members profiles?? (age/occupation/financial goals)

    At the moment i’m only the person working.
    My parents age falls in to 55-65(agriculture) , – retirement purpose
    spouse -24, student. future security
    son-1 yr education and settlement.

  • Dear Mr Reddy, I want to invest 1 lakh for 10 years in Mutual fund ,then I want to know which Mutual Fund scheme give me high returns and low risk ?

  • Dear Mr.Srikanth,

    We are having a Private Limited Company with 4 directors. Due to non-cooperation from our other Directors, we had a tough situation to go for Private Finance. We borrowed unsecured business loan (short term 4 months with 8 installments) from the Private Finance . We issued Promissory note in Company’s name with 8 Company cheques for Installments, two guarantee cheques along with one my personal cheque.
    We paid 50% of the loan. But now the company’s situation is financially not good incurred heavy lossess. Our other Directors also not supporting the Company. I am in the deep trouble. There is no other alternate for me. I am going to declare Insolvency.

    Please let me know, there will be any legal issues will come to me personally.

    Please keep this confidential and send your suggesstions to my email address.

  • Hello Mr.Sreekanth,

    Thanks And appreciate for educating financial planning seekers.

    Firstly, i’m planning to take three policies for my son, my parents and my wife.

    What are the options available. which is gives good returns and life cover (death & accidental benefits.).

    ready to buy worth of 1,00,000 a year.

    looking for long term plans For my son education and his settlement. Minimum paying term, maturity term, returns.

    THanks in Advance,

    Regards,
    Shashidhar Reddy.

    • Dear shashidhar,
      Insurance is required if one has dependents /financial obligations/financial liabilities to cover.
      Kindly check again if your son/parents/wife really require life insurance?
      Do you & your family have health insurance cover?
      Kindly provide more details about yourself & your family members profiles?? (age/occupation/financial goals)

  • Dear Sreekanth,
    GREETINGS!

    Yesterday, I did send you two queries for your comments. I am still waiting for your replies.

    Dr. N. SESHADRI NATH

  • hello sir, i had a query. my husband lives in a self occupied property in mumbai. he pays an annual emi of 27 lakhs of which he avails of a two lakh benefit. therefore he incurs a loss of benefit on the 25 lakhs per year. almost 62500 a month. can you kindly suggest some methods to reduce this figure?

  • Hi Sreekanth,
    I have 4 LIC policies, (1:Endoenment & 3:Jeevan Anand), In year 2014 I took 1,75,000/- loan from all the 4 policies. I never repaid the principle nor the interest to LIC, I am thinking by the end of maturity They may deduct this amount and give the rest of the amount to me… So am I right? Or Do i need to repay the loan amount?

    Regards,
    Vinayak

  • Dear srikanth
    Is there any provision in this 2015-2016 FY to invest in tax savings bonds over and above 80c limit of 1,50,0 00.

  • Hello Sreekanth,

    Your blog is very informative. You are doing a really good job!!

    Recently, I was converted from trainee to Engineer with a hike in my salary. Now I am a tax payable employee. I get 24000 in hand with TDS of approx 1200 per month. I have an RD for 15000 per month. I heard we can reduce TDS by investing Mutual funds/RDs/FDs. Is that true? Please tell me which is the best to way to reduce my TDS. Also please tell me, what Income tax returns should I file? Are there any other forms that I have to fill. For information, my salary is the only source of income.

    Thanks in advance.

  • Hello Sreekanth,

    Please advise whether I should surrender or continue with these policies. At the time of purchasing the policies, of course the sales illustration had painted a rosy picture however

    Policy 1
    Jeevan Saral
    Monthly Premium – Rs 2042/-
    Tenure *25 Years
    Sum Assured – Rs 500000/-
    Policy Commencement Date – Sep 2009
    End Goal – Child’s Education Expenses

    Policy 2
    Jeevan Saral
    Monthly Premium – Rs 2042/-
    Tenure **35 Years
    Sum Assured – Rs 500000/-
    Policy Commencement Date – Sep 2009
    End Goal – Retirement Planning

    My current Age is 33 Years.

    Regards
    Kairav

    • Also advise what should be the amount I should expect

      1. 30% of Sum Assured (10 Lakhs)
      OR
      2. 30% of Premium Paid (Roughly Rs. 2,57,040)

      • Dear Kairav,
        In case of regular premium policy generally Guaranteed Surrender value of Lic policy is 30% of the basic premiums paid. Also, the company excludes the first year’s premium while calculating surrender value. Kindly contact your agent for exact SV amounts.
        Suggest you to surrender both the policies and re-invest the SV amount + premiums saved in equity mutual funds.
        Also, if you do not have adequate life cover then buy a term plan.
        Read : Best Term insurance plans.

        • What is the returns I should expect including Bonus from LIC policies vs returns from Equity Linked MFs?

          • Dear Kairav,
            One should not invest in life insurance policies to get returns. Insurance is meant for protection / risk cover.
            ELSS or equity oriented funds are for long-term goals. The returns are not guaranteed but they are one of the best investment avenues that we have to achieve long term goals / wealth accumulation.

  • Dear Sreekanth,

    At this point of time what would you recommend investing in ?
    around 60 lakhs in FD with interest monthly or buying a property and taking rent as the income ?

  • Hi Sreekanth,
    I have a general question on bonus addition in LIC policies. The bonus declaration from LIC was done in Aug 2015 for the previous year.
    When (date) does the yearly bonus of Jeevan Anand gets added to the policyholder’s previously vested interest in a year?

    Thanks,
    Pradeep

  • Dear srikanth sir i had asked u a question sir but i didnt got any reply from u i had opened aa APY account recently for monthly can i convert it into halfyearly and is there any allowance to close the account after 10years ……………
    thanking you

  • dear sreekanth
    plz tel solution for following
    1.a person name “X” got term insurance rs.20lakh during policy tenure if he robbed&killed by thief, then will nominee get sum assured 25lak?
    2.if “X” included his wife in joint life term insurance(eg.bajaj allianz offering inclusion of wife) then wife of “X” died during pregnancy due to some jaundice or any other disease(in policy tenure of his husband), will “X”get sum assured amount?
    3.what r dif typs of accidental & other deaths included in term life insurence in order to claim death benefits to nominee without any hurdles?
    it is important to know before taking policy becaz now a days after death of person so many life insurance companies rejecting death claim simply showing different logics/tactics which r not informed to life insured before taking policy not even mentioning in sales policy brochure & policy document which ultimately results
    laments to nominee.
    last but no least
    4.where do we get case laws 0r judgements made by IRDA against rejected claims by insurance companies during 2011 to 2015 in detail?
    ur answer wil be v helpful to all those people who are fooled by lif insur companies. please advise early….

    • Dear Naresh,
      1 – Yes (but after thorough investigation).
      2 – Yes.
      3 – Generally claims arising out of terrorist attacks or earthquakes may not be covered by LI companies under term plans. But one needs to check with the company about this before taking a term plan. Besides this as long as the policyholder discloses complete information honestly in the proposal form, I believe there wont be any hurdles while claim settlement (if any).
      4 – I do not have any such information as of now. We only have claim settlement ratio details.You may search for IRDA annual reports for more information.

  • Sir,
    Financial Year 2015-2016 income up to Rs.2,50,000/- not taxable. savings under sect 80C is allowable up to Rs.150,000/- Pl suggest where can I invest remaining Rs.1,00,000/- to get the benefit of Rs.250,000/- slab.

    m.gopi

  • Hi Sreekanth,

    I need your help in deciding what Tax Saving Scheme to take on to be exempted from taxes.
    I am currently earning 5L p.a., and can put aside about 3k per month towards premiums, therefore, can you advice me to a good tax saving scheme that meets this? I am 34 yrs old, female.

    What would you suggest?

      • Hi Sreekanth,

        Thank you for your reply.

        Yes, I do have dependants who are not working. Moreover, my company does provide for me insurance, so I’m looking more for a tax exemptive scheme that will also give me good returns but doesn’t have too high a premium each month.

          • Dear Sir,

            I should thank you for your guidance from time to time.

            Please let me guide as under;

            1.While making investment in ELSS in any of top six mutual funds as demarked by you which fund may give high return

            (a) whose NAV is high (b) whose NAV is low

            2.In postal deposit which term deposit other than NSC may give benefit under 80c

            3.In which Bank higher interest rate in term deposit exclusively for taking benefit under 80c is available.

            4.Is Bank may allow to open Tax Saving term deposit if there is no account is not existing in the said Bank but KYC formalities has

            completed

            Expecting your valuable guidance,
            —
            DEBASISH MITRA
            14 NETAJI SUBHASH AVENUE
            P O SERAMPORE PIN 7122

            • Dear DEBASISH,
              1 – We can not predict the future performances. We can only expect decent returns from them in longer period. High & low NAV does not matter, it is the % of returns which matters. “Buying units of a low NAV fund can give better returns” – This is a myth and misconception.
              2 – Post office term deposit 5 years one, Senior citizens Savings Scheme & PPF.
              3 & 4 – It is advisable not to invest in Bank FDs for long-term and that too to just save some taxes.
              Read : Why one should avoid long term FDs/RDs?

  • Hi Sreekanth,

    I am new to this side of investment. Now I have plan to start with SIP. Please advise me how to go about it. I have a plan to start with Rs. 5000
    Thanks

  • Hi Sreekanth,

    You are doing a splendid job by clarifying the doubts of a novice financial planner.

    Have one question on will vs nomination, which one takes priority.

    For example, if anybody mentions his wife as nominee for an investment or insurance policy, and would like the amount to be shared with his parents as well, in many cases we don’t have the facility to mention more than one nominee. in such case, how to specify it legally? though his wife is the nominee, if he wants some share of the amount to be paid to his parents as well.

    Can we mention the nominee as wife and write a will as it to be shared between those couple of people?

    please share your input on this.

    • Dear krishna,
      You can have multiple or successive nominations.
      While multiple nomination means that the sum assured will be divided among several nominees, successive nomination implies that the claim money will be first paid to NOMINEE A, failing him the insurer will pay to NOMINEE B and so on…

  • Hi Sreekanth,

    Could you please suggest which is a good Term Insurance for Non-Working women? If there are not any (which is good) what is the work around to cover non-working women (housewives)? Please suggest. Thanks!

    • Dear Aman,
      Life insurance may not be required for non-working individuals, moreover LI company may not issue a term plan (especially if sum assured is high value amount).
      You may get them adequate health insurance coverage.

  • Hi Sree,

    First of all wihsing you a very happy & successful new year..:-)

    I have been following your Blogs from a long time and it has helped me a lot in understanding about investments and planning,..,
    I have few doubt after reviewing your Blogs.
    1-As per my understanding investing in MF through lumpsum is more profitable than investing through SIP, as you can put your money in market whenever market falls. This is also one of your thought i read in your blogs.
    2-If your answer to the above question is NO, then please explain why?

    Thanks in Advance..!

    Prateek

    • Dear Prateek,
      Happy New year 🙂
      1 – Yes. But one needs to have time & interest to track the financial markets. Also, it is tough to time the markets. It is just a suggestion to invest lump sum amount whenever market falls. Say if market falls by 500 points today, I invest in MFs manually, but may not wait for tomorrow thinking that market may fall more tomorrow. If market falls more again tomorrow, if I have investible surplus then i do not mind investing again in the same funds.

  • Hi ,

    I worked with my previous organisation during the period 3rd May 2010 – 10th April 2015 and joined another company without transferring the PF from previous company. I have to get almost 7 lakhs as my PF . If I withdraw the PF amount now , do i have to pay TDS? I had cmplated 5 years in the previous organisation. Please answer.

    Thanks

  • Hi Sreekanth,

    My name is Deepak aged 32 years, married with 1 daughter of age 3.5 years.
    I want to save around Rs.10,000(+-2000) per month for my daughter’s future expenses.
    I idea I have in mind is like this.

    5k in Sukanya Samrudhi scheme
    5k in SIP

    Can you please help me in finding the best funds for SIP(my target is for a minimum of 10 years, if everything goes fine).
    I have read your TOP 15 best equity mutual funds for 2015 and 2016.
    I have confusion on which funds to select.
    Do you think this will work out.
    2 large cap + 2 diversified/multi cap + 2 small/mid cap for Rs.1000 each.

    Please let me know.

    Thanks,
    Deepak

  • Dear Sir,

    I had filed ITR for AY 2014-15 for which I received a demand notice in July 2015. I filed a rectification request. But no reply for 5 months. Is there an address in Bengaluru to which I can go and explain my case to the authorities? So that the issue is clarified

  • Dear Sreekanth,

    I have the following investments. Can you please suggest me if I can continue the same or close it and shift it to some other good funds where I can get better return as there is no appreciation in this.

    1) ICICI Prudential Life State Assure (Flexi Growth and Protector Fund) – Rs.20,000/- per year since 2009 – term period 10 years.

    2) ICICI Prudential Wealth Sp. (Mc Growth Fund, Income Fund and Money Market Fund) – One time amount of Rs.50,000/- made during 2010 for 10 years).

    Thanks

    H.R. Krishnan

  • Hi Sree,

    Under what type of category below funds falls. I was not able to classify them under debt ultra short/short/gilt..
    Birla Sun Life Dynamic Bond Fund
    SBI corporate bond

    Some of my FDs (3L) are expiring . I am looking for funds where I can park this money. My requirement is full security of principal amount, time frame is 2-3 years and do not want hybrid debt fund. Please suggest me…

  • Hi Sreekanth,

    Good and useful posts from your blog. Good Work and continue the same.

    I recently bought a BDA site (Property) with Bank (as Home loan), three months ago but have not started construction plans yet.

    I received Interest Certificate from Bank for 80 C and 24 B sections for IT submission.

    Please let me know whether I am eligible for claiming deductions under both sections [80 C and 24b], since it is still a plot with no construction.

    If yes I think I can claim upto 1.5 lakhs in 80 C and what will be eligible limit for section 24b.

    I am also staying in Rented home. Let me know if both HRA (13a) and Principle\Interest of Home loan (80C and 24b) can be claimed for deductions for a financial year.

    Please help on these queries.

    Regards,
    Ashwini J

  • Dear Sreekanth,
    At the age of 52 I want to enter the world of mutual funds! What do you advice for SIP –
    1) 5 or 10 years?
    2) Amount?
    3) No.s of MFs?
    4) name of the MFs
    Thanks & regards,

  • I have a doubt Investing in Mutual Fund.I had Purchased a Land for 2.5 Lakhs in the year 2007 and had sold in the year 2015 for 35 Lakhs.My Long term capital gain is around 30 Lakhs and after Indexation it is around 6 Lakhs ,which i had to Pay as Income tax.I require solutions for 3 Questions 1st question.Is it advisable to Purchase NHAI/REC Capital Bonds for 30 lakhs , hold it for 3 years and then invest in Mutual Funds for next 4 years . whether i had to pay the Income tax for the 6 % Interest. 2nd question .is it advisable to pay tax for 6 Lakhs ,then put all the 30 Lakhs in 5 or 6 Mutual funds (Equity Open Ended Fund) for 7 years.3 rd question.is it advisable to take the Interest from Capital Bond and pay the SIP for 15000/month for 7 years.Kindly advice me which is better at this Present Market Situation and which option will yield me good profit.

        • Yes Mr.Sreekanth,

          I had received 30 Lakhs in White and 5 lakhs in Black and the registered value of the transaction is 35 lakhs(Including White & Black).

          If the interest earned on the bonds is fully taxable under the head ‘income from other sources’, as the Property is sold in the name of my Wife and Moreover as she is House Wife shall i submit a Form -16 and exempt her from Paying Tax as the Total Income will come below 2.5 Lakhs(ie., Interest earned per Year 16000 * 12).

          After sale,I had given the Brokerage of around 2 Lakhs in White(Cheque issued), but the Broker doesn’t have any office.Shall i include in expenses and take advantage in reducing capital gain.

          regards,

          Raj.

          • Dear Raj,
            So, entire Rs 35 lakhs is considered as white transaction as the property is registered for Rs 35 lakh.
            Yes, you can include the brokerage expenses while calculating the Capital gain Taxes.

  • Hi Sreekanth

    What is your opinion about “Dematerialisation of Insurance Policy Documents”?

    Thank you

    Parag Dabir

  • Sir
    I am planning to invest 3000 / month in MF.Plz suggest me the funds.My age is 32 & time horizon is about 10-15 yrs.

  • Resp. Mr. Reddy,

    I had bought a piece of land in Gurgaon in resale. The plot was purchased for rs. 10 lakhs and HUDA issued a transfer letter/re-allotment letter in my name. Since some future instalments were due at that time, I paid the balance amount of rs. 10 lakhs in 2014. r

    I got the conveyance deed regd.in my name and constructed house on the plot in 2015 with an investment of Rs. 45 lakhs. I got completion certificate of completion in May 2015. I sold the house for Rs. 1.10 crore in 2015.

    Pl. advise my tax liability. Will I have to pay short term capital gain, though I had purchased plot in 2010?
    Also advise me as to how to save on capital gain.

    regards,

    P Shanker

  • Hi shree

    I am planning to invest 30 lakhs in mutual fund (a lumsum amount) ,I also want to generate monthly income from it by opting for SWP.

    My finacial adviser advised me
    1.DSP BLACK ROCK MICRO CAP FUND
    2.SUNDRAM SELECT MID CAP FUND

    these two funds for 15 lakhs each, which will also give me a return of rs 30000 on montly basis.

    I am willing to invest for long term ,lets say 5-8 years or even more. He told me doesn’t matter what ever up down the market will face my swp for rs 30000 is safe and I will get the same amount every month.

    Is this investment safe and a good option. please hepl

    • Dear jasmeet,
      Is your financial advisor informing you that these funds will surely generate Rs 30,000 pm return/income?
      If your time-horizon is say 8 years, do not opt for SWP, instead just invest in Growth option and keep tracking your portfolio.

      • yes Sreekanth , He said that you can opt for a maximum of 10 to 12% annually of your investment . He also told me that if you will start the SWP instantly there will be a deduction of 1% i.e (3000 in case of 30k) and income generated from the first year will be taxable at a ratio of flat 15%.But if I start the SWP after one year there will be no deduction and income will be tax free.

        I have already invested a toatal of about 10 lakhs in growth option in 2011 and some in 2013. Whoes current value as on date is 11.20 lacs.

        I am intrested in generating a second income with this investment which will be tax free after One year.

        He also explained me this with an example which is like , I are buying a propety for 30 laks which will give you a tax free rental income for Rs 30000 per month(after 1 year). And value of your property will also appericiate with time and you can keep a check on that by eyeing the portfolio.

        Please suggest. Will my principle amount be safe, and what do you say from the funds he suggested me.

        Thanks
        jasmeet

            • Dear Jasmeet,
              As suggested earlier,
              If your time-horizon is say 8 years, do not opt for SWP, instead just invest in Growth option and keep tracking your portfolio.
              It is not advisable to invest in mid-cap funds and then have SWP, in case if you are looking for safe & periodic income/returns.

  • Hi Sreekanth, I find this site very useful. I want to seek your advise if any of the term insurances cover me, if I am staying in Africa (Kenya). Especially, if any mishap happens to me in Africa, do the insurance company pays fully? I am an Indian passport holder and currently on work permit staying since last four years.

    • Dear Sid,
      You can apply for a term plan as an NRI (assuming you are an NRI) & risk cover is applicable even if you are in Kenya.
      But life insurance company may or many not issue term plan based on their terms&conditions after going through your proposal form.

  • Sir,
    Finding your answers very helpful for various IT related questions. Thank you and well appreciated.
    Could you please advise if we still can e-file a zero-tax return for FY 2013-14 (AY 2014-15) as the Total (and only) Income earned from Bank deposits in that year was less than 2.5 lakhs, not in any employment and hence no Form-16? If we can efile, till when we can efile without any penalty?

    Thank you,
    -Venuscold

    • Dear Venuscold,
      You can always file your income tax return (before receiving any notice from the department) within 2 years from the end of the financial year of which return is required to be filed by you.
      You may be charged a penalty of Rs 5,000 if you file your income tax return after the expiry of one year of the financial year for which you are filing your income tax return. (No penalty charges till Mar 2015, in your case).

  • Thank you Mr.Sreekanth for your prompt reply.The money received by my wife is not donated by me but her share as per the family settlement.She also received Rs 1 lakh from daughter for meeting personal expenses.Since this will be treated as gift from close relation, hope this will not be liable for tax and interest earned on investing this amount will not be clubbed with my income but treated as my wife’s income.Shall be grateful, if these points also are clarified

  • Dear Sreekanth sir

    My name sombabu,3 months back my mother received income tax notice u/s 142(1) (CASS)submission of information called for during scrutiny proceeding for ass.year 2014-2015, my father with CA person attended infront of income tax officer. he told that we have received some amount from foreign 2013-14 for the act of 94A ,for that he asked all bank account statements,they are not shared bank details or account numbers, but we don’t have friends or relatives in foreign.we didn’t done any foreign transactions in our accounts.why they send that notice we don’t know.last hearing I also attended. we submitted all bank account statements of 2013-14. the officer and CA person are telling that there is a chance to some other people misused our pan card. in our knowledge didn’t give our pan no to any one. my father and mother both are worked as agents in agri gold ,for that only they taken pan card 8 years back.now the Agrigold in court case.

    why they send the notice?

    If somebody misused our pan card means what we do ?

    When they will give clarification for issue?

    We are lower middle class family.for this issue I was mentally disturbed.

    Please give me your valuable advice sir.

    • Dear Sombabu,
      I can understand your situation. Misuse of PAN numbers is rampant these days.
      As the amount is not credited in your bank account, there wont be any issue. But unfortunately you have to go through this pain.
      Kindly follow up this matter with your CA and get this sorted out at the earliest.

      Also, in future whenever you have to quote your PAN, kindly mention ‘to whom and for what purpose’ you are submitting PAN card copy or PAN card details. For example – for applying HDFC bank credit card. You may quote specific entity name, purpose, date and then sign the PAN copy, to avoid any mis-use.

      • Dear sir,
        we replied for that notice with help of CA person, we submitted all accounts statements and written submission of we are not done any international transaction in our account.
        my question are
        we are not done any transaction why the send the notice.
        is there any possibility by mistakenly they gave the notice
        what is the next step of IT Dept.if any mis use is there when they will call again.
        if account number holder name is different pan holder name is different how they consider.
        these questions are continuously circulating in my mind
        plz tell me sir

  • Hi,

    I would need money for my child’s education and marriage which is around 12 years from now. My current investments are following
    1)HDFC Top 200 fund (will complete 5 years in 2016). Should I renew this fund or move to any other large cap as this fund performance not good for last 2 years ? If so, what would be my replacement fund?

    2) ICICI prudential long term equity and AXIS long term equity (both ELSS) – 2000 rupees each for last 4 years

    I want to invest in 2 more funds along with above. Should I invest in Multi-cap funds or mid cap funds or balanced funds to balance my portfolio?
    Please advise.
    Thanks and Regards
    Ranga

  • I am a retired senior citizen having an annual income of less than 3 lakhs from interest on deposits, EPF pension etc and hence not liable to pay income tax.Of late my wife who is not employed but a senior citizen got some amounts by way o f family settlements after her mother’s death which she deposited in her name and the total annual of interest comes to about Rs 1.5lakhs.According to her the income from her investments cannot be clubbed Will her income be added to my income for the purpose of ascertaining my income tax liability.She has a separate pan no.earlier taken as she had rental income .She was not filing return because the rental income was less than the taxable limit.At present she has no rental income .Will be thankful for early clarification

  • dear srikanth,
    superb!!!! u hav knowldge in differnt field
    my query
    1)can v get rejected & accepted claim details of individuals of term insur & PA policy from insurance companies?
    becz at the time of unfortunat death/accident when v approach insur company behaves rudely & simply rejct claim.
    in order to safegurad our claim not rejected by company v should know company claim details but not graph of claim ratio or excel sheet kept in their company websit. am i correct?
    2)can v ask above said details by right to information act-2005?
    thQ

    • Dear anand,
      You can only get the no of claims accepted or rejected etc details in IRDA’s clam settlemnt report. Kindly note that this report will not give details as per type of insurance (ie money back / endowment / term insurance).
      2 – I am not sure about this. Let me check and get back to you.

  • I started sip from previous five year, my schemes are as under,
    Hdfc top 200, ICICI focused blue-chip equity, Birla sun life frontline equity, idfc premier equity,reliance equity opportunity.
    From Jan 2016 I decide to stop all the above scheme and restructure my portfolio as under please suggest
    Sbi blue chip direct plan Rs 4000/m
    Dsp br microcap fund. Rs 4000/m
    Sbi magnum multicap fund Rs 4000/m
    Reliance small cap fund lump sum amount from old fund
    Birla sun life frontline equity lump sum from old fund
    I want to review from Jan 2016, so please reply me as early as possible
    Thank you

  • Dear Sreekanth,

    I wish to track on a day-to-day basis on the NSE website as to how many a times a specific IPO issue is subscribed. To be specific, I wish to track as to many times the NHAI bonds issue is subscribed in the retail category. Based on this information I will decide whether I should apply or not.

    Would appreciate if you can provide the link to get this info on NSE website.

    Thanks in advance for your help.

    Regards

    Prakash

      • Dear Sreekanth,

        As I understand, at the end of each business day, this information is provided on the NSE web page. I distinctly remember seeing such info in the case of some other issue. I do not recall the link now. Hence this query.

        Regards

  • Dear Mr. Sreekanth,

    I had taken VRS during April 2015 and my company had settled my VRS, Gratuity and Leave Encashment dues which I have invested in SSSC thru ICICI Bank and Post Office MIS. However, I have not applied for my EPF and EPS as I have been told that I will get only reduced pension if I apply before completion of 58 years. Since I will be completing 58 years only in Feb 2016 I want to apply for the same after February 2016 and I will be getting around 30 lacs. Can you please suggest me the good investment avenues where I can get best tax efficient return and also my principal amount will be safe.

    Thanks and regards

    H. R. Krishnan

    • Dear Mr. KRISHNAN,
      Do you have any other source of income which can be used to meet your monthly living expenses?
      May I know more about your financial goal(s) if any??
      Do you have sufficient health cover?

      • Thanks for your reply. Yes I have health Insurance cover for myself, wife and daughter for Rs.3 lacs each in ICICI Lombard for the past 4 years. Apart from this I have a top up (not super top up as it is not available with them) for 8 lacs for myself and my wife. I have not taken the same for my daughter. Should I take one for her also. She is 19 years and is doing her graduation in Engineering. I can somehow manage my monthly living expenses. If I get some amount of monthly income additionally it will be better. My financial goal is to give education to my daughter and after that her marriage. Please give your suggestion.

        Thanks and regards,

        H. R. Krishnan

        • Dear Krishnan,
          You may consider buying a super top up plan for your daughter.
          Kindly read : Benefits of super top up plans.
          If your daughter is planning for higher studies, you have 3 years of time only. So, it is better you invest in safe investment avenues only.
          For her marriage expenses – You may invest in a balanced fund or aggressive MIP for say next 4 to 5 years.
          Kindly read:
          Best Balanced funds.
          Best MIP Funds.
          Best Debt funds.
          If higher education costs are high, suggest you to not to withdraw your retirement savings fully, you can go for education loan.

          • Dear Mr. Sreekanth,

            Can you please let me know if I can withdraw my EPF amount now and invest in MF or wait till the next financial year starts? Regarding EPS I think it is better to apply after completion of 58 years as only two months are left. Can you please suggest me the exact funds where I can invest my money and how much as you have more knowledge and I think it is better not to invest in Bank FD as the interest rate is less and also taxable. Please give your suggestions.

            Thanks and regards

            H.R. KRISHNAN

  • Dear sir,
    My spouse & me jointly own a house property which is given on rent, as one more house is owned by me alone n we are staying together there. In such situation :
    1) Can we both avail tax benefit on rented house.
    2) If yes, then what we need to do to to avail in 50:50 %.

  • Hi ,

    Thank u for the reply, but the bank says the enhancement of credit limit is possible only when my salary hike. So, can i take a add on card in my hubby’s name? am i going to get the same limit ? or what is the other option which i opt for?

    Thanking you,
    Parveen

  • Hello Sreekanth,
    Firstly, a wonderful help – Thanks:)
    My questions-
    -I was wondering even if an ewill is necessary. Can the will be on a plain white paper.
    – You mentioned in your blog that we must review the Will when we buy /sell the assets. Cant the WILL be worded in a way that it is always valid for all assets. This can be done by NOT naming assets specifically and using generalized statements instead?
    -How can we ensure that the WILL on the white paper is not null and void in the court of law?. Do you provide any help to review the WILL interms of its validity and language

    • Dear Sandeep,
      1 – Ewill is a facility and it is optional one. Yes,it can be written on a plain white paper.
      2 – Yes, Will can be generic in nature too (but it is better to list down all the existing assets / investments as much as possible).
      3 – You can get it registered.
      As of now, we do not render any paid services. You may take help from any online Will writing services company.
      Kindly read : Online WILL writing options.

  • Hi Srikanth

    Thank you very much for spreading the financial literacy. I want ot invest 25000/ per month through SIP in mutual funds expecting 15% returns. I need your help in identifying the right mutual funds around 3-4 for my financial goals..

    Let me know how I can reach you.

    Regards
    Ram

  • Can i get my name deleted from a joint SB account i hold with a family member in a nationalised bank? i have included a name to an individual account and made it a joint account, but can i delete and make a joint account to an individual account without closing the account. It is a EOR type of account. just want to make the other person operate the account by herself. Appreciate your input. Thanks.

      • Dear Shrikanth,

        Thank you so much for your quick response. The problem is though, one party is abroad and the other is old and does not want to deal with money matters. We will talk to the BM as you said. Thanks for your great service.

  • Hi,

    I have a credit card with 35000/- limit. Can i go for a additional card or apply a new card for enhancement of the credit limit?
    Please answer my question, as my card is based on salary what shall i do?

  • and also i wish to take joint personal accident policy to me(earning) & my wife(house-no earning).
    1. is there any company offer such policy?

    thankx in advance

  • sir
    i am state govt salaried employe 1.can i take online term joint insurance with no earning housewife as spouse ?
    2.could u guide i wish to insur pnb metlife mera term plan? does it offer joint life term insuranc?
    3.wat r diffrent online term insuran companies offer joint life online term?(wtih spouse as non earning member)

    my annual income 4lac-5lac
    my contact no 9032648110
    i live telangana state ,mahabubnagar district
    what is max sum asur limit

  • Hi Sreekanth,
    I have been one of those enlightened by many of your valuable blogs. Keep up the good work.
    I just want to know if its worthwhile to wait for new MCLR to come in April 2016 to take a home construction loan?
    I have time to wait if it will reduce my interest rate and I have good credentials to get a loan in SBI or other big banks.
    Kindly suggest.

    Thanks,
    Pradeep

    • Dear Pradeep,
      If you are planning to go for home loan in near future, it is better to take it now (before 31-Mar-2016) under base rate system.
      You can always have the option to switch to Marginal Cost of Lending Rate (MCLR) at a later point of time.
      Kindly note that MCLR can be beneficial in a falling rate scenario, where as Base rate system can be advantageous in an increasing rate scenario.

      • Hi Sreekanth,
        I understand the benefits of MCLR will be in falling rates scenario which we are in today.
        But when they start with MCLR in April 2016, the interest rates are expected to be lower than current rates, am I right?
        Also if I change from base rate to MCLR later, i may have to pay for it right?
        What are your thoughts?

        • Dear Pradeep,
          The key word is ‘expected’ here..RBI may not cut rates in near future considering current economic data.
          Regarding ‘switch’ charges, we may have to wait for some more time to get complete and right picture.

  • I am having a housing loan along with my wife. As per the housing loan bank (income tac certificate) principal is 41K and Interest is 2.18L.

    Can i declare ZERO for principal amount as it comes under 80C as I have already enough policies for 1.50 Lakh for 80C. So that my wife can declare it.

    Coming to interest i m planning to declare 1.63K which is a 75% of 2.18L and remaining 25% my wife will declare under Section 24.

    Please suggest.