I have just turned 18, and want to start investing with my pocket money, which should be about Rs 1,000 a month. Will the gains be taxed from this investment?
Any income from investment of money by way of gifts or pocket money will be taxable in your hands
I have just turned 18, and want to start investing with my pocket money, which should be about Rs 1,000 a month. Will the gains be taxed from this investment?
Rakhee Acharya, Bengaluru
Good to note your interest in investing the amount you are saving from your pocket money at such a young age. You should use the opportunity to invest for the long run to benefit from the power of compounding when investing in equities. Choose a balanced fund to start with such as SBI Magnum Balanced or HDFC Balanced. These funds follow the asset allocation and rebalancing principle, which is good for first time investors and are also part of the OLM Elite list of funds for beginners. As for the tax treatment on gains from your investments – as you are a major now, any income from investment of money by way of gifts or pocket money will be taxable in your hands, depending on the nature and quantum of your investment income.