Avoid Crypto As It Is Highly Volatile

Rohit Tyagi

I am 22 years old and have recently started working. I want to invest a small portion of money in cryptocurrency. How should I go about it? Does it require a huge capital investment?

If you are new to investment, I would not recommend you to invest in cryptocurrency. Equity in the form of mutual funds is suitable if you are looking for long-term investments, or else fixed deposits or debt funds can take care of short-term goals.

Cryptocurrencies are highly volatile and can lead to significant losses. Would you be comfortable with a 50-70 per cent erosion of your invested value within a year?

Crypto is unregulated in India, making them prone to fraud and market manipulation. Remember, they have no investor protection mechanism. Unlike stocks or bonds, cryptocurrencies don’t have underlying assets or earnings, making their value purely speculative.

The high-risk, high-reward nature of crypto can also lead to impulsive trading and addiction.

If you still wish to proceed with crypto, please do so cautiously. You can start investing a small amount, say Rs 1,000. Always use well-known and secure platforms. Keep track of market trends and government regulations regarding crypto in India.

Col Sanjeev Govila (retd), CFP, CEO, Hum Fauji Initiatives, financial advisory firm

Megha Roy

I started investing in a mutual fund in 2023 through systematic investment plans (SIPs). If I liquidate my investment after the last installment in May 2025, can I treat the profit as long-term capital gains (LTCG), or do I have to wait for two years after the end of the last installment to claim it as LTCG?

The holding period for mutual fund units for it to classify as LTCG is 12 months from the investment date. The same has to be seen unit wise. Hence, for the units which you purchased, say before September 2023, you may sell them now and the gains will be LTCG. However, for the units which you purchased after April 2024, the gains will be treated as LTCG only after May 2025. You may thus calculate the period of holding and capital gain will be calculated accordingly.

Vivek Jalan, Partner, Tax Connect Advisory

Shreya Gupta

My brother and I have individual employer-provided medical insurance policies of Rs 3 lakh and Rs 2 lakh, respectively. My parents have a family policy of Rs 5 lakh that also includes my brother and me, besides their individual company-provided policies. Should I still buy a separate medical policy for myself? Can I include my brother and my parents in that policy?

You should have your own personal insurance policy and not depend on corporate insurance. That’s because companies can change their policies, or you could lose your cover upon changing your job. The cover of Rs 3 lakh is inadequate, especially if you live in a metro city.

As a rule of thumb, the amount of sum insured should be equal to your one year’s salary.

Buy an individual insurance plan of Rs 3 lakh. You mentioned that your parents have included you in their family floater plan. You can ask the insurance company to remove you from that policy and give you an independent cover. This will bring your parents’ premium down, while also provide you adequate insurance cover for yourself.

Kapil Mehta, Co-founder, SecureNow