Is It Feasable To Opt For A Double Home Loan?
Dilip Yadav, Mumbai
Hi, I have Rs50 lakh in my NRE account and wish to invest for a period of 10 years. Kindly suggest options for wealth creation.
Ideal and most suitable investment for long-term wealth creation is equity. You may target a CAGR of 12-14 per cent for this period. In such case, the target amount could be around Rs1.7 crore at the end of the tenure. You may split your entire investment horizon into two. First nine years you can invest in equity mutual funds and later switch the entire proceeds to a debt fund for the last one year. You may even switch the proceeds to debt as and when you reach the desired corpus so as to preserve the gains. Since we do not know your age, we are recommending a generalised cap wise allocation for you. Initially you may allocate 40 per cent into large cap funds, 40 per cent into mid cap and 20 per cent into small cap schemes. You may restructure the allocation after five years to make it 60:30:10 respectively till you shift it to debt.
Jeevan Kumar KC, Head - Investment Advisory at Geojit Financial Services
Sagar, Lucknow
Sir, I am a government servant. My monthly contribution towards NPS is `86,700 and equal amount is contributed by the Government. Both of these combined, more than `15,00,00 goes out. Apart from this, I pay the premium for my term plan and health insurance. Now my question is - Do I need to invest anything else to save tax in Section 80(C)? I want to take advantage of extra `50,000 saving in NPS which makes total deduction to `2 lakh. How to do it?
You have already exhausted limit of `1,50,000 U/s 80(C). So any additional investment will not provide you additional taxation benefits. Therefore not recommended.
An additional deduction for investment up to Rs50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs1.5 lakh available under section 80C of Income Tax Act, 1961. Therefore, you can invest an additional amount of up to `50,000 per year in NPS under section 80CCD (1B) and get an additional tax benefit.
CA Abhishek Raja, Founder and Promoter, GST Panacea
Ramachandrans, psr_42@yahoo.com
I have invested in 2017, in the following dividend paying investments to have a better monthly return than in bank fixed deposit. However the returns as well as the NAV (value of investment) are gradually reducing. Please advice whether to close and take redemption or shift to another any fund in the same UTI. Similarly invested in 2017 in ICICI Prudential Equity Debt fund in the divident option scheme for monthly returns. Returns and investment value is reducing. Please advise whether to take redemption or shift to any other type of fund in the ICICI MF.
UTI Hybrid Fund (erstwhile known as “UTI Balanced Fund”) was an average to above-average performer within hybrid (balance) fund category upto three to four years ago. Infact it generated a negative return of 5.57 per cent in 2018. This fund is yet to touch its highest NAV of 2017. To couple up the problem, since last year’s Budget market is highly volatile. This fund has reduced its dividend drastically since December 2018. Considering its past one to two year performance we recommend you to switch out from this fund.
ICICI Prudential Equity Debt Fund (erstwhile ICICI Prudential Balanced) is a good fund. Monthly dividend in this fund has reduced but that is primarily because market is volatile and is in somewhat negative territory. But this fund usually generates above average returns with low risk so we hereby recommend to continue this fund. If you want to take fresh exposure we would recommend Mirae Assets Hybrid Equity Fund and Principal Hybrid Equity Fund.
CA Abhishek Raja, Founder and Promoter, GST Panacea
Mohamed, Moinuddin, Alain, U.A.E
I am an NRI. I want to gift `50 lakh to my daughter to pre-close her home loan. She is an Income tax assessee of 20 per cent slab. What are the tax implications?
Under Income-tax Act, 1961 gift received from a relative is not chargeable to tax. Father is covered under the definition of a relative, hence, gift received by your daughter from you, will not be taxable in her hand. You may remit the money to the account of your daughter.
Mr. Ashok Shah, Partner, N.A Shah Associates LLP.