Where to invest Rs 10 lakhs to get a monthly Income of Rs 10 thousand

Before you invest in any fund or market linked products (say, mutual funds), you must assess your risk profile.

Getting a monthly return of Rs. 10,000 from an investment of Rs. 10 Lakhs is quite challenging. Definitely, this is impossible from fixed return instruments as the returns will not be more than 7-8% currently.

If you can take risk then mutual funds could be an option but then mutual funds do not provide any assured returns and expecting 12% is little ambitious.

However, if you are willing to take risk then going for SWP plan of mutual funds can make sense. You can invest the lump sum amount in a balanced fund or equity fund (depending upon your risk profile) and then start withdrawing a fixed amount every month. But, you should keep few things in mind before you start investing through SWP mode -

1. Investing in equity or balanced mutual funds is risky.

2. If you start SWP immediately after investing the lump sum then the gains derived out of each SWP installment will be treated as short term capital gains. However, if you can wait for one year and then start the SWP then the gains are not taxable as long term capital gains are tax free in case of equity and equity oriented balanced funds.

3. There are no assured returns but you can plan withdrawals based on return expectation of 9-10%. Therefore, in case of Rs. 10 Lakhs, you may plan to withdraw around Rs. 8,000 per month.

You can see SWP returns from this link based on the above example https://www.advisorkhoj.com/mutual-funds...

You may try our SWP research tools to know more about this option -

https://www.advisorkhoj.com/mutual-funds...

https://www.advisorkhoj.com/mutual-fund...

Hope the above helps. Thanks for writing to Advisorkhoj.