Investment, Financial Planning, Mutual Fund & Income Tax Queries

What should be the percentage of investments in each equity fund category

I have long term goals identified and amounts also for each goal with inflation into account. I am between a moderate and aggressive risk taker. I have around Rs 90,000 investment under Section 80C available which I want to do in ELSS. I request you to tell me the % of investment in Large Cap, Mid Cap, Mutli Cap, Small Cap and ELSS Funds?

Jun 6, 2017 by Gautham K, Chennai | Mutual Fund

Glad to hear that you have identified your long term goals and the know the goal amounts post inflation and have already made provisions for that. Please note that, there is no thumb rule as to what should be the... Read More

Which Mutual Fund SIP should I start for my children

I just came across your website, were I am planning to start investment of monthly small SIP starting with 1,000 Rs each for my two children. Son is of 9 years old and Daughter is of about 8 years old. And for my case, which would be the best performing mutual fund to earn good returns after 10 years. What approx returns can we expect? And I should do separate two SIP or one SIP of 2000 Rs monthly? And can we increase in multiples of 500 Rs in future? Please suggest?

Jun 6, 2017 by Rajani, Hyderabad | Mutual Fund

Great to hear that you want to start SIPs for your two young children. You can invest in large cap or diversified equity funds as I am sure your investment horizon is 5 years and above. You can start investing... Read More

How much can I expect after 5 years if I invest in SBI Bluechip Fund now

If I will deposit 60,000 Rs in SBI Blue Chip by lump sum, then How much amount I will get after 5 years? If I will deposit 10,000 Rs in SBI Blue Chip by SIP method, then How much amount I will get after 5 years? Please suggest Lump sum and SIP calculator?

Jun 5, 2017 by Phani Raju Rayadurgam, | Mutual Fund

As you may know, returns in mutual fund are neither assured nor guaranteed. However, you can assume some rate of return based on how the funds in the respective categories delivered returns in the past... Read More

Can you give suggestions on my mutual fund portfolio

Thank you for creating such a nice portal. I am investing in Mutual funds through SIP from 4-5 years and will continue to invest for another 10-15 years. Currently I am doing Monthly SIPs of Rs. 10,500 which are divided among 6 funds in the following manner - Large Cap: Franklin India Bluechip Fund Rs. 2000, ICICI Pru Focused Bluechip Equity Fund Rs. 2000. Small and Mid Cap: Canara Robeco Emerging Equities Rs. 1000. Diversified: Franklin India High Growth Companies Fund Rs. 2000, Reliance Equity Opportunities Fund Rs. 1000. Balanced: Tata Balanced Fund Rs. 1000. ELSS: Axis LT Equity Fund Rs. 1500. Questions for you - 1) How is my portfolio and my fund selection? 2) I am looking at a corpus of 5 Crores at the end of 15 years from now, by looking at the above portfolio how much more should I invest in SIPs? 3) I am planning to increase my monthly SIP by Rs. 20000, which large cap or diversified funds you can suggest?

Jun 5, 2017 by Mrinmoy Bhattacharya, Bangalore | Mutual Fund

Even though you have selected some popular fund names from respective categories, we think it needs to be reshuffled little bit. Here you have few of our suggestions – Fund selection for large cap and mid... Read More

In case of short term gains from equity funds do my father need to pay taxes

My apology for circling back to you. I have a question on the structure suggested by you i.e. invest Rs. 3 Lakhs in Liquid Fund to be exhausted fully in 12 months by equated withdrawal and invest rest in SWP with withdrawal starting after 12 months. I have a question which may sound a bit naive (or even stupid!) - please pardon me! Instead of a combination of Liquid Fund + SWP - a) Can I look at only SWP in an Equity Fund or a Balanced Fund (Equity oriented) and start withdrawal from the first month itself (say Rs. 25000 pm i.e. Rs. 3 Lakhs pa). b) From a taxation angle, this withdrawal will be treated as STCG (< 1 year). c) The total income of my father for the year will be approx Rs. 6 Lakhs (Rs.3.00 Lakhs he presently receives from Bank FDs + Rs. 3.00 Lakhs SWP). d) I can look at investing further in one of the avenues available under Section 80C to cover the excess of Rs. 1 Lakh over and above the exemption limit of Rs. 5.00 Lakhs available to Super Senior Citizens. Am I missing something in the above thought? I shall appreciate your time and feedback on the above?

Jun 5, 2017 by R Kumar, | Mutual Fund

No problem with your writing back to us as long as your queries are not resolved/ answered. Please note the following – Yes, you can look at doing SWP from equity or balanced funds. But, what if you do not... Read More

In case of short term gains from liquid funds do my father need to pay tax

I am extremely grateful to you for your time and guidance, which cannot be more simple and lucid for a layman like me! If I may be permitted to take up a few more minutes of your time, I have just one question emanating from your mail - a) You have suggested putting a sum in Liquid Funds for 12 months and withdraw it equal monthly in one go. How about tax impact on such withdrawal. The Liquid Funds are categorised as Debt Funds or Non-Equity Funds and any withdrawal before 36 months of holding will attract STCG tax. I shall appreciate your guidance on this (For your ready reference, I recap - a) my father is a Super Senior Citizen (SSC) b) His present annual income from bank FDs is approx Rs.3,20,000 and c) Present tax exemption for a SSC is Rs. 5, 00,000. I thank you in advance once again for your time and guidance?

Jun 1, 2017 by R Kumar, | Mutual Fund

We are aware about the short term taxation of debt / liquid funds. Please note that in this case, the short term capital gain will be added to your father’s income and taxed according to his tax slab. But, we... Read More

Is my mutual fund investment portfolio mix good

Whether my portfolio mix is good? What funds should I select for further investment? Currently, I have SIP's worth Rs 25,500 monthly in the following funds (all plans are direct and growth) 1) Axis Long Term Equity Fund - Rs 1000 (14% of total MF investment), 2) DSP BlackRock Tax Saver - Rs 2000 (3%), 3) Franklin India Smaller Companies Fund - Rs 8000 (46%), 4) Motilal Oswal Most focused Multicap 35 - Rs 7500 (19%), 5) Mirae Asset Emerging Bluechip - Rs 3000 (2%), 6) ICICI Prudential Value Discovery Fund - Rs 4000 (16%). My age is 27 and my investment horizon is 15 years plus. 1) Please suggest whether my portfolio mix of funds is good? 2) I want to make my monthly SIP amount to Rs 50,000. Whether should I invest in new fund or in existing funds? Please suggest new funds or amounts for existing funds? P.S - I have decreased SIP in Axis Long Term Equity Fund as it was not performing well compared to its peers?

Jun 1, 2017 by Harish Biyani, Mumbai | Mutual Fund

You have selected good funds for your SIPs and allocation of around 48% to midcap funds is also fine considering your age and investment horizon. Portfolio mix is good considering that you are also investing... Read More

Should my father go for SWP from balanced funds

My father (a Super Senior Citizen) has recently sold a property and is interested to invest part of the sales proceeds in MF, with a primary objective of getting monthly income. I have recommended to him to diversify into MF investment (his present investments are ONLY in Bank FDs) under MIP or SWP, with monthly dividend / withdrawal respectively. He is not risk averse and is open to investing even in a pure equity fund. Time horizon is minimum 5 to 7 years. I shall appreciate if you can clarify on the following points - a) I understand that the monthly dividend on MIP is tax free at the hands of the investor. But the pitfall is, it comes in our hands after a hefty deduction at source in the form of Dividend Distribution Tax (28.8%) for Debt Funds (Equity funds, I reckon, are exempt from DDT). Another risk is the swing in the dividend payout, which is a pure function of the market. Hence, my father is a bit reluctant to be enticed to a MIP. i) Do you still reckon MIP is a good option from a taxation point of view? Can you suggest some schemes for MIP which, historically, has exhibited relatively less volatility in the pay out? b) As regards SWP, I understand that any withdrawal before 12 months will attract Short Term Capital Gain Tax. Is my understanding correct? i) If my father is keen to diversify to SWP, how to start withdrawal from the first month and avoid STCG? Additional information to enable you to give guidance - My father presently earns an annual interest of approx Rs. 3,20,000 from Bank Fixed Deposits. His new corpus to diversify into MF is approx Rs. 25 to 30 Lakhs. I thank you in advance for your time and guidance?

Jun 1, 2017 by R Kumar, | Mutual Fund

Your understanding about the taxation of MIPs and balanced fund is right. Therefore, we are no deliberating on that again. We feel that since your father can take risk and even ready to invest in equity funds, you... Read More

Can I achieve a goal of 1 Crore after 5 years by investing in SIPs

I am willing to invest in mutual fund. I will be doing a SIP of Rs 50,000 monthly & have created the following diversified portfolio - HDFC Balanced Fund(G): Rs 5000, Birla Sunlife Dynamic Bond: Rs 5000, Birla Sun Life Advantage Fund(G): Rs 8750, SBI Bluechip(G): Rs 8750, Franklin India Prima Fund(G): Rs 8750, Kotak Emerging Equity Fund: Rs 8750. My age is 25 years and target is to buy a home after 5 years worth 1 Crore. Please guide me with my investment portfolio?

Jun 1, 2017 by Shekhar Suman, Jamshedpur | Financial Planning

Glad to hear that you want to buy a home worth Rs 1 Crore after 5 years from your SIP corpus. Congratulations in advance! You have selected good funds for your monthly SIPs and excepting Birla Sun Life... Read More

Can I invest in balanced funds and do STP to equity funds for retirement corpus

I have been investing in SIP for past 2 years accumulating around 5 lacs till now. My plan is to invest around 25 lacs in balanced funds across multiple AMCs and start STP of around 4,000 to 5,000 to diversified and SMC funds for 4 years after a wait period of 1 year to avoid exit loads. Strategy is to invest around a sum of 35 lacs over 7 years and hold for around 15 years after that. Will that be sufficient to accumulate a retirement fund of 5 to 7 Crores. Kindly advise if this is a good strategy?

May 31, 2017 by Vishal Shukla, Thane | Retirement Planning

If we have understood your query well, then your main objective is to accumulate Rs 7 Crores for your retirement after 22 years, right? Now, how you can achieve the goal is a function of how much you can invest... Read More