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POSTED BY ON June 12, 2012 8:28 pm COMMENTS (3)
My frnd’s dadaji is 80 yrs old, he just sold his old land some days back, and has got a Rs. 10,00,000, out of which 5,00,000 were paid by check and 5,00,000 were paid by cash( distribution of money is – 50% in white and in 50% black), now he wants to invest his money seeing next 10 years visibility
1. he wants to build a emergency fund for him and his wife,which can be used as a health insurance.
2 he also plans to travel around his old village in karnataka and use some amount for charity but he is not sure when and how he will spend it…
He earns a pension of Rs 17,000, and monthly expense is 11,000. rest he invests in FDs.
so far he has invested 5,00,000 in FDs. he owns his own house.
He plans to fill form 15 H, so that all the interest earned on FDs will be tax free.
he wanted to gift some amount to his grand children but his son and daughter has requested him to use this money for himself and for their mom. So his family members don’t want his single penny.
how should he invest his money smartly?
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Dear4 Ajinkya, Yes is the answer. By the way what about tax liability on white amount from capital gains?
Thanks
Ashal
ashal, i asked the same question to him, his reply was – I was demanding 10,00,000 in white but the purchaser was not keen on it as stamp duty amount was exorbitant according to him, so they decided that deal as an inevitability…so i cant dig in further into it…i was just trying to help him out, but we all know that real estate in this country lacks transparency…
i think he should invest 5 lakhs in flexi-FD saving account by keeping a threshold amount of 50,000; so he would get higher interest and if he fills form 15H the interest will be tax free, and cushion of 500000 is enough for medical emergencies according to me..
the rest amount can be divided into 5 fds of just below 1 lakh…do u suggest laddering of FDs in this regards?
Dear Ajinkya, how do you think that cash amount of 5L ‘ll be come into picture as it’s already black money? Please answer this first. By the way keeping his age & current investments in mind, it’s advisable to invest only in bank FDs but split it in to multiple FDs of 1L Each to save on penalty in case in between there is a need for partial liquidity.
Thanks
Ashal