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POSTED BY ON February 23, 2013 3:52 pm COMMENTS (8)
Hi,
I have planned something for my new born daughter however i am confuse so thought of getting help from Pro.
I have started investing in ICICI GOLD funds for Rs.5000 everymonth and planned to increase the same by 10% every year and i did it for almost an year.
Now after she born i thought of diversified the funds so have reduced the investment in ICICI GOLD funds to Rs.3000 and started a new investment of Rs.3000 in ICICI balance funds growth where they have 70% exposure in equity and 30% in debt.
the good things about my investmemt is that i dont have any long lock in period and can redeem the same after a year.
secondly my 100% amount is getting invested and i am not being charged anything extra.
my objective is i am planning to invest for my daughter higher education and her marriage which will take place after 18 and 25 years respectively so i have a long horizon until and unless something goes wrong.
Now my conern is if i redeem the same after 18 and 25 years the amount would be taxable and will come to approx 30% bracket(i am not sure about this).
if this happens my plan to save for her will go for a toss so should i go ahead and browse some ULIP plan where the total amount is non taxable and will give me income tax rebate now also.
I am not very much inclined about the tax saving part or Life insurance as my home loan, term insurance and health insurance is taking care of it.
please help me to understand the complexity.
thanx
rahul
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Dear Rahul, if you do care about your family & D’ter, before doing anything, please read the below discussion in full. After that post your queries again.
http://localhost/jagoforum2/finacial-planning-faqs/2782/
From your original query & subsequent queries, I feel your though process is not clear & you need to get it clear before jumping here & there.
I’m sorry in advance if you feel my reply is not related to your query directly. You may chose to ignore the same. No issue from side.
Thanks
Ashal
MP Sir,
I have a lot of question for you…kindly help
Q1 :you said that if i make a SIP purchase through icici balanced fund where 70% is equity and 30% debt for 10 years and after that i withdraw money which has grown almost 5 times…then i wont be charged any tax on it…
Q2: now again if i invest Rs.3000 through sip in Icici regular gold savings fund for 10 years and the money has grown to 10 times..then what amount of tax would i be charged …..
Q3.and kindly suggest if we have any ulip plan where charges are approx 2-3% including everything…
Q4: also i am planning to have a pension vision for me…
can i take NPS or should i opt for any pension plan..
please please help
Q1 :you said that if i make a SIP purchase through icici balanced fund where 70% is equity and 30% debt for 10 years and after that i withdraw money which has grown almost 5 times…then i wont be charged any tax on it…
Yes as per present tax laws. May change in future.
Q2: now again if i invest Rs.3000 through sip in Icici regular gold savings fund for 10 years and the money has grown to 10 times..then what amount of tax would i be charged …..
10% or 20% with indexation for inflation
Q3.and kindly suggest if we have any ulip plan where charges are approx 2-3% including everything…
Stay away from ULIPs they are complicated and rigid products.
Q4: also i am planning to have a pension vision for me… can i take NPS or should i opt for any pension plan..
For retirement use your EPF if you have it. Invest in MFs. You can open a PPF acc and invest in it each month if your retirement is 15 financial years away.
Stay away from NPS and pension products.
Here is an example of how debt fund is taxed.
http://www.tflguide.com/2010/03/fixed-deposit-vs-fixed-maturity-plan.html
The case is same for gold funds.
And one more question please : Whatever Rahul has invested in ICICI balanced fund in a monthly manner, is it an SIP ? How is SIP different from others ….
Can someone tell me what is balanced funds .. What are the other types of funds … Which one do you suggest ? Can you guide me to any link with proper info. Which balanced funds would u suggest ? I am really not looking at tax saving as I am already covered with my PF and home loan.
A balanced fund invests in a mixture of stocks(equity) and bonds (debt)
if equity is equal to or above 65% then there is no tax if units are held for over an year.
HDFC prudence and balanced are good equity oriented balanced funds.
The advantage of such funds is the equity:debt proportion is maintained by fund manager. So rebalancing need be done.
http://www.onemint.com/2011/03/30/best-balanced-mutual-funds-in-india/
What Rahul has done is a SIP where purchases are made each month typically
As per current law investments in pure equity funds and funds with min 65% equity are tax free if held for more than a year. Gold funds are taxable after 1 year at 10% or 20% with indexation.
While you do need to pay tax on the gold fund it will be lower than, say a FD. It will be lower than what you anticipated.
If I were you I will decrease my exposure to gold and increase investment in the balanced fund and monitor performance regularly.
Best to stay away from ULIPs.