Investing 10lakhs properly

POSTED BY chimp 239 ON May 29, 2013 2:25 pm COMMENTS (5)


My mother had invested Rs 10 lakhs in ULIP funds without proper awareness . Recently because of all time rise in the stock market , I had taken out the funds .  I have following questions

1. The invested amout was Rs 10 lkhs and the returned amount was 10,77,000 . Will I have to pay tax ,if I am reinvesting the complete amount?

2. I want to reinvest the complete amount for about 5 years to get good gains but at the same time I dont want to lock the amount for 5years (in case of any emergency)

3. My mother has already FDs in her name , can you suggest me other investmestment which yields higher results and at the same time saving tax

4. I have a sister who will be turning 18 this year , so can I used to my advantage to save tax by investing under her name ?

5. I and my sis are still studying so please keep this view point while giving ideas.

6. Also till I invest in something , IF I add it in flexi-FD , they will be cutting some amount when I break it . This amount which they will cut will be on PRINCIPLE OR THE INTEREST WHICH amount gained in those days?

5 replies on this article “Investing 10lakhs properly”

  1. Adithya V.R ds says:

    So in order to make sure we are on the same page , even if I invest whole principle plus interest , I will have to pay tax on interest ? That is what you meant ?

    1. I get Rs. 100 from a ULIP. I reinvest in some instrument which is taxable. I get Rs. 10 as return from Rs. 100.

      Rs. 10 alone is taxable as per rules.

  2. Adithya V.R ds says:

    for 6. Can i know the reason for the answer ? And in general i want to know how the interest is cut if I take out before maturity. Recently i have read few articles which say it is one of the ways to earn higher rate of interest.

    I am still confused about the 1 answer . Even if I reinvest the whole amount I have to pay the tax ? The product was SBI ULIP pension plus. Will the whole amount be taxable or just the interest ?

    1. The interest earned on reinvestment is taxable (irrespective of how much you invest). Once you reinvest the ULIP story is irrelevant.

      6.. It is extremely complex in terms of tax and there will be penalties on withdrawals. Instead of that a simple liquid fund will do the job

  3. 1. Yes. As per slab depending on instrument

    2 and 3 invest in a conservative fund like Reliance MIP
    See this to understand how debt funds are better than FDs

    4. No tax will still have to be paid by your mother unless your mother invests in equity MFs and stay invested for at least a year, This will of course make returns uncertain. PPF is another choice but a lock-in of 15 years may not be suitable for you.

    6. Stay away from Flexi-FDs.

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