Queries
Vivek Soota , Delhi
I would like to invest in mutual funds for funding my son ’ s college education abroad . My son is 7 years old , and I am investing `50,000 a year in a child plan from LIC for this goal . I would like some guidance to achieve this goal 10 years from now . At the outset , let me complement you for identifying a focused goal i . e . child education . For effective goal setting , it is important for you to identify the present cost of education that you want to fund through this investment . To make the planning more focused , apart from the tuition and college fee , you may also like to provision for additional costs like travel and living expenses for the duration of the education abroad . Assuming that the present cost of total funds that you require for your child ’ s education abroad is `30-`40 lakh , the same cost after 10 years would increase to `48.31-`64.42 lakh . This is after taking into account a conservative inflation of 5 per cent per year in the total costs . For getting to this future cost , assuming investment returns of 10 per cent per year , you ’ ll need to invest `3.03 -4.04 lakh per year . You should consider investing on a monthly basis into diversified equity mutual funds , since you have investment time of 10 years on your side .
Prashant Kapoor , CFP
Vipul Sharma , Delhi
What is the difference between diversified equity scheme and ELSS ? Which one of them is more secure and profitable ? Like any other diversified equity mutual fund , equity-linked saving schemes , or ELSS , invest in a diversified portfolio of equity shares . However , unlike an openended diversified equity scheme ,
Manjunath , Bengaluru
My mother holds some equity shares which she inherited from my father when he passed away . The holdings are in physical form . She now wishes to gift them to me and I want to hold them in my demat account . Could you please advise me on the process to convert them into demat form ?
Your mother can transfer the shares to you through the registrar and share transfer agents of the company . She needs to submit her original share certificates to the R & T agent along with the Share Transfer Deed in Form No SH-4 ( Securities Transfer Form ) duly filled in , executed and affixed with appropriate share transfer stamps . A self-attested copy of your PAN card will also be needed . Stamp duty for transfer of shares is 25 paise for every `100 or part thereof of the value of shares on the date of the execution of the transfer deed . Once shares are transferred to you , you can get them dematerialised through the depository participant ( DP ) where you hold your demat account .
Pankaj Mathpal , CEO , Optima Money Managers
ELSS comes with a lock-in period of three years from the date of investment , which means , the units cannot be redeemed during this period . Investment in ELSS funds qualifies for a deduction of up to `1.5 lakh under section 80C of the Income Tax Act . Schemes under both these categories bear the same kind of risk and have a similar growth potential . You can make the choice of your investment based on your needs .
Pankaj Mathpal , CEO , Optima Money Managers
Brijesh Malik , Hyderabad
I have a home insurance policy , can I also add the expensive fittings that I have recently included ? This is a very subjective matter . For this you need to read the annexure of the policy which clearly contains the ifs and buts . For this , you should contact your advisor via whom you purchased the policy . Usually add ons are not included but please read the policy note .
Pankaj Ladha , Founder , Pankajladha . com
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Outlook Money December 2017 www . outlookmoney . com