These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.
I am a 50-year-old widower. My wife passed away a few years ago. I currently have around 800 grams of gold that belonged to her and my late mother, combined. I have two daughters, aged 12 and 13. I would like to understand how I can transfer or gift this gold to my children. I do not have the purchase invoices for the gold.
Rajat Dutta Founder & Initiator, Inheritance Needs Services: There is no limit on the quantum of gold that an assessee can hold, provided it was acquired legitimately, through taxed income or inheritance. As per the Central Board of Direct Taxes (CBDT) guidelines, the permissible limit of gold is 500g for each married woman and 250g for an unmarried woman. Your current holding, apart from being within the stipulated limits, is identifiable through inheritance, being originally owned by your mother and wife (both deceased). You can gift the same to your daughters once they are major, after they attain 18 years of age.
ALSO READ | Do I need to convert my leasehold DDA flat to freehold to sell it?
A 76-year-old wishes to make a one-time investment in the names of his grandchildren (aged 9 and 4). He would like the amount to be available to his grandson at 21 and to his granddaughter at 18. Please suggest suitable options that offer maximum returns.
Rushabh Desai, Founder, Rupee With Rushabh Investment Services: As a grandparent, you can invest in mutual funds for your grandchildren. In India, the process is well-defined but requires coordination with the parents who will act as guardians/custodians. You cannot claim an income tax deduction for investments made in the name of your grandchildren. The good news is that any amount of money gifted by grandparents to their grandchildren is exempt from gift tax.
You have an investment time horizon of 12 to 14 years, which is long enough to take risk and maximise returns. You will not be able to maximise on the returns with minimal risk. Here are 3 options for you: pure equity mutual funds portfolio consisting of 2-3 flexi cap funds (high risk, high returns); hybrid mutual funds portfolio consisting of 2-3 dynamic asset allocation funds (moderate risk, moderate returns); and, 50% pure equity and 50% hybrid mutual funds portfolio.
Looking at the long-time horizon and since the money is for your grandchildren, my recommendation would be to go with the first option which will help in maximising the returns, but you can opt for either of the options you like.
Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com
