I wish to invest around ₹10 lakh for around 20-30 years. How much would the total corpus be after the said duration, and are there ways to invest directly and avoid paying commission? Also, what will be the tax implications arising from this?
Besides, can I opt for a systematic investment plan (SIP)?
— Krishnendu Sinha
Investment of ₹10 lakh, if held for 30 years and taking an earnings rate of 10%, can accumulate to ₹1.75 crore. If the investment is for 20 years, the corpus becomes ₹67 lakh.
Investments including that in SIPs can be made via direct plans. You can go directly to the fund houses or visit their websites to do the investment in a direct plan. Alternatively, there are many robo-advisory firms/websites which also facilitate investments in direct plans. The tax rate as per the current Income-Tax (I-T) act on investments in listed equities is @ 10% (surcharge and cess applicable) for equities that are held for more than one year from the date of purchase.
I work for a private firm and took a superannuation subscription a few years back. My employer does not allow me to cancel the subscription. Is there an option where I can move the money from my superannuation account to my NPS account?
— Amit Chanchlani
You can opt for the transfer of superannuation fund to NPS- either held with your employer or through your bank registered as the point of presence (PoP) and having an active NPS Tier 1 account.
A request for transfer is to be given for the said transfer through your current employer which will initiate the transfer. As per the I-T provisions, the said transfer will not be treated as income of the current year and hence will not be taxable.
I am 40 years old and want to invest ₹10,000 per month for both my retirement needs and the education of my 8-year-old son. Which mutual fund should I choose for this ?
—Name withheld on request
You do have a long-term goal as your son’s education is 10 years away and your retirement is even further to it. Hence, you may consider equity as an asset class subject to your risk profile. And as you want to optimize your returns, SIP in equity mutual funds can be a good option. You can consider a combination of large-cap, flexi-cap, and mid-cap funds in your portfolio.
Surya Bhatia is managing partner of Asset Managers.
