I will get Rs. 2 lakhs from Production Linked Incentive (PLI) scheme. Where should i invest this amount – mutual fund or fixed deposit? If you think investing in mutual funds is better, please suggest some good funds.
We believe, optimal investment strategy depends on several factors, including your financial objectives, investment horizon, and risk tolerance.
For short-term investments spanning 2-3 years with a low-risk profile, fixed deposit is a better choice. However, if you’re seeking long-term growth potential and can tolerate higher risk, then equity-oriented mutual funds may be more suitable. If you opt for mutual funds, you may consider the following Multi Cap funds:
- Baroda BNP Paribas Multi Cap Fund
- ICICI Pru Multi Cap Fund
- Mahindra Manulife Multi Cap Fund
- Nippon India Multi Cap Fund
I’m working in Qatar, and I have been investing in mutual funds for the past six years. These investments in mutual funds were started in NRI status. Now I want to know about the tax at the time of redeeming the funds. I came to know that the tax rate is higher when you become an NRI. What percentage is charged as tax. I know that usually there is no tax on profit up to Rs.1 lakh. Can you give me a correct answer to this.
There is no difference in the capital gain tax rates (or duration) for Resident and Non-Resident status. For investments in listed shares and equity-oriented mutual funds:
- Long-term capital gains (holdings exceeding 12 months) are taxed at 10% on gains exceeding Rs. 1 lakh.
- Short-term capital gains (holdings less than 12 months) are taxed at 15% on the gain amount.
For NRIs, Tax Deducted at Source (TDS) is applicable:
- 10% TDS on long-term capital gains
- 15% TDS on short-term capital gains
I am investing in three mid cap and two small cap mutual funds through SIPs ( Rs. 2000 each) for last three years. Returns are very attractive. But now that the political situation is changing, please advise me, if I need to make any changes in my investment style.
Investors can enjoy good SIP returns over the long term only through consistent investment and patience. Historically, markets have demonstrated growth reflecting economic expansion and earnings growth over extended periods, despite volatility, intermittent corrections, and recoveries. We recommend you continue your SIP strategy in alignment with your long-term financial objectives.
To benefit from the increase in gold prices which is a better investment option – Gold ETF or Sovereign Gold Bond. Please explain advantages and disadvantages of both.
Gold ETFs offer high liquidity and no maximum investment limit, allowing investors to buy as much as they want. Sovereign Gold Bonds (SGBs) have comparatively lower liquidity (based on recent exchange volumes) and a maximum investment limit of 4 kg per individual investor per financial year. SGBs offer a 2.5% p.a. interest on the issue price.
Your choice between Gold ETFs and SGBs should be based on your financial goals, liquidity requirements, tax considerations, and convenience. For investors with a positive long-term outlook on gold prices (5-7+ years), SGBs generally present a superior option.
