I'm a working woman looking to invest in gold for my family's future. Should I buy monthly 24K gold coins or invest in Gold ETFs, and which is more profitable? - : Meena Kumar, Kayamozhi:
If you plan to convert gold into jewelry later, buying 24K coins might be suitable. However, consider the making charges and GST, which can reduce the gold's value by around 8%. For broader portfolio diversification, explore options like Government of India gold bonds, gold ETFs, or gold savings funds. While gold coins and ETFs attract income tax on gains, gold bonds offer a 2.5% annual interest rate and are exempt from capital gains tax if held till maturity, potentially offering higher returns. Additionally, diversifying into equity funds could further enhance returns.
- Lalitha Jeyabalan, Family Finance Specialist
If I transfer money to my wife's account for stock and mutual fund investments, who pays income tax on the profits? - S. Krishnamurthy, Chennai
Transferring money to your spouse is generally considered a gift and exempt from income tax. If your wife earns profits from investments using these funds, you won't be liable for tax on those gains. Instead, she will be responsible for paying taxes on the generated income. - R. Jagadish, Auditor
What are the key considerations for using a Systematic Withdrawal Plan (SWP) in mutual fund investments, particularly for small-cap funds, aggressive hybrid funds, and debt funds? - Maheshwaran, Kallakurichi
SWP allows for regular withdrawals from mutual fund schemes, reducing the need for market timing. Consider withdrawing from equity-oriented funds (like small-cap and aggressive hybrid) after at least 3-5 years to benefit from long-term capital gains tax advantages. Remember to account for each SWP separately for tax purposes, especially for gains from equity funds.
Srikanth Meenakshi, Co-founder, Primeinvestor.in
I've been investing Rs 20,000 monthly for my child's higher education for two years in four mid-cap mutual fund schemes. Can I continue this investment for 15 years? - Sathya, Karaikudi
Mid-cap mutual funds are suitable for long-term investments. While continuing your investment is advisable, consider diversifying into large-cap, mid-cap, or even small-cap funds to better manage risk. Consulting a financial advisor can help align your investments with your risk tolerance and financial goals. - A: Hasan Ali, Founder, Siptiger.com
