[whitewing]

Originally Posted by Ananthang

Then I realized the profile is sitting under my deceased father in law and I have successfully invested on a dead persons account. I paid using UPI.

Couple of implications you need to bear in mind.
Any further sale would also get logged in your FIL's AIS statement and the tax authorities would be informed of the same. If the PAN is not extinguished then perhaps you could just redeem the units ASAP and file according tax returns.

If you paid via your UPI ID make sure to have a letter/email on "gifting" this amount to your MIL.

Originally Posted by DigitalOne

Admitting the mistake and going via the customer service route may invite bigger trouble as you are not supposed to operate a deceased person's account even if you know his/her password.

I agree that this is possibly the best way to go about and deal with the hassle with the tax authorities if an when it pops up. This is the approach I would have taken.

[am1m]

Originally Posted by DigitalOne

...as you are not supposed to operate a deceased person's account even if you know his/her password.

Oh shucks, thanks for clarifying this! I was under the impression that since I have shared all my bank and investment account passwords with my spouse, it would make it easier for her to access the amounts there faster, in case something were to unexpectedly happen to me, without having to go through all the hassles with the bank, etc.

Question to the general forum: I guess the correct thing to do would be to make her the nominee for all of those accounts? And also specify it in the will? In that case, I guess some running around with the death certificate at the bank will be inevitable anyway for her to get those assets transferred to her name? (Thanks in advance for any information!)

[deathwalkr]

Originally Posted by am1m

Question to the general forum: I guess the correct thing to do would be to make her the nominee for all of those accounts?

Banks and Mutual Fund houses have been pretty diligent in informing customers to update Nominees for each account. Guess it is the best way to go about things.

But then again read somewhere in an insurance payout case, legal heirship trumps over nominee.

Oh well.

[Carpainter]

Originally Posted by deathwalkr

But then again read somewhere in an insurance payout case, legal heirship trumps over nominee.

Oh well.

I don't remember correctly but I think there was a court judgement few years back that says a nominee is just a custodian of funds of the deceased account holder and it's the responsibility of the financial institution as well as the nominee to disburse the wealth amongst the legal heirs. I think this was a judgement given in a case where the nominee was not a legal heir of the deceased person. Say when the nominee is his nephew when his wife and sons/daughters are still present.

I think he should consult a CA or a lawyer to proceed further and avoid future complications.

[DigitalOne]

Introducing Specialized Investment Funds (SIF) - a new class of investments.

SEBI has introduced a new class of investments called Specialized Investment Funds (SIF) - a Mutual fund like investments but with some key differences.

Why is this new investment class required?
Currently, there are three classes of investments:

• Mutual Funds, with minimum investment size of Rs. 500/-
• Portfolio Management Services (PMS), with minimum investment size of Rs. 50 Lakhs.
• Alternate Investment Funds (AIF), with minimum investment size of Rs. 1 Crore.

Over the years as investors' wealth has grown, SEBI has identified a gap between MF and PMS. This gap, as per SEBI, is being plugged in the market by unregulated, often illegal operators. So now SEBI wants to enable MF Asset Management Companies (AMC) to offer this as well-structured and regulated products.

So, in comes SIF with a minimum investment size of Rs. 10 Lakhs.

Who can offer this product? Existing MF AMCs with a track record (> 10,000cr AUM in last three years) or AMCs who hire (poach) experienced fund managers with a track record (managed >5000cr AUM).

When will it start? SEBI has already notified this to start from 1-Apr-2025. The AMC NFOs will start by May/June, if not earlier once they are ready with the backend infrastructure.

What is an SIF and how is it different from Mutual Funds? SIFs are similar to Mutual Funds in the sense that investor money is pooled and invested in Equity, Debt or Hybrid. Where it differs is the minimum ticket size (>=10 L) and the strategies they employ to invest. SIFs are allowed to have derivatives, short positions, highly concentrated portfolio etc.

In short, SIFs have more flexibility than MFs to employ "high-risk, high return" strategies.

SEBI has classified SIFs into seven strategies/categories:

Equity Oriented Investment Strategies(3):

• Equity Long-Short Fund
• Equity Ex-Top 100 Long-Short Fund
• Sector Rotation Long-Short Fund

Debt Oriented Investment Strategies(2):

• Debt Long-Short Fund
• SectoralDebt Long-Short Fund

Hybrid Investment Strategies(2):

• Active Asset Allocator Long-Short Fund
• Hybrid Long-Short Fund

For more details, please check page 5-7 of the SEBI notification. I couldn't make head or tail of these 'strategies' , so I strongly suggest those who are interested to read the SEBI's notification.

Other operational details:

• These will be branded and offered by AMCs separately from MFs. SIFs may have a separate brand name itself.
• Only 1 SIF per strategy/category per AMC, similar to MF rules. That means, an AMC can have at max 7 funds.
• Website will be different than the existing AMC website.
• No transfer (or STP) between regular MFs and SIFs.
• SIFs can be both open-ended or close-ended, similar to MFs.
• Minimum investment (>= 10L) is per PAN, per AMC. That is, 10L can be distributed across among the SIFs offered by an AMC.
• Minimum 10L has to be maintained by the investor i.e. an investor cannot redeem an amount that will bring the total value (across funds of the AMC) to <10L. If you do that, the entire amount will get auto redeemed. On the other hand, if the fund value falls below 10L because of fall in NAV, the investor need not put in more money to plug the gap.
• Expense ratios similar to MFs.
• Taxation similar to MFs with similar classifications (Equity, Debt, Hybrid)

Opinions follow with standard disclaimers .

Should you invest? No, till the time there is good track record (at least 5 years) by the AMCs in these newfangled "strategies". However, if you are already actively investing using Portfolio Management Services, SIFs may provide a better diversification and de-risking. You need not put all your eggs into a single PMS provider. Or if you have excess money and want to play around a bit fully conscious of the risks.

This is a new golden goose for AMCs . There will be some intense marketing by AMCs in the coming months. Your now-dormant AMC relationship managers will suddenly become your well-wishers. So, it is better to be informed now and not to get sucked into it.

Sources: MoneyControl , Smallcase, SEBI official circular

[thirugata]

Originally Posted by DigitalOne

Introducing Specialized Investment Funds (SIF) - a new class of investments.

SEBI has introduced a new class of investments called Specialized Investment Funds (SIF) - a Mutual fund like investments but with some key differences.

This video explains some of the differences between MF, SIF and PMS.

https://youtu.be/f-t-Yw46NDM?si=nxNbk5NM5fjKjArY

[Fx14]

Originally Posted by DigitalOne

Currently, there are three classes of investments: [list][*]Mutual Funds, with minimum investment size of Rs. 500/-

There are quite a few Mutual Funds schemes with minimum investment size of Rs.100/- too.

IIRC some time back one of the AMC's was advertising starting an investment in MF with just Rs. 10/-.

[ArTigor]

Need some advice on investing in mutual funds through SIP.

I am looking forward to make a monthly 10000 rupees SIP, investing for a minimum 5 year period, this is purely for investment purpose and not for tax benefits. Ideally I am going to keep the investment untouched for 10 years, but would think of liquidating it after 5 years if any emergencies arise.

Should I invest the money all at a go in one SIP, or should I invest the money in different funds, say 3000 each in 2 different funds and 4000 in a separate fund?

Which funds to invest in? Looking at low to medium risk ones.

Apart from the 10k for mutual funds, would also be looking forward to investing monthly 10k-15k in other assets like gold.
Would not like to invest in anything which gives returns in form of interests due to religious aspects.
What else non-interest based investments apart from gold can I look forward to invest in? Not keen in directly investing in shares.

Thanks in advance for your valuable advice.

[VWAllstar]

Originally Posted by ArTigor

Need some advice on investing in mutual funds through SIP.

I am looking forward to make a monthly 10000 rupees SIP, investing for a minimum 5 year period, this is purely for investment purpose and not for tax benefits. Ideally I am going to keep the investment untouched for 10 years, but would think of liquidating it after 5 years if any emergencies arise.

Should I invest the money all at a go in one SIP, or should I invest the money in different funds, say 3000 each in 2 different funds and 4000 in a separate fund?

Which funds to invest in? Looking at low to medium risk ones.

Apart from the 10k for mutual funds, would also be looking forward to investing monthly 10k-15k in other assets like gold.
Would not like to invest in anything which gives returns in form of interests due to religious aspects.
What else non-interest based investments apart from gold can I look forward to invest in? Not keen in directly investing in shares.

Thanks in advance for your valuable advice.

Better to discuss in detail with a financial planner. There is a lot to know about yourself before anyone can suggest any investment strategy. Your age, earnings, expenditures, current debts, goals and so forth are to be considered before any investment strategy is built.

In an ideal scenario, MFs should be divided into Large, Mid and Small caps in a ratio as per one's risk taking ability. For someone in his early 20's can start with higher percentage in small caps and gradually decrease it with age.

One question, what do you mean by non interest investments? How is interest different from profits? All investments will earn you interest. In my view Interest is the profit earned by lending money. So in case of investments, that's never the case. Correct me. Quite interested to know your thoughts.

[DigitalOne]

Originally Posted by ArTigor

I am looking forward to make a monthly 10000 rupees SIP, investing for a minimum 5 year period, this is purely for investment purpose and not for tax benefits. Ideally I am going to keep the investment untouched for 10 years, but would think of liquidating it after 5 years if any emergencies arise.
...
Would not like to invest in anything which gives returns in form of interests due to religious aspects.

I would suggest the SIPs to be split it into 3 funds - Any Nifty50 Index fund (30%), any Midcap Index fund (40%), and a good Flexicap fund (30%; recommended is Paragh Parikh Flexicap fund). You may chose the first two funds from the same AMC.

Make sure that the investments are in a Direct mode and not in Regular mode. You can invest directly via the respective AMC websites.

For Gold, do SIP in a Gold mutual fund which are offered by many AMCs.

Just keep it boring and simple (and Direct).

Please be aware that in almost all MF equity investments, the underlying shares can be in banks/financial institutions which are dealing with interest. If you are looking for Sharia-compliant Mutual Funds, you can see the list here.

[07CR]

Originally Posted by ArTigor

Need some advice on investing in mutual funds through SIP.

I am looking forward to make a monthly 10000 rupees SIP, investing for a minimum 5 year period, this is purely for investment purpose and not for tax benefits. Ideally I am going to keep the investment untouched for 10 years, but would think of liquidating it after 5 years if any emergencies arise.

Should I invest the money all at a go in one SIP, or should I invest the money in different funds, say 3000 each in 2 different funds and 4000 in a separate fund?

Which funds to invest in? Looking at low to medium risk ones.

Apart from the 10k for mutual funds, would also be looking forward to investing monthly 10k-15k in other assets like gold.
Would not like to invest in anything which gives returns in form of interests due to religious aspects.
What else non-interest based investments apart from gold can I look forward to invest in? Not keen in directly investing in shares.

Thanks in advance for your valuable advice.

These are some very broad questions you are asking on a Team Bhp thread.

I will try to answer from my perspective. I am 30 and someone who prefers low risk mutual funds. I use lump sum investment mode and only make investments when the nifty 50 index falls below 11 % from it's all time high. The amount which I could have invested through SIP, I keep them in a separate Sweep in FD which can be broken upto 50% of amount without any loss in interest. I don't touch this FD. Whenever markets go below 11%, I put the money in this FD into Nifty 50 Index, Nifty next 50 Index and Nifty small cap 250 index. My investment ratio is 60 % nifty 50, 25 % nifty next 50 and 15 % small cap index.

I also try to keep 10 % of my portfolio in Gold ETFs too.

Hope this helps.

[deep_bang]

I have a question on saving tax on Debt funds.

I am in a situation where my son has just turned 18 and will be studying for another 4 years atleast. I plan to move some of my funds to him, with the intention of reduced taxes.

If I keep it in my name, some funds which I have bought pre-apr 2023, I will need to pay 12.5% as long term capital gains tax. For funds that I bought after apr 2023, I will be paying at 30% slab rate. The intention is to avoid this tax as my son won't be earning anything yet and can avoid the tax liability upto 12 lakhs of income from debt mutual funds. Is there any hole in this theory?

Even to move the funds i will have to pay 12.5%/30% right now but the idea is to avoid tax for the next 4 years.

The portion of the debt funds that I plan to keep till my retirement - I plan to continue to keep these under my name so I can withdraw after retirement and hope to have a fairly low taxation on these.

[srvm]

Originally Posted by deep_bang

I have a question on saving tax on Debt funds.

I am in a situation where my son has just turned 18 and will be studying for another 4 years atleast. I plan to move some of my funds to him, with the intention of reduced taxes.

If I keep it in my name, some funds which I have bought pre-apr 2023, I will need to pay 12.5% as long term capital gains tax.

Are you sure about this (bold text)?
I thought taxation was 20% after indexation (for pre-Apr 2023 LTCG from debt funds).

Originally Posted by deep_bang

For funds that I bought after apr 2023, I will be paying at 30% slab rate. The intention is to avoid this tax as my son won't be earning anything yet and can avoid the tax liability upto 12 lakhs of income from debt mutual funds. Is there any hole in this theory?

My guess is that the Taxman will ask your son for his source of income (I mean the amount invested in his name, not the gains accrued).

[deep_bang]

Originally Posted by srvm

Are you sure about this (bold text)?
I thought taxation was 20% after indexation (for pre-Apr 2023 LTCG from debt funds).

I believe this was true until 2024 budget where that was changed again for funds bought before Apr 2023.

Here is one article about this:
https://www.indiatoday.in/business/s...430-2024-08-22

Originally Posted by srvm

My guess is that the Taxman will ask your son for his source of income (I mean the amount invested in his name, not the gains accrued).

Yes. So assuming the taxman asks my son, is it a problem if i gift the money to him? Since we are blood relatives, i thought this is perfectly legal. However, i would like to hear more about this.

[skumare]

Originally Posted by deep_bang

...I will be paying at 30% slab rate. The intention is to avoid this tax as my son won't be earning anything yet and can avoid the tax liability upto 12 lakhs of income from debt mutual funds. Is there any hole in this theory?

I guess LTCG/STCG are non-taxable to the extent where income is less than standard deduction, you may google further on this.

Even to move the funds i will have to pay 12.5%/30% right now but the idea is to avoid tax for the next 4 years.

You can demat them and transfer to your son's demat account as gift with no liability of tax till he redeems them.