Use SWP after exhaustion of senior citizen scheme for monthly income

I am interested in investing an amount of Rs 15 lakh by this month’s end as my fixed deposit (FD) is getting matured by October 15, 2017. As the fixed deposit rates are very low, please let me know a way to invest whereby I would be getting a reasonable income. Please lend me investment advice on this.
-Neelakantan

To answer this query, I would need far more information such as your age, your risk profile, your objectives from the investment, the time frame for which you wish to hold the investment, liquidity requirements, your other investments, taxable income, etc.

If I was to make assumptions that you are a senior citizen and are a conservative investor with non-taxable income, I would recommend that you go in for the Senior Citizen Saving Scheme 2004 that is available through leading public sector banks. It currently provides 8.30% per annum (p.a.) interest payable every quarter and the scheme is for five years extendible to eight years. If you have already utilised the scheme, you could look at investing in highly-rated short-term mutual fund debt schemes in their growth option. These funds typically do not have exit load. You can withdraw the amount as a systematic withdrawal plan as per your needs and the tax impact will be very low as compared to a bank fixed deposit. The return you get from such schemes will compare with the bank fixed deposits from time to time. Since the interest rate will be variable, you need to use this scheme after you have exhausted your senior citizen saving scheme entitlement. All the mutual fund house have such schemes. In case of ICICI

Prudential mutual fund you can look at ICICI Pru Flexible income plan or ICICI Prudentail banking and PSU debt fund plan.

If you are willing to take a little more risk and want to make some provision for inflation going forward you should have some element of equity in your portfolio. The equity saving funds that typically have equity exposure of around 15-25% and are treated as equity oriented fund for tax purposes can be a good option. In this category you can look at HDFC equity Saving fund , ICICI Prudential equity Income fund or Kotak Equity saving fund.

In all cases I would suggest that you seek professional advice about your entire portfolio not just those elements of it which are falling due for redemption now. This will help you in taking an overall view of your entire portfolio and you can map out a plan to align the portfolio to your needs and risk taking ability.

I am in the process of registering a flat purchased in Mumbai. My mother is a co owner of the current flat that I live in along with my father. Would like to know if my mother becomes co-owner of the flat that I purchase, will I be eligible for PMAY scheme, since I do not own a house?
-Aaron D’Souza

Since you are not married and your personal income is below Rs 6 lakh per annum, you cannot independently qualify for the middle income group scheme of the Pradhan Mantri Away Yojana (PMAY) which is for those whose income is above Rs 6 lakh per annum.

You also do not qualify for the lower income group scheme as well as the economically-weaker section of the PMAY scheme since the joint income of your parents and yourself is above Rs 6 lakh and in any case your parents already own a house.

I have been reading your articles/advise for better financial management. I am likely to get a big chunk of money say around Rs 35 lakh as arrears of my pension after winning the case in SC. I wish to give about Rs 10 lakh to my daughter who resides in Dubai. I do not want to break any law, none what so ever. Any tax liabilities - min. If there is. I wish to clarify that I want to send this money to her in Dubai. Please advise accordingly.
-Sagar Malhotra

I have not fully understood the question. Also for the purpose of this answer, I have assumed you are a resident Indian both for tax purposes as well as Foreign Exchange Management Act (Fema) purposes. As far as tax on the arrears of pension is concerned it is likely to be deducted at source by the paying organisation if tax is payable on such arrears. In any case whether they deduct this amount or not you may be liable to file your income tax return and report the receipt of these arrears and pay tax due on that, if any, after claiming relief that you might be entitled to under section 89.

As far making a gift of Rs 10 lakh to your daughter is concerned there is no tax implication of the gift either on you or your daughter in India. To the best of my knowledge there may not be any tax implications in Dubai as well but this needs to cross checked with a tax practitioner in Dubai. As a resident of India you can remit upto $2,50,000 (approximately Rs 162 lakh) every year under the liberalised remittance scheme for various purposes including gifts to relatives so you should not have any problems in remitting Rs 10 lakh to your daughter in Dubai.