Invest In Liquid Funds For Emergency

Queries

Parth Singh, Email

I am an IT professional, earning an annual salary of Rs 15 lakh. I recently incurred a short-term loss of Rs 4 lakh in the equity market. How can I offset this loss?

You can refer to Section 71(3) of the Income-tax Act, 1961, if you have a loss under the head “capital gains” that cannot be set off against any other head of income. However, such short-term loss can be set off against not only short-term but even long-term capital gains for the next 8 years, i.e. until Tax Year 2032-33.

But you must take two precautions, file the current year’s income tax return (ITR) by the due date. Also in the next year when the Income-tax Act, 1961 gets replaced by the Income Tax Bill 2025, as announced in Union Budget 2025, then you need to transit such loss appropriately if not done already.

Vivek Jalan, Partner - Tax Connect Advisory Services LLP

Dikshit Tyagi, Email

I am 25 and recently started working. I want to invest Rs 25,000 per month. How much should I invest in mutual funds, stocks and bank deposits? I am staying with my parents and have my own health insurance policy of Rs 3 lakh and a term plan of Rs 5 lakh along with a health policy of Rs 4 lakh provided by my employer. I am also contributing to the Employees’ Provident Fund (EPF).

Investing 70 per cent (`17,500) in equity mutual funds offers growth potential. On the other hand, a mix of index, large-cap, flexi-cap, and multi-asset funds can provide stability. Those willing to take risk can add a mid-cap fund to this mix as they have the potential to improve returns.

Around 20 per cent (`5,000) allocated to debt instruments like corporate bond funds or dynamic bond funds, will offer a cushion alongside your EPF contributions.

The remaining 10 per cent (`2,500) should be placed in a liquid fund or high-interest savings account to build an emergency fund, ideally covering 6-9 months of expenses.

For insurance, the `7 lakh health cover should be increased to `10-15 lakh using a super top-up plan. The `5 lakh term plan is inadequate; a `1 crore term plan is recommended for stronger financial protection.

Defining your financial goals and reviewing mutual fund SIPs regularly will ensure your investments align with long-term objectives.

Col Sanjeev Govila (retd), Certified Financial Planner, CEO, Hum Fauji Initiatives

Amit Anand, Email

I am currently buying an apartment in Powai, Mumbai. My agent is asking me to sign an agreement to sale and make a certain percentage of the payment. Is this a common, and mandatory practice? What is its purpose, and at what stage of property buying does one need to sign it? What things should I consider before signing it?

Signing a sale agreement is a common and crucial step in the property buying process. While not legally mandatory, it serves as a legal contract between the buyer and the seller. The agreement outlines the total purchase price, payment schedule, possession timeline, and penalties in case of default or delays.

It is usually signed after price negotiations. At this stage, buyers typically make an initial payment, which is often around 10-20 per cent of the property value. Before signing, it is essential to verify the property’s title, encumbrance status, and approvals to ensure there are no legal complications. If the apartment is under construction, check the possession timeline and penalty clauses for delays.

Sunil Dewali, Co-CEO of Andromeda Sales & Distribution Pvt Ltd