Priyam Das, Email
Q. I have accumulated a few bars of silver over time. I want to gift them to my nephew as his wedding gift this coming summer. The bills are all in my name. Do I need to write a Will as well while transferring the bars to him along with the bills?
A. There are no liabilities on gifts received from an immediate member as covered by Section 56 of the Income-tax Act, 1961. A gift of more than Rs 50,000 is to be reported by your nephew to the authority for income tax. Your transfer must also be attached with a gift deed in your name, with bills.
Uma S Chander, CFP® Handholding Financials
1 July 2025
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Radhey Singh, Email
Q. I want to start investing in mutual funds. Should I consider debt or equity mutual funds? Which will give a higher return? What all factors should I consider while choosing a fund?
A. Choose debt and equity funds according to your time horizon, risk appetite, and financial goals. Equity funds offer more returns in the long term, 5-7 years, or more. It does have some volatility in the short term and, hence, is best suited for your retirement planning or children education plans. Debt funds work better with short-term plans (less than 3 years). You must ensure that investment decisions match with the goals for which it has been made. In case of a bigger portfolio you may take professional advice from a certified financial planner.
Mukesh Saini, Email
Q. What is a term plan with return of premium benefit? Is it financially prudent to buy a plain vanilla term plan that provides only death benefit or one with a return of premium benefit?
A. A term plan with return of premium provides life coverage and refunds the premiums if the policyholder survives the term. However, it is more expensive than a plain term plan. Instead of paying higher premiums, you can invest the saved amount in mutual funds for better long-term returns.
This type of plain term plan may be complemented by a critical illness rider and a personal accident policy. This will provide full cover on death, critical illness, or accidents that might temporarily or completely stop the earning potential.
Suhel Chander, CFP® Handholding Financials
Sweta Kapoor, Email
Q. I want to invest in mutual funds. Should I go for a systematic investment plan (SIP) or a flexible investment plan, where I can make a regular investment at a frequency of my choice?
A. SIP is a good investment option for monthly mutual fund investments since it uses rupee-cost averaging to buy units at different market prices, which may eventually help in lowering the average cost. This encourages financial discipline since investing in an SIP happens automatically, and there is less likelihood of skipping payments, unless you are redeeming the whole amount. It smoothens out market volatility, and historically, returns tend to be positive. On the other hand, flexi investment plan may give you freedom to invest at your will, but you may end up missing payments. Therefore an SIP is always preferred investment tool for steady and disciplined investing.
Varsha Tiwari, Email
Q. How important is it to consider expense ratio while investing in mutual funds?
A. When investing in mutual funds, it is not only the investment goals and horizon that one should consider, the expense ratio should also be looked at. Returns for short-term goals (1-3 years) are likely to vary between 6 and 8 per cent per annum, while the target period of 4 to 8 years may lead to returns of 8 to 10 per cent per year, and investments of above 8 years may range over 12 per cent. Although the expense ratio directly impacts your net returns, a higher ratio may be justified if the fund performs well. It is essential to equate the expense ratio of the fund with its performance to meet your financial objective. It is always advisable to consult a professional financial planner who can help tailor the right approach for you according to your needs.
Hina Shah, CFP® LUHEM3. Financial Coach & Mutual Fund Distributor
