Money Matters

Managing your money can be tricky. Send your queries, and personal finance experts will help you resolve any issue

  • Taxation
Rajesh Uttam Motiramani

I am 50, single, work with the central government and am in the 30 per cent tax slab. I want to gift my niece, who turned 18 on January 29, 2020, a cheque in favour and open an auto-sweep savings bank account in her name with her father/my brother as guardian. (a) Can I get a Permanent Account Number (PAN) in her name? (b) Would it be a normal PAN card? (c) What would be the tax implications for interest earned on such an account - whether interest income up to January 28, 2020, would be clubbed with my brothers income or taxed in the hands of my niece for the whole financial year?

Archit Gupta, Founder and CEO - ClearTax

You can gift money to your niece by cheque. It will be covered under 'gift from a relative'. Relative covers the brother of the parent of the individual (receiving the gift). Hence, the income will not be taxable in the hands of your niece. You can get a PAN for a minor. It is a regular PAN and can be used for investments and other transactions. It will be issued under the signature of the minor's parents. You can open an auto-sweep account in her name with her father as the guardian. However, she will own the account after attaining majority. The income tax law prescribes clubbing of income of minors with income of the parent who is earning more. But these provisions will not apply from the financial year in which the minor turns 18. Your niece will be an adult for FY20. Hence, the interest earned on the auto-sweep bank account will be taxed as her income. If your niece's annual income for FY20 exceeds the threshold of Rs 2.5 lakh, she will have to file an income tax return. There is no need to club your niece's income with the income of her parent from FY20.

  • Health Insurance
Romesh Sahni

I want to buy a health insurance policy for my mother who has just turned 60 and is diabetic. What are the best options available in the market? I am willing to take the co-pay option.

Naval Goel, CEO & Founder,

There are many health insurance plans you can buy for your mother. However, as she is a diabetic, you need to be more careful with your choice. You can go for National Insurance Varishta Mediclaim under which you can get the diabetic cover along with the basic health insurance plan by paying an additional 10 per cent premium. This is one of the best options. Other than this, you can see Star Health Diabetes Safe, Religare Care Freedom, HDFC ERGO Health Energy and ICICI Prudential Diabetes Care. You must check all inclusions and exclusions.

  • Mutual Fund
Meha Gupta

I have two SIPs - Rs 5,000 in UTI Nifty Index (G) and Rs 2,000 in Franklin India Equity Fund (G). So far, I have invested Rs 2,49,000 with gains of Rs 18,300. I am willing to close both the funds and start Rs 5,000 SIPs in the Nifty index fund and the NiftyNext50 index fund. What should I do with the savings so far, a systemic withdrawal for new SIPs or a lumpsum investment? Do you have any other suggestion?

Suresh Sadagopan, Founder, Ladder7 Financial Advisories

You may shift the funds accumulated to Mirae Asset Large Cap Fund. I would suggest a simple cashout with lumpsum investment into the suggested scheme. The new SIPs can be started in Nifty and Nifty Next 50 funds, for a long period, beyond five years.