Many people tell me tales of their advisers…let me tell you the WORST…
1. Madam your husband had Rs. 46 lakhs in PPF – do not remove it now let it remain there. If you remove it you will lose the benefit of tax free 8% return that you were getting…and you will have to put this in a bank. Bank will pay you 9% but you will have to pay Income tax on that. At least 3 advisers did not know what was wrong.
WHAT IS WRONG ?
There is only one nominee. She cannot do anything other than withdraw – she cannot renew it for say another 5 years, she cannot withdraw partially, she cannot change the branch….and if she dies her son will have to go to court to get a probate…not so easy.
2. Keep the housing loan – after all the interest is tax deductible and the house is appreciating!
Answer: the appreciation of the house has nothing to do with how you funded it. If you have your own money and you have no clue how to get 15% earnings from that, it makes no sense to keep a 12% loan going.
3. Buy as big a house as you can…after all you are doing it once in a life time!
Answer: Buy a house that you can afford by paying AT LEAST 50% of the cost of the house. If you can pay more, even better.
4. Keep money in bank fixed deposits in various branches of different banks, there will be no TDS, – THIS MEANS IT IS TAX FREE.
Answer: this advice is so stupid that the adviser needs to be crucified.
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