I will receive gratuity of Rs 3 lakh; is this gratuity amount taxable?
My wife is 35 years old and has been working for 13 years. She is planning to quit work and will receive a sum of Rs 3 lakh as gratuity. She has a high risk appetite. Can you suggest some mutual funds or stocks for investing this amount? Also, will the gratuity be taxable?
Rushabh Desai, Founder, Rupee With Rushabh Investment Services: Given your wife’s age, high risk appetite, and long-term investment horizon of more than 10 years, a portfolio with 50-60% in flexi-cap funds, 20-25% in mid-cap funds, and 20-25% in small-cap funds is ideal for wealth creation.
Since mid- and small-cap markets are highly valued right now, you can invest the Rs 3 lakh in flexi-cap funds like Parag Parikh Flexi Cap, Franklin India Focused, and Invesco India Contra. Later, add mid- and small-cap funds for growth. SIPs are recommended for lump-sum investments during market corrections for better returns.
Gratuity is a benefit given by the employer to employees. A recently approved amendment by the government has increased the maximum limit of gratuity. Now it is tax-exempt for up to Rs 20 lakh from the previous ceiling of Rs 10 lakh, which comes under Section 10(10) of the Income-tax Act.
I am 28 years old and have a portfolio of Rs 47.4 lakh, with Rs 36.5 lakh in equity and the remaining in mutual funds. I have been consistently contributing Rs 25,000 per month through SIPs, with a 10% annual increase in mutual fund investments. I have no liabilities. I would like to invest an additional Rs 10 lakh either in similar instruments or diversified options, with the goal of growing my total portfolio to Rs 1 crore by the time I turn 30 years old. How can I do this?
Manish Kothari, Cofounder & CEO, ZFunds: Your current portfolio of Rs 47.4 lakh,
