Where should I invest Rs 3.6 lakh for the long-term to get 12% return?

economictimes.indiatimes.com:

I expect to receive around Rs 75 lakh from the sale of an apartment. I do not intend to invest in another property. How do I invest this lump sum in financial instruments? I am 47 years old and want to adopt an aggressive style of investing.

Naveen Kukreja, CEO and Co-Founder, Paisabazaar.com: You should first check for possible long-term capital gains (LTCG) tax liability arising from the sale of your apartment.

Section 54EC of the I-T Act allows taxpayers to reduce tax liability by investing LTCG of up to Rs 50 lakh from property sale in specified bonds of REC, PFC and IRFC within six months of the sale. These bonds have a lock-in period of five years and generate a taxable interest income of 5.25% annually.

Instead of opting for these bonds, which offer low post-tax returns, one can choose to pay the LTCG tax and invest the LTCG component in high-return instruments like equity funds. You can also use the sale proceeds to build or boost your emergency fund to meet unavoidable monthly expenses for the next 6-12 months.

Park these funds in fixed deposits of scheduled banks offering yields of 7.5% and above. Some of the banks offering high yields include Suryoday Small Finance Bank, Unity Small Finance Bank, Utkarsh Small Finance Bank, Ujjivan Small Finance Bank, SBM Bank, Bandhan Bank and IDFC FIRST Bank.

Also check if you have adequate life and health covers. Your life insurance cover should be at least 10-15 times your annual income to ensure adequate replacement income for your dependants.

Opt for term insurance plans as these offer big life covers at very low premiums. Purchase health insurance cover of at least Rs 1 crore to deal with the rising healthcare costs. Insurers like Niva Bupa and Aditya Birla offer health