I want to buy a house. Most of the houses I have seen were under construction. In some projects, there was no activity on ground but bookings were open. Should one book into a project which is under construction?
Rahul Singh

Pankaj Anup Toppo replies - In the current scenario, the best option for you would be to locate a ready-to-move in flat. In most cases, a ready-to-move in flat would come at a premium compared to one that is under construction or where construction is yet to start. However, as we believe you will be using the house for self-occupation, it makes sense to pay the premium and move into the house at the earliest.

In case you are unable to locate a ready-to-move in property, the next best option would be to look at a project where the delivery will happen within the next 12 months. Do not look at anything that exceeds this time frame. Further, before booking, get an idea of the developer’s track record. Most developers have a list of completed projects and the ones that are under construction on their websites. Choose the one with the least backlog in terms of projects under construction.

Another thing you could look at is the list of pre-approved properties maintained by home finance companies. Projects are included in this list only after the necessary due diligence.

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My mother is getting superannuated next month. I would like to invest a part of her Employees’ Provident Fund (EPF) money of Rs 5 lakh in the stockmarket. Will that be a good decision to generate a monthly income of, say, at least Rs 10,000-15,000? Or, is there another way to generate a continuous source of income for her? Please also suggest some relevant covers in view of her age.
Rishi Bajpai

Sunil Dhawan answers - We at Outlook Money suggest that you do not take such a step under any circumstances. After all, it is your mother’s hard-earned lifetime savings. EPF corpus is part of the monthly savings that she accumulated over the earning phase of her life. Investing directly in stockmarkets could be risky as chances of losing the principal are high and, at her age, regaining the capital would be very difficult.

Targeting a monthly income of Rs 10,000 on an investment of Rs 5 lakh is asking for a return of 24 per cent, which looks unrealistic for her to generate at this age. A moderate risk could be recommended for her for a part of the money, but not something which puts the entire capital at risk.

To create an income stream for her, we would suggest that you put the money in debt products such as bank fixed deposits (which give quarterly returns), post office monthly income scheme and Senior Citizens Savings Scheme (which gives quarterly payouts). However, part of the money can be put in balanced funds that give some exposure to equity asset class, in order to counter inflation over the long term.

Also, ensure that she has a health insurance plan to cover her medical expenses. Term insurance could be bought if anyone in the family is dependant on her. It would be ideal to stay away from stocks or Ulips. Ensure that nominations are properly carried out in each of the investments for smoother processes.

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I have Rs 50,000 in a diversified equity fund and in debt funds. What are the tax liabilities if I want to redeem them?
Sandeep Kumar

Kayezad E. Adajania answers - Your equity funds attract no capital gains tax for withdrawals after one year of purchase, but you will have to pay a short-term capital gains tax of 15% (if withdrawn before one year). Debt funds attract a long-term capital gains tax of 10% before indexation or 20% after indexation for redemption after a year. Their short-term withdrawal (before one year) will be taxed as per income tax rates.