Investing in Real Estate for Minors
As per the tradition in Indian society, when a child is
born, relatives etc. give him money or other things as a gift. Thus, many times
the parents of the child have got a substantial amount of cash, what do they do
with this cash?
Some people even get the account opened in the name of the
child and make a fixed deposit of that money by becoming the guardian himself.
There are some grandparents who, after opening an account in the name of their
minor grandchildren, keep depositing some amount in it every year as a fixed
deposit and later pass it on to their grandchildren. In my banking service of
ten years, I have come across many people who often come to the bank only to
get fixed deposits in the name of their grandchildren. There are two reasons
behind this, the first reason is the emotional connection, while the second
reason is the investment planning for the future of the child.
Nowadays parents are showing a lot of awareness about the
future of their children. Funds are needed to provide elementary education to
young children; Gradually as they grow up, money is spent on arranging higher
education for them. In addition, when boys and girls reach the age of 21 to 25,
there is a need to raise funds separately for their marriage.
That is to say, when the children reach the age of 18, the
parents need money for their education as well as marriage. In such a
situation, it becomes necessary for the parents to plan for the future of their
children in such a way that they will be able to shape their own future when
they attain adulthood.
While making financial plans for children, sometimes the
insurers also stumble in the middle. The insurance consultant advises the
parents to buy an insurance policy in the name of the child and keep on
collecting the premium every year till the child attains majority. He further
states that by the time your child is an adult, enough money will be added for
his higher education and marriage.
Also, he adds one more thing to it that in the event of
death of the parents, the sum assured will be paid to their heirs and the
remaining premiums of the policy will be paid by the insurance company itself,
and when the child attains majority, he/she will get this investment. will get
a return. But, my friends, insurance is not meant for investment. It would be
better to buy a term plan in your own name than to buy such an insurance plan.
Now, based on my long experience in banking and real estate,
I am going to tell you what the best investment you can have for your minor
child! There is no better investment option in the world than buying and
putting a plot in the name of your minor child. This plot can be of any type -
residential or agricultural. This investment can range from 1 lakh to 10 lakh
rupees, according to your capability.
As we have already discussed with you about section 64 of
the Income Tax Act; Since no income will be earned from the vacant plot, you
will not have to pay any tax for the child till he is a minor.
Here it has to be kept in mind that the condition of the
plot you buy is important. For this, choose an area where there is no
development activity on the spot, but there is good potential for development
in future. So, start your journey into the beautiful world of investing by
introducing Gold Invest in the name of your minor child today.
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