Uncle's birthday gift of Rs 5,000 worth of equity mutual funds units to his 8-year-old nephew goes viral. Experts advise how to do it

When Gurmeet Chadha, CIO of Complete Circle, attended his nephew’s eighth birthday celebration this Sunday, he found himself facing a dilemma familiar to many adults: what gift could be meaningful, lasting, and different from the usual toys and decorative items? Instead of choosing cakes, bouquets, or showpieces, he decided to take a more thoughtful route.

Chadha gifted his nephew mutual fund units worth Rs 5,100 in a diversified equity fund — a gesture aimed at instilling early financial awareness within the family. Gurmeet Chadha shared this in a recent post on X.

He later shared how simple the entire process was, noting that such gifts don’t require a demat account and can be done offline as well. Many netizens responded with curiosity, asking how they could adopt the same idea for birthdays and celebrations within their own circles.

How to gift mutual fund units to relatives

To help them, he outlined a few basic guidelines. Gifts given within close blood relations have no monetary limit, while gifts to friends and relatives outside the immediate family can be tax-exempt up to Rs 50,000 since they fall under capital assets. He added that the gifting process is straightforward: one only needs to submit a form at the Registrar and Transfer Agent or complete it online through platforms such as CAMS or MF Central, along with KYC details of both giver and recipient.



Several finance professionals also chimed in to simplify the online method further. CA Ronit Pereira said that the steps begin with choosing an investment platform such as Groww, Kuvera, MF Central, or the website of the mutual fund’s Asset Management Company. A parent or guardian needs to create a minor folio by entering the child’s details, including date of birth and identification documents like PAN or Aadhaar if available. Uploading the child’s birth certificate and ensuring the parent’s KYC compliance completes the setup. Once the preferred diversified equity fund is selected, the parent can make the payment through UPI or net banking. The mutual fund units are then allotted in the child’s name with the parent listed as the guardian. The folio can later be shared with family members, who may choose to add investments or set up SIPs over time.

How netizens reacted

The idea struck a chord online, sparking admiration from many who felt this was a thoughtful way to introduce children to long-term wealth creation. Some users appreciated the concept of creating a first asset for a child instead of giving yet another toy that may soon be forgotten. Others joked that birthdays should now come with investments like SIPs, PPF accounts, SSY deposits, or passive ETFs rather than the usual goodies. Even sceptics who wondered what immediate joy such a financial gift brings to an eight-year-old acknowledged that it plants the seed for future financial discipline. One thing was clear: the conversation highlighted a growing trend in Indian families toward gifting that grows in value rather than gathers dust.