I am 57 years old and have property worth Rs 5.35 crore. Should I shift investment to MFs for easier access to funds?

I am 57 years old, with a daughter settled in Canada. My investments are mainly in real estate, including a flat in Mumbai worth Rs 2.75 crore, a flat in Bengaluru worth Rs 1 crore, two flats in Kochi worth Rs 60 lakh, and a shop in Mumbai worth Rs 1 crore. I earn rental income of about Rs 1.5 lakh and have shares worth Rs 80 lakh, mutual funds worth Rs 54 lakh, and fixed deposits of Rs 65 lakh. Given the illiquidity of real estate and my age, should I consider liquidating these properties and investing in MFs for easier access to funds when needed?

Rushabh Desai Founder, Rupee With Rushabh Investment Services: Considering your age, illiquidity of real estate, and the hassles of maintenance, it may be wise to liquidate your real estate investments and shift to mutual funds for greater convenience. Your total real estate investment of Rs 5.35 crore generates only Rs 1.5 lakh per month in rental income, giving an annual yield of just 3.36%. This is significantly lower than the current fixed deposit or AAA bond yields of 7-8%. Additionally, the appreciation of residential properties is uncertain, depending on factors like locality development, property quality, and amenities. On the other hand, equity and hybrid mutual funds can provide better risk-adjusted returns with greater liquidity. Although low-risk investments are advisable at your age, if you are willing to take moderate to high risk for 5-7 years, a diversified portfolio of equity and debt can be a better option. You can create separate equity and debt portfolios for risk mitigation and liquidity, or consider hybrid funds like dynamic asset allocation or equity saving funds.

I am a 70-year-old retired government employee and pensioner. I had invested Rs. 10 lakh in the SBI corporate bonds, but am not satisfied with the returns. Can I switch to the SBI Senior Citizens’ Savings Scheme (SCSS) or the Post Office SCSS for better returns? What will be the tax implications for me?

Sudhir Kaushik Co-founder & CEO, TaxSpanner: You can switch your funds from SBI corporate bonds to the SBI SCSS or Post Office SCSS, both of which offer attractive interest rates for senior citizens. Here’s a brief overview of both options and their taxation details: SBI SCSS Interest rate: Typically higher than many fixed deposits, subject to change. As of now, it’s around 8% per annum. Tenure: Five years, with an option to extend for another three years. Taxation: Interest earned is taxable as per your tax slab. The scheme qualifies for deduction under Section 80C for up to Rs. 1.5 lakh a year, but only for the principal amount deposited, under the old tax regime. POST OFFICE SCSS Interest rate: Similar to the SBI SCSS, it’s around 8% per annum, subject to change. Tenure: Five years, with an option to extend for another three years. Taxation: Interest earned is taxable as per your tax slab. Like the SBI SCSS, it qualifies for deduction under Section 80C under the old tax regime.


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