Investing in mutual funds in minor name
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I want to start investing (will buy only index fund slowly) in my two children's name. Children are 1 & 6 year old. Reason is to reduce taxes. If any units are sold in future when they turn major, it will show in their income. If they are in my name it will get clubbed with my income and get taxed higher. I know we need to open minor bank account and money can be transferred only from that account to buy the units.
Anyone investing in their children's name? What is your setup like? Which banks are the easiest to open minor account and provide netbanking without any transfer limits.
Thanks for your help!
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I believe his goals are aligned for when his kids become 18+ major, so that the LTGC then will be applicable on his kids, not his name by then... Till they are minor, if redeemed, all taxes will be borne by him, but once they are adults, they will be accountable for that.
@dcb_lover Since your goals are at least 10-15 years, go for stable nationalized banks and same goes for index fund amc.
LTGC is 10%... so be it on your name or your son...you will end up paying 10% tax.
Unless you are looking for tax harvesting or trying to have gain within exemption limit(who knows what rule will change after 12 years)