Should you invest in your child's name?

Every parent desires to fulfil their child's dreams and give them a head start in life. Whether it's studying at a prestigious university, launching a startup, or a dream wedding—all goals can be secured by smart financial planning today. While equity mutual funds are a proven way to build serious wealth in the long term, a dilemma many parents face is whether they should invest in their child's name. There are both upsides and downsides to it. We have explained them below to help you make an informed decision. The upsides 1) Tax savings: Until your child turns 18, realised gains from the mutual fund will be considered your income and taxed accordingly. However, once they turn 18, the tax liability shifts to your child. They will be required to pay capital gains tax on the investment. In case of long-term capital gains from equity funds, they will bene

This article was originally published on November 06, 2024.