Tax free stable income

dear sir, one of my relative is having good amount of money in cash and he want to have stable 9-10% return on regular basis, while searching for options, i came to know about bank fd, company fd and MIP plans of Mutual Fund. Please suggest me the way where he can have stable income on regular basis with minimum to low-moderate risk. he can invest 20-25 % part in equity market or in balansed funds of mutual funds with (65:35) ration. Please advise.
Asked 2 years ago in Income Tax from Ahmedabad, Gujarat
You can invest money in tax free bonds of good corporation such as IRFC, Hudco, etc you will get 7 to 8% retlurn, balance by investing in FD,s , mutual funds and equity.
Vijay N. Kale
CA, Hyderabad
248 Answers
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Pl have balanced portfolio, depending upon his age, risk appetite and financial goals. 
B Vijaya Kumar
CA, Hyderabad
633 Answers
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1. Post office Monthly Income Scheme
2. Monthly interest from Fixed deposits
The most famous option is to open a fixed deposit with monthly interest payment. This is simple and one of the safest option one can take.
3. Annuity from Insurance companies
One can also buy annuity plans from LIC or pvt insurance companies. The returns on these plans will depend on the pension tenure and which option you have taken while buying the product (return of principal amount or not). The return of these plans are very low and sometimes not even known in advance like in case of NPS . One should get into this only if you are not capable of doing anything else with your money
4. Govt long-term bonds
One can buy long-term govt bonds with maturity of around 25-30 yrs and paying a half-yearly interest at around 8% (this varies from time to time). These are real long-term bonds and at the end of the tenure you get back your principal amount.
5. Senior citizen Saving Scheme
One of the best option for senior citizens above 60 yrs of age is to put their money in senior citizens saving scheme and get interest of 9% per year which is payable quarterly.
6. SWP from Mutual funds
One can invest in Equity mutual funds or debt mutual funds and opt for a SWP (systematic withdrawal plan) which will liquidate a fixed number of units or portion out of mutual funds and credit it to your bank account. This is reverse of SIP and can be one of the ways of generating an income.
7. Monthly Income plans of Mutual funds
There are mutual funds which are of category Monthly income plans (MIP). These mutual funds have inbuilt structure of providing regular income (not always montly, purely depends on dividend declaration) .
8. Dividends from Equity shares
If you are a stock lover, you can invest in long-term stocks which have good enough dividend paying history. Note that in this way the income is not always guaranteed through dividends, but if you diversify your investments across 10-12 stocks , then you can be assured that there will be regular flow of dividends from some of the other stocks. Also the actual value of your investments can fluctuate as it’s a risky investments . 
9. Dividend from mutual funds
For those who cannot invest in equity directly ,they can opt for long-term mutual funds with dividend payout option , this will make sure they get a dividend income from mutual funds , but that will happen only once a year . It wont be a monthly payout . One should diversify across 3-4 funds to make sure the dividends are coming from different funds.
10. Rent from Real estate
Shiv Kumar Agarwal
CA, Delhi
225 Answers
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For this query you need to contact a mutual fund advisor
Shyam Sunder Modani
CA, Hyderabad
1377 Answers
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