I have cash surplus of Rs 12 lakh. Should I use this amount to prepay my parents' home loan of Rs 7 lakh or should invest it? What is a wiser decision in the long term? Where and how should I invest the entire/remaining amount to generate a monthly income of at least Rs 25 - 30k per month? I'm 23 with a moderate risk appetite.
Reply by Balwant Jain, a tax and investment advisor Firstly, tax impacts the decisions to repay a home loan. So in case your parents are claiming tax deduction under Section 80C for principal repayment and under Section 24(b) for interest paid, you will have to take into account the tax impact of repaying the home loan.
