April 2020

Guardianship questions tend to surface at the worst possible time, usually when a family is already dealing with a death, disability, or separation, which is exactly why understanding the framework beforehand matters.

Under the Hindu Minority and Guardianship Act, 1956, which applies to Hindus, Buddhists, Jains, and Sikhs, the natural guardian of a Hindu minor is ordinarily the father, and after him, the mother, for the minor’s person as well as their property, with some nuance depending on whether the child is legitimate, illegitimate, or adopted. This has been the subject of judicial interpretation over the years, including Supreme Court rulings clarifying that “after” the father doesn’t necessarily mean only after his death, but can extend to situations where the father is absent or indifferent, giving courts room to prioritise the child’s welfare over a strict reading of sequence.

The Act also allows a father, and in his absence a mother, to appoint a testamentary guardian through a will, who takes over guardianship duties if both natural guardians are no longer available. This is a frequently overlooked planning step: without a testamentary guardian named, the question of who cares for a minor child, and who manages any property or assets left to them, can end up before a court rather than being settled by the family’s own wishes.

Guardianship under this Act covers both the person of the minor and their property, but property belonging to a minor generally can’t be dealt with by a guardian without prior court permission in specific transactions, such as transferring immovable property, which is a safeguard against misuse.

This is one of those areas where a document written calmly in advance does far more good than any decision made under distress later.

Ashutosh Financial Services frequently discusses guardianship provisions as part of broader estate and succession planning conversations. Ashutosh Financial Services continues to run educational sessions on succession and guardianship matters for Hindu families in India and abroad.

Fixed deposits are the default answer most people reach for when they want predictable returns, but they’re far from the only option, and they’re not automatically the best one for every situation.

Bank fixed deposits offer simplicity and near-universal familiarity, with returns that are fully taxable at the investor’s slab rate, and rates that move with the broader interest rate cycle. Corporate fixed deposits, offered by companies and NBFCs, generally offer higher rates than bank FDs to compensate for the additional credit risk, since they aren’t backed by the same deposit insurance framework and depend on the issuing company’s financial health. Government-backed instruments like the Senior Citizens’ Savings Scheme or the Post Office Time Deposit offer sovereign-level safety along with fixed returns, though they come with eligibility conditions and lock-in periods specific to each scheme.

Debt mutual funds occupy a different space entirely. They aren’t “fixed” in the strict sense, since returns fluctuate with the underlying bond portfolio’s performance, but certain categories, like target maturity funds, are built to behave somewhat like a fixed-maturity instrument if held to term. Their tax treatment has also changed in recent years, with debt fund gains now taxed at slab rate regardless of holding period for investments made after the relevant Finance Act 2023 changes, which has narrowed the gap between debt funds and fixed deposits from a tax perspective.

For NRIs specifically, NRE fixed deposits carry a distinct advantage: the interest is exempt from Indian tax, unlike NRO deposits or most other fixed-return instruments available to residents.

Choosing between these isn’t just about which offers the highest quoted rate. Credit quality, liquidity, tax treatment, and how the return actually compares after tax all matter more than the headline number.

Ashutosh Financial Services regularly helps investors compare these options properly rather than by rate alone. Ashutosh Financial Services’ educational programmes cover how to evaluate fixed-return instruments beyond the advertised yield.

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