Tuesday 22 November 2011

[www.keralites.net] Mutual Fund Tax Savings Schemes (ELSS)

 

 
As the tax savings season approaches, all tax payers will be planning to make their savings in various financial instruments which offer tax benefits under Section 80C and other relevant sections of Income Tax Act 1961.  Probably this will be the last year when investment in these equity savings schemes is possible. If the government manages to pass the new Direct Tax Bill in the winter session of parliament as promised, then this year is the last one when you can save taxes with an equity investment of only three years' lock-in. From next year onwards, the only way to save tax with equity investments will be through Tier I NPS deposits, which will be locked in till retirement.  So this year may be the last chance for you to invest in Mutual Fund Equity Linked Tax Savings Schemes (ELSS) and avail tax benefits u/s 80C.
In my assessment this is a good time to invest in ELSS with the three-year lock-in period. Investing in equity always makes sense when the markets are as beaten down and likely chance to come down further.  Still you have four months to left out to save for this financial year.  It is recommended to investment in ELSS mutual fund schemes in four to six installments to avail the maximum benefit cost averaging.
The following five ELSS are good for investment  
1)     Franklin India Taxshield
2)     Fidelity Tax Advantage
3)     Religare Tax Plan
4)     ICICI Prudential Tax Plan
5)     HDFC Long Term Advantage
 
Best Regards
Prakash Nair

www.keralites.net

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