Post DTC, tax planning funds will function like any other diversified equity fund post
04-Mar-2011 •Research Desk
I have an SIP of Rs 3,000 in Fidelity Tax Advantage which I started in April 2010. I now wish to invest an additional Rs 20,000 for tax saving. Which fund do you suggest? Also, with DTC coming into effect in 2012, what will happen to this ELSS investment? Should I continue with this ELSS fund or stop investing?
- Sujit Kumar
In Fidelity Tax Advantage you have selected a fund that is highly rated by us and has a good performance history. You can invest the additional Rs 20,000 that you plan to invest in the same fund or opt for Canara Robeco Equity Tax Saver, another 5-star rated fund. As you still have over two months to invest for availing Section 80C benefit, you should stagger your investments.
Tax benefits on ELSS will cease to exist once DTC is enforced. How AMCs will treat their existing tax planning funds remains to be seen. However, you will get Section 80C benefits in any ELSS investment that you make before April 2012.