As DTC will take out the tax benefit from tax saving mutual funds, the future of these funds could be uncertain. If I were to invest every month from April 2011 to March 2012 for the full 80C benefit; where should I invest?
— Prateek Bansal
Under the Direct Tax Code (DTC) regime, no deductions will be available for investments into equity linked savings schemes (ELSS). Having said that, one has to remember that the DTC comes into effect only from April 1, 2012. That leaves investors with one more year to make use of this option to invest and claim deductions on.
ELSS is a mutual fund that invests its corpus in equities and has a diversified portfolio across different sectors and stocks. These funds will turn into equity diversified funds post DTC. Read the Category Watch section in this magazine to see our choice of the best tax saving funds.
This article was originally published on May 16, 2011.
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