Should I invest Rs 2,000 every month in a single tax saver fund or more?- S S Kedar
Tax planning funds seek to provide long term capital appreciation by predominantly investing in equities and to facilitate investors seek tax benefits. The fund is suitable for investors who are keen to invest in a diversified portfolio as well as who want to take advantage of the tax benefits.
For the sum you are planning to invest, a single fund such as Fidelity Tax Advantage or Canara Robeco Equity Tax Saver are good funds to invest in.
However, do remember that under the Direct Tax Code (DTC) regime which comes into effect from April 1, 2012, no deductions will be available for investments into equity linked savings schemes (ELSS). Plan your investments appropriately to get the most of tax breaks in these funds till then.
This article was originally published on July 29, 2011.
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