Is this right time to invest in tax saving mutual funds, especially when the Sensex is around 16000? Which fund should I invest in and should it be in lump sum or through SIPs?
- Ruchira Sharma
Investments in tax planning funds qualify for deductions under Section 80C up to Rs 1 lakh in a financial year. Your investments in these funds should be largely governed by this factor alone. The direction of the markets cannot be correctly predicted, at best you can use such opportunities to invest during dips as a tactical move with your investments and continue investing regularly to ride market cycles over the long term. You can consider investing in Fidelity Tax Advantage or Canara Robeco Equity Tax Saver, which are both five star rated and consistently performing tax planning funds. You can either go for a lump sum investment each financial year or SIP investments keeping in mind that the lock-in for your investments would expire at different points in time.