I am new to mutual fund and want to invest Rs 20,000 a year to save on taxes. Could you advise me on the various funds I should invest in?
- John
Investing in tax planning funds is a smart way to reduce tax liability and also gain from equity investments. Tax planning funds are a category of mutual funds in which investments up to Rs 1 lakh in a financial year qualify for tax deductions under Section 80C. Investments in these funds have a three year lock-in, which you should be aware of. Moreover, investments in these funds will enjoy tax benefits only till March 31, 2012 because after that the direct tax code comes into play within which the fund category loses the tax advantage. You can look at investing in Canara Robeco Equity Tax Saver or Religare Tax plan, which are both highly rated funds with proven track record and performance history.
This article was originally published on October 11, 2011.
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