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Tax-free Earnings

Long-term capital gains from equity-oriented funds are tax free in the hands of the investor…

I am looking to invest Rs 75,000 per year for a period of about 15 years. I want to build a corpus of about Rs 50 lakh and want my earnings to be tax exempted. What policy would you suggest? -Omprakash Shah

Rs 75,000 earning 18 per cent annually for a period of 15 years will give you a corpus of Rs 55 lakh to Rs 60 lakh if invested in an equity mutual fund. And since there are no tax obligations on long-term capital gains from equity funds, it will be tax-free as well.

Of course, this is assuming that the tax regime doesn’t change for the next 15 years. You should choose a couple of good large- and mid-cap funds, or multi-cap funds and invest in them regularly.

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