Planning early saves you from hasty investment decisions at the end of the year...
22-Apr-2013 •Research Desk
I want to take full advantage of 80C deductions in the income tax calculation for FY 2013-14 by investing remaining amount of around Rs 40,000 in ELSS funds. Last FY 2012-13, I invested a small amount in Axis Long Term Equity Direct Growth fund in March,13. In order to have diversification of funds, please suggest at least two other good dividend or growth oriented ELSS funds for current year or should I continue with my present existing ELSS fund. I am a retired person in the tax bracket of 20 per cent and want to invest through SIP route.
- Dilip Sahi
It is good to plan your investments at the start of the financial year, rather than invest mindlessly at year end.
You can continue with your investment in Axis Long Term Equity fund and consider diversifying in Canara Robeco Equity Tax Saver fund and Franklin India Taxshield fund. Both are five-star rated funds with five-year returns at 11.6 per cent and 8.5 per cent respectively. Also, you can use the fund select tool on our website to know about more tax saving funds.
Equity Linked Savings Scheme (ELSS) funds invest a minimum 65 per cent in equity and are notified to avail tax benefits under Section 80C up to Rs 1 lakh in a financial year. These mutual funds have a three-year lock-in, which is the least among the available investment instruments that qualify for tax savings. ELSS returns are tax-free like all long-term equity returns, which means there is no tax on the profits or gains after the lock-in with these investments.