Essential Tax-Saving Guide

Are you one of those investors who barely finds time to make their Section 80C investments through the year and scrambles to make last-minute choices in February and March? Well, you'll be happy to know that you're not alone. Data from AMFI tells us that equity-linked savings schemes (ELSS) saw 51 per cent of their full-year inflows bunched up in the January-March quarter last year. Such unplanned investments cost your wealth-creation plans dearly in the long run. After all, for many middle-income investors, the Rs 1.50 lakh invested in 80C options makes up a sizeable chunk of their yearly savings. If you've been guilty of such hasty and unplanned 80C investing, don't worry. You have a great opportunity to do better this fiscal year 2019-20. Here are five ways in which you can rejig your 80C investments so that they make a bigger contribution to your long-term financial goals. 1. Put returns first If you compare 80C investment options on returns, market-linked products such as the NPS and ELSS offer the best return potential as they add an equity kicker to your tax-saving investment. As timing makes a difference to your equity returns, use systematic investing to phase out your 80C contributions to ELSS and the NPS over all 12 months of the year. A yearly investment of Rs 1.5 lakh in an endowment plan earning a 6 per cent annualised return for 10 years will lead you to a corpus of Rs 19.8 lakh at maturity. But invest

This article was originally published on July 29, 2019.