Best tax-saving options for you

In the second part of the story, we discussed the best tax-saving options available for you as per your needs. Now let's continue further. Seeking accumulation but prefer some cushion from market volatility Imagine how someone on a saatvik Indian diet would react if served burgers and fries! People who have never invested beyond the PPF and tax-saving bank deposits react the same way when asked to switch to ELSS. While one should go for stuff as per one's risk appetite, it's more important to have a more balanced view. Don't make the mistake of looking at your tax-saving investments in isolation. They should be part of your overall portfolio. So, putting the entire tax-saving investment in an ELSS should be perfectly fine for someone who has sizeable other investments in fixed-income securities. However, if you don't have other savings and are not comfortable with a high allocation to equity, other features such as returns and liquidity become more important. When it comes to the other tax-saving options, liquidity and returns are directly related. Schemes that offer the highest returns also have longest lock-in periods. As the lock-in comes down, the returns offered are lowe

This article was originally published on March 15, 2022.