Are you looking to create long-term wealth from your hard-earned money? Well, then, you are reading the right article. It is a well-known fact that paying taxes is essential as per the law, and you are an obedient citizen if you do so. However, not many know that the government only allows us to save a hefty amount of money on taxes. Do you know how?
This is where tax saver mutual funds step in. These funds quickly help you save a total of Rs 1,50,000/- under Section 80C of the Income Tax Act. Let’s get to know more about it.
What are tax-saving mutual funds?
Also called Equity Linked Savings Schemes (ELSS), these mutual funds are a special category in our country that offers potential investors a dual benefit of tax savings and the potential for capital appreciation.
These funds are designed to encourage long-term investments in the Indian equity markets while providing tax benefits under Section 80C of the Income Tax Act.
(Tip: Always use a mutual fund calculator before investing.)
What are its advantages?
In addition to offering tax savings of up to Rs 1,50,000, tax-saver mutual funds also provide several other advantages that warrant consideration:
- Short Lock-in Period
ELSS funds come with a relatively short lock-in period of just three years. This duration is the briefest among all tax-saving investments covered under Section 80C. Therefore, if you opt for the best tax-saving mutual fund, you can access your investment after this relatively short period.
- Higher Return Potential
ELSS funds predominantly allocate their investments to equities. This demonstrates the potential to yield superior returns over the long term when compared to other asset classes.
- Professional Fund Management
ELSS funds benefit from the expertise of professional fund managers who oversee and manage the entire portfolio. These seasoned experts possess the required knowledge of the best mutual funds in order to make well-informed investment decisions, taking into account market conditions as well as, most importantly, economic trends.
Which is the best platform to invest in these mutual funds?
Bajaj Finserv. Period. Around a month back, when I was planning to invest in the same, I had gone through the whole web to end up using this application. So, I’ll share my personal experience so the readers can easily understand. Here is a step-by-step guide –
- Download the Bajaj Finserv Application on your smartphone (Android/iPhone).
- Sign up by entering your mobile number.
- On the home page, you’ll see a section for ‘Investment Bazaar.’
- Here, go on ELSS.
- Choose the plan that suits you.
Once you start earning money, it is essential to have knowledge about taxes and how you can save them. Because if you are not an aware citizen, you’ll end up losing the opportunity to save taxes. So, be up to date at every step and invest in the proper manner in tax saver mutual funds so that you and your loved ones can benefit from it in the long run.