Like music to your ears – Isn’t it? Kind of like “investing” is music to our ears!
When you’re a young professional and you start earning, there are a lot of things you have to figure out –personally, professionally, and financially. The financial aspect of things includes spending (duh!) … but also – budgeting, investing, saving … and most importantly – paying taxes!
Before we get ahead of ourselves – keep in mind that individuals who are earning under ₹2.5 lakhs are exempt from paying income tax. However, if you are earning more than that, then you are eligible to pay taxes – and investing in tax-saving mutual funds is a good way to –
So, we thought we’d share some of the basics about tax-saving mutual funds with you, and leave you with a few popular options to check out. Let’s not waste any time! Tax-saving doesn’t just happen on its own!
We’ll start with the most fundamental question – What are Tax-Saving Mutual Funds?
Tax-saving mutual funds, also known as Equity Linked Saving Schemes (ELSS), are a segment of mutual funds that offer tax benefits to the investor, under Section 80C of the Income Tax Act in India. Think of ELSS as equity funds that are a double-edged sword – they allow investors to accumulate appreciating capital while cutting them some slack on their taxable income!
Disclaimer: Under Section 80C of the Income Tax Act of India, a maximum of ₹1.5 lakhs can be exempt from tax, if invested in any tax-saving mutual fund, or ELSS fund.
Features of Tax-Saving Mutual Funds
Apart from offering dual benefits to investors, tax-saving mutual funds also have certain unique features – which can be beneficial and good to know about. Here, we have identified three such key features that all popular tax-saving mutual funds in India have –
And there you have it – three key features that make tax-saving mutual funds an advantageous and lucrative option for investors. As far as we’re concerned, saving tax and investing are both winners – so you really can’t go wrong here!
Benefits of Tax-Saving Mutual Funds
Let’s take a more in-depth look at some of the benefits that make tax-saving mutual funds such a winner in our eyes –
Ultimately, the takeaway here is that these three key advantages make tax-saving mutual funds a superlative option for investors, old and new!
Popular Tax-Saving Mutual Funds in India
It is important to always remember that returns mutual fund investments carry an inherent risk, as they are influenced by a number of factors and are susceptible to market fluctuations. It is important you do your due diligence before picking an ELSS fund that fits your financial goals well.
Here are some of the popular tax-saving mutual funds in India today –
Be sure to gauge your investing capacity and risk appetite before investing, and use the tax-saving mutual funds that are available in the market to help you save some tax, and further your financial goals.
Tell us in the comments – what are some of the best ELSS funds with high returns?