| Making investments that enables one to save on income tax is one of the commonest and yet one of the least well-planned investments. Most of us are happy that the tax-saving investment we make has saved tax. Whether it suitable as an investment or not is generally not thought about. Why does this happen? The basic reason is that there is a confusion of goals between saving tax and making investments. The typical investor makes this decision either in late March under the duress of having the deadline slip by. At the end of the day, we may make sub-optimal investment decisions and even if we realise it, we console ourselves by saying that that at least we got tax benefits. This duality of concerns—tax as well as investments—prevents clear-headed thinking about just exactly what one is getting out of an investment. However, these investments should also be treated as actual investments. The investment part—the returns we get should be considered as important as the tax we save. For example, if you otherwise do not need to invest in a traditional fixed return avenue, but would rather invest in equity, then you can do so in your tax-saving investments as well. In fact, going in for traditional tax-saving instruments like PPF, fixed-return deposits carry the disadvantage of long lock-in periods ranging from five to fifteen years. By contrast, Equity Linked Saving Schemes(ELSS) can offer all the wealth building opportunities of equity funds, coupled with the same tax-saving, with a lock-in period of just three years. Birla Sun Life Mutual Fund offers investment solutions that help you grow your wealth with equity while savings taxes, all with a shorter lock in than traditional tax-savers. | ||||||||||||
| Key benefits of saving tax by investing in an ELSS scheme by a mutual fund | ||||||||||||
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| The Financial Solution (Save Tax and Create Wealth) stated above is ONLY for highlighting the many advantages perceived from investments in Mutual Funds but does not in any manner, indicate or imply, either the quality of any particular Scheme or guarantee any specific performance/returns. |
NHAI, PFC file prospectuses, coupon rate not yet decided MORE debt investment options have opened up for investors with AAA rated tax-free bonds worth over Rs 14,000 crore lined up. The National Highway Authority of India ( NHAI ) and Power Finance Corporation ( PFC ) are offering Rs 10,000 crore and Rs 4,033.13 crore worth of tax-free bonds, respectively, as per prospectuses filed with the Securities and Exchange Board of India (Sebi). Of a Rs 5,000 crore issue by PFC, Rs 966.87 crore has already been raised through private placement on September 28 and November 1. Tax-free bonds give investors tax-free return on any amount invested. In another kind of bonds, the long-term infrastructure bonds, investments up to Rs 20,000 are tax exempt, that is this cap amount can be deducted from the taxable income. Accordingly, the NHAI prospectus has clarified that only the amount of interest from -and not the actual investment on -its new bonds will be tax-free. "NHAI's publ...
