Prajna Capital - An Investment Guide

AT A time when most people are getting impacted by rising inflation and poor returns on their investments, tax planning assumes great importance. Most people look for avenues that would help them not only evade the claws of tax collectors but also save on money. Among the many options available, most financial experts recommend investment in tax-saving funds, tempting you to put all your money into this scheme. But before you take the plunge, here’s what you need to look into before investing in a tax-saving fund. TAX BENEFITS While the primary benefit of a tax-saving fund is implicit in its name, tax benefits are dependent on the investment made in the fund. According to Section 80C of the investment tax law, all investments up to Rs 1 lakh are exempt from tax. In addition, tax-saving schemes offer tax rebate under Section 88 up to a maximum of Rs 10,000. Also, since the lock-in period for tax saving funds exceeds one year, you can be guaranteed of exemptions from long-term capital ga...