| 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. |
The stock markets have been volatile over the last few days. They are in a sideways movement and trying to find the bottom after a fall of 20 percent a week ago. The market sentiments are not very positive at the moment and the recent developments are expected to dampen them further. Globally, governments and central banks are trying to cut rates and announce packages to improve business sentiments. These are some of the major developments in the markets last few month: A) Global On the global front, another large US bank went into a financial crisis. The US government took quick measures to avoid the spread negative sentiments in the markets. The US government announced a bail-out package and agreed to shoulder the losses on the bank's risky assets. China announced a large cut in interest rates and reserve ratio to boost the investor sentiments in the markets. Recently, the World Bank announced China's growth rate next year will come down to 7.5 percent. The European ...
