Prajna Capital - An Investment Guide

ELSS returns may look better that home loan repayment benefits, given their attractive returns. But it is still better to opt for the latter. THIS is a scenario that confronts most home loan borrowers at some point of time. It is close to the end of the fiscal, you have received some annual payouts and have a surplus of Rs 1 lakh lying in your bank account. Do you - a) repay your home loan? or b) do you invest the money in an ELSS scheme? Both, home loan pre-payment and investment in mutual funds get you the same tax breaks. Of course this dilemma would not come into play if the total repayment that you make during the year through your monthly instalments, includes a principal repayment of close to Rs 1 lakh. If you are already repaying Rs 1 lakh of you loan through your instalments, there is no headroom. This by itself would qualify as investment up to the Rs 1 lakh limit under Section 80C. In other words, those borrowers who have to make this choice include a new...