How To Save Tax With Mutual Funds And Get High Returns?

With the approaching end of the Financial Year “ways to save tax” is amongst the top queries on Google with good reason though.

Inflation and Taxes are enough to burn a huge hole through our perceived savings; however, the impact of “Tax” can be lessened. Now Rs.1,50,000 from your Income can be saved from Tax as per Section 80 C of the Income Tax Act YoY basis by showing a mutual fund investment of the same amount.

The choices range between PPF (Public Provident Fund), NSC (National Savings Certificate) and ELSS (Equity-Linked Savings Scheme).

So, Why ELSS?

ELSS’s are simply Tax Saving Mutual Funds. They are amongst the hottest tax saving methods focused not only on Saving Tax but also on Earning Higher Returns for you on your investments.

And What About Rs.1,50,000?

You can Invest up to Rs.1,50,000 from your Annual Income with ELSS Mutual Funds. This saves it from being “Taxed” and gives “High Returns” too. Basically, this sum will be exempted from Tax.

How Does it Work?

ELSS or Equity-Linked Savings Scheme is basically designed to give the best of both worlds i.e. Tax Savings and High Returns. They invest their sum in stable securities in Markets with a high growth potential so as to offer you High Returns.

High Returns? What’s the Catch?

Lock-in Periods for NSC and PPF are 5 and 15 years respectively. ELSS is 3 years, lowest “catch” we say.

What’s the Average of Returns?

It’s as good as it gets. It goes as high as 35% to 40% in a year. We recommend only the schemes that will meet these standards.

How Low Can I Start?

You can begin at just Rs.500 per month through a Systematic Investment Plan i.e. SIP. You can also make lump-sum investments.

And, I Keep the Whole Profit or is it Taxed?

Absolutely, Capital Gains and Dividends are Tax Exempted from ELSS.

Great, How do I Start?

We have recommended the Top 10 ELSS Mutual Fund Schemes which you can invest in so as to Save Tax and Earn Well on your Investments.