If you are looking for Tax Saving Mutual Funds refer my list of Best Tax Saving ELSS Funds.
Year ending is round the corner and you must be scrambling to invest your money to save your tax. And what else can be a better opportunity than putting your money in equity linked saving schemes or ELSS as they are popularly known. The markets may have been volatile in the last one month but ELSS schemes seem to have bettered the markets in terms of returns delivered to investors. Those who have not taken the step from the last year April for tax planning will have only two options left. Either allow huge chunks of their salary to get deducted or invest hurriedly in one of the tax-saving options to escape the tax net at the last minute.
Did you know that you can save taxes on the Rs 1 lac limit (the limit under Section 80C) yet invest much less than that? Sounds impossible, doesn’t it? I have done the same last year and will be doing the same this year.
Here is my last year’s TAX planning of one lac where I invested much less than one lac. (It has been scaled up to one lac)
|I bought HDFC Tax Saver Fund||1,00,000|
|The price of HDFC TAX SAVER – DIV PLAN||70.319|
|Number of Units received||1422.090|
Now the Dividend of 7.5 Rs was announced on 15th March 2007 and so got back 10665.675 (Scaled up) Rs back which is Tax Free Income. So your net investment becomes 100,000 – 10665.675 = 89,334.325 and can get a Tax benefit of 1 lac.
Now there are many funds this year as well which will be declaring the dividend in the next one month and so go out and get them. Also as the market is bit volatile and choppy you even have the golden chance of getting into the market as well with more upside and return possibility.