If you are looking to save tax, then why not do it in a way that helps you create long term wealth too. For this purpose, anor is an easy choice. Not only does help you create wealth by in equity assets but also it qualifies for a for an up to Rs 1,50,000 in a financial year.
comes with a three-year lock-in, after which you are free to redeem a few or all units. However, this is an equity investment and the longer you are able to remain invested the better it is for your wealth creation goal.
There are otheravenues which can help you save a similar amount of tax, however, when you look at performance, none of the others has delivered similar inflation plus returns in the long run.
Before you pick yourscheme, here are some additional aspects you need to know.
1. You can do a systematic investment
Being on the mutual fund platform means that yousmaller amounts every month and claim a on the accumulated in the financial year. This saves you from putting aside a lump sum at the end of the year. Thereby, easing the pressure through small instalments. Be mindful that each monthly will have a different .
2. Tax-free gains up to Rs 1 Lakh
When youin not only will you get a on the amount, but also long term on the first Rs 1 lakh worth of gains is nil. In other words, you will pay long term tax only gains beyond Rs 1 lakh.
3. You can hold beyond three years
The three-yearis more a suggestion for you to remain invested for the long term. Once the lock-in is over, you have the flexibility to withdraw or redeem form the fund. Having said that, it is in your interest to remain invested for at least 5-10 years rather than redeeming immediately after the lock-in is over. Unless there is a performance issue or a issue don’t redeem your even after the lock-in is over, hold on for the long term.
is one of the simplest, most convenient, transparent and remunerative (in the long term) tax-saving . With the convenience of monthly , you should take up the opportunity it gives to not only save taxes but also build wealth.