Usually, a person should pay tax on investment if the return on investment exceeds a particular limit. So, a person should invest wisely so that he can save taxes. If he invests, in certain government schemes or funds, then the tax liability is reduced. Today many people invest in some schemes that provide tax benefits.
The people invest in Tax Saving Mutual Funds to save taxes and the lock-in-of period of this fund is 3 years. The people should invest in SIP and they can regularly save their tax. A person can invest Rs. 500 per month and the funds are invested in those securities that are profitable. Before investing, they access the performance of the schemes for the last 3 to 5 years. They provide zero fees for all the services that they provide such as opening an account, redemption or managing the funds. It is a special scheme that provides special equity funds to provide deduction up to 1, 50,000 under Sec 80.
Tax Saving Mutual Fund is considered as one of the best tax saving mutual fund investment because of the following reasons.
Investment in Systematic Investment Plan
The investor invests fixed amount every month in the long run.
Lock-in-period
This scheme comprises the lowest lock-in-period of all the tax saving schemes. It has a lock-in-period for a period of 3 years. It is a 3-year to 15-year scheme which has a lock-in-period of 3 years.
Diversifying funds
It is a best scheme to diversify portfolio and a person can invest in different instruments such as equity or debt also.
Most of the fund agents process the funds by using digital devices. So, the investors need not produce several documents as the information is recorded I the system. Here is some of the best taxsaving investment schemes.
Invesco India Tax Plan (G) Direct
The rate of return of this fund is 17.57% and is an open-ended scheme with minimum withdrawal limit of Rs. 500. It provides nearly 10 types of schemes. A person can also withdraw Rs. 500 at a time.
Axis Long-term equity funds
The rate of return is 17.39% and it is an open-ended scheme. At the end of five years, annual rate of return is 17.39%. This fund should not be sold for 3 years and tax is applicable after 3 years. If the value of the asset exceeds Rs. 100000, then the person should pay tax of 10%. Cess charges are not included here. The person can claim deduction under sec 80 c on the investment.
Mirae Asset Tax Saver Direct
The rate of income is 24.06% and is open-ended scheme. It is ideal for the investors who want to invest for a period of 3 years and are seeking for additional benefits. But, the investors should be ready to undergo moderate losses and the lock-in-period is 3 years. At the end of 3 years, the rate of investment is 20.16%. After one year, the annualized rate of return is 14.89%.
The person can choose a mutual fund, send details and select amount to be invested. The process of investing online is easier.
