Are you looking for best tax saving investments? Don’t know how to save income tax? Don’t worry your Tax saving can be easy if done in a correct manner. There are various smart ways to stay away from paying taxes and save as much as possible if you consider the best options. Generally, people indulge into tax planning when the financial year is about to end. Investing in the early quarters of the financial year is a smarter approach instead of the financial year is about to end. This ensures that you get time to plan your investment and avail the most out of it.
Some of the tax saving investments includes tax saving Mutual Funds ELSS, PPF, tax saving FD, NPS, and ULIPS etc.
One of the most popular Sec 80C investments are in tax saving mutual funds-ELSS funds (Equity Linked Saving Schemes). ELSS funds are equity diversified funds and one can enjoy both the benefits of capital appreciation as well as tax benefits.
Any investor who parks too much money in fixed-income assets can face other types of risk such as inflation risk and shortfall risk. A high rate of inflation would erode the value of your savings. Shortfall risk is the risk that an investment’s actual return will be less than the expected return, or more accurately, the return needed to meet one’s investment goals. Then there is the issue of liquidity too – should the investor need the money for some emergency it would be difficult since the PPF has a lock-in period of 15 years. As compared to traditional tax saving instruments like PPF and NSC, the lock in period for ELSS fund is much lower—3 years, while for PPF it is 15 years and for NSC it is 6 years.
ELSS Funds give you an option to go via SIP route, which in the long run can give good returns. The equity exposure in ELSS funds give you the growth and these funds have given average returns of 22.91 per cent in one year, 14.69 per cent in three years 18.53 per cent in the last five years and 16.64% in last 10 years.
You can get deduction upto Rs.1.50 lacs from your income by investing in ELSS funds. Investment may be made in Lump sum or through SIP- Systematic Investment Plan.
For more information, visit https://www.hexagonwealthadvisors.com/