Tax saving quarter

Tax

This time of the year, January to March quarter, everyone flocks to tax saving investments. Yes, all tax saving investments see more investors during this period. If you were in hibernation and woke up recently, you will see tax as an inevitable evil. You are not alone. You are one among many people who think about tax at the 11th hour. Tax is not evil. There are ways to reduce your tax and save cash. Let us see in short how we can save tax? 

Equity Linked saving scheme (ELSS)

Out of all the tax saving options, mutual funds; equity linked saving schemes are having shortest lock in period of three years. All other schemes like bank tax saving deposits, NSC etc are around five or more years. Yes, time is favorable for ELSS, but on the other hand, all other schemes have a definite return percentage and ELSS returns are variable and not guaranteed. Again, even though past returns are not guaranteed for future returns, we can select funds based on consistent performance over 1/3/5 year periods and choose better funds for investments. Out of a big basket of ELSS funds, we have screened funds keeping in mind consistent returns with relatively less ups and downs. In this process we have shortlisted three funds which have been listed in the table below for your perusal. Have faith and trust in mutual funds and start investing in any one of these funds this season for tax saving.

Annualized yearly return percentage of selected ELSS funds are given below

Scheme	1 Year	3 Year	5 Year
Mirae Asset Tax Saver Fund Direct-Growth	36%	27%	24%
IDFC Tax Advantage (ELSS) Direct Plan-Growth	49%	26%	22%
Canara Robeco Equity Tax Saver Direct- Growth	35%	27%	22%

Beyond section 80C.

If you are the kind of person who has already invested  ₹1.5 lakhs under section 80C, and is looking for something beyond this 80C universe, here is your answer. You can consider investing in health / medical insurance policies and claim deduction under section 80D. Similarly, if you are particular about living comfortably after your retirement, plan now itself. You can save an additional  ₹50,000 in NPS (National Pension Scheme) and claim tax deduction under section 80CCD 1B.

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