For any individual paying tax on his hard earned money is a painful experience. People try a number of options to save this amount. The government also offers some options investment in which can be exempted from the tax amount and hence, such options are known as tax saving options. Among the most famous instruments in tax saving, the best one is ELSS. It is an equity-linked saving scheme where the invested amount up to 150000 is exempted from the bracket of taxable income. There are various options with the help of which the investment in this option can be done.
Among the instruments in a mutual fund, one can find different types of funds where different companies have designed their products as per a specific vision. The tax-free mutual fund is the ideal option for those who need to save tax due to huge income. The investor can have two options to invest in this option. He can either invest in one shot or can invest in instalments. Hence the investor can save income tax and that too with the help of small investments. For those who can afford the payment in one shot can also go for the same.
Why should you invest in a mutual fund?
The investment in a mutual fund is not only safe but also transparent. The investor can have benefits under section 80c as per the income tax act where the maximum amount that can be saved is up to 150000. The mutual fund is the option where one can find a completely transparent system. The investor is provided with a folio, which is as good as an account where every detail of the investment is mentioned. The investor can have the amount invested as well as the units allotted and the NAV of the time when the investment was done. The investor can track the NAV on a regular basis with the help of the website or call centre and see how much growth one has got in his fund. Hence the system here is quite transparent that too one can understand in the common parlance.
There are many advantages associated with the investment in a mutual fund that can help the investors in the market. The foremost benefit here is the saving of investment and getting a good return on the same. Hence one can have benefits on both sides. The investor can save the taxable income with the help of investment in instalments as well as a lump sum. Hence those who cannot save a good amount to invest in one shot can opt for this option.
The only condition one has to follow is one needs to keep the investment for the next three years and can withdraw the amount only after the completion of the lock-in period. There are many companies which offer mutual fund in various options. Every company has designed the fund as per the investment plan and strategies determined by the experts in the company at a very early stage. For an investor, it is necessary to find the best mutual fund across the industry.