Best Tax Savings Schemes India
Labile - Mutual Fund
For most people, tax-planning is a last minute rush in March, just before the end of the Financial Year. These people don’t have any Financial Knowledge so they put their money randomly in any Tax savings schemes India. There are so many Tax-Savings Schemes available in India. Here is a List.
01) EPF (Employees Provident Fund)
02) PPF (Public Provident Fund)
03) ELSS – Tax Savings schemes from Mutual Funds (Equity Linked Savings Schemes)
04) Five-years Bank Fixed Deposits
05) NSC (National Savings Certificates)
06) Insurance + Investment Products
So the above is the list of various Tax Savings schemes available in India. Now the question is, which is the Best Tax Savings Schemes India?
Here is how you can chose the Best scheme according to your needs.
Que: Ask yourself that, For how much time horizon, you want to stay Invested?
Means weather you want this fund in near future (less than 3 years) because you want to buy a new car or you want to plan an Europe Trip? If your Investment Time Horizon is less than 3 years than you should go for Non-Equity schemes such as PPF (Of course, for PPF the first 6 years will be lock-in period.
Now each of the scheme available in the market has a fixed lock-in period of 5-6 years (Except ELSS which has a lock-in period of 3 years only). Now my question is that, if you want to stay invested in equity for a longer time horizon (more than 5 years) than why not Equity?
Because if we compare the data of past decades than Indian Equity has traditionally given 15-20% per Annum compounded Annual return in the long run. While other Tax Savings schemes India offer only 8% return per Annum.
My another question is that, Most of the people of India stay invested in the PPF for years and decades. Than why not go for Equity? (ELSS). Because over such a long time horizon (Decades), Equity will give you excellent returns than any other Asset Class. Over a Longer time horizon (For Decades), Equity has a tremendous potential to grow.
So in My opinion, ELSS is the Best Tax Savings Scheme India. Simply chose an ELSS from some good and reputed fund house having a past record of good performance and stick to it for decades. You will definitely gain much more than any other tax saving schemes.
Don’t consider the current 50% market fall. But In fact, this is an opportunity to enter into the market at lowest price. So start your SIP with ELSS and if you have already started SIP in ELSS than continue it….. Don’t listen to the advises of the certified Financial Planners.
Your ELSS Strategy -
- Imparts financial discipline if you opt for SIP
- Better returns over other Section 80C options
- Prospects enhanced by 3-year lock-in period
- Don’t quit SIP if market enters rough patch
- Look at 5-year performance before Investing
