For the majority of the salaried
people, the tax on their income is a big burden. In this era majority of the
people have higher expenses than what they earn and hence saving for payment of
tax pinches a lot. However, there are some options in the market with the help
of which one can save amount that needs to be paid as income tax. The
government has offered a tool under section 80C under which one can invest in
tax saving mutual fund up to the amount of 150000 annually and save tax to that
extent.
The ELSS:
As per this provision, one can invest
in ELSS which is also known as tax saver mutual funds in lump sum or instalment
as per the SIP plan and get much relief from the pain of paying income tax. The
most important part of the investment here is one can go for one-shot payment
or in monthly investment as per the SIP which can offer the same benefit of
saving tax. In the tax saver funds also one can have ample options which can help him
get easy saving of income tax up to the amount of 150000. One can find this
scheme with almost each of the mutual fund company in the market.
How to
choose the option?
This is an important question from
the viewpoint of every investor who wants to go for this option. The pattern of
investment in ELSS is same in almost every company, but the vision and plan of
the company for the utilization of collected fund differs as per the strategy
of accumulating the fund over a period which one must take into account before
investing in this option with any company. Hence one needs to find the best
elss mutual funds to invest in sip when he wants to go for the saving as per
monthly plan.
Why go for
SIP in ELSS?
If one has to pay the tax on his
income, he has to pay it in one go, but with the help of the SIP, one can
invest monthly. The single payment option can be troublesome for an individual
as the tax amount may be very high, but the same can be paid via monthly
instalment, and hence one does not get affected by the amount that needs to be
invested in the SIP as a part of saving on income tax.
Check these
points before investing:
Investing in any avenue needs great
care and research. If one does not know much about the option or market, he
needs to ask an expert or gain enough knowledge that can help him understand if
he is investing in the right option or not. In mutual fund also one can get
various options such as growth, dividend, dividend reinvestment, pay out and
many more. Each of the options here has limits as well as benefits that must be
checked by the investor while thinking of the concerned avenue. This can help
him save his money as well as meet the target after a certain period. In the market,
one can easily find an expert to have assistance. Even the mutual fund
companies have their financial planners who can help one find the right option
and invest the amount.
The options
in a mutual fund:
In the mutual funds also there are
ample options available. Each of the option here has some specific benefit
which the investor needs to analyse before going for the same. The dividend
option is one where one can have a certain amount paid or invested again in the
same scheme. Hence the fund can grow significantly in a short span also. The
growth option is for the one who just wants to take benefit after redeeming the
same at a specific time. He can calculate his return on investment and compare
the same to other options in the market.
For those who want to save a little
amount every month and get a good return on it can go for the option of SIP,
which can help them achieve the goal over a period. There are many companies in
the market, and hence, one can easily plan the creation of fund at a certain
stage.
