Tax Saving Mutual Funds

Mutual Fund is a trust which subscribes its schemes to a number of policy holders and in turn safeguards their savings. Every scheme of the mutual fund is different in terms and conditions and represents an unbiased right in the benefits of the mutual fund for every fund holder.

Guidelines

Tax Saving Mutual Funds in India normally abide by the following guidelines while permitting tax advantages on their plans:

Tax benefits to be mentioned under the "objects of the offering" column.
Any exclusive tax advantages for the mutual fund company and its shareholders by mentioning the section number of the Income Tax Act without revealing the content of the section.

Things to consider

Before going for the best suited tax saving mutual fund, it is vital for an investor to consider certain factors like:

  • Consider parameters like current performance of the fund in the market, expenditures likely to be incurred, method of investment, etc. to guarantee that the investor starts considering his fund at par with the usual diversified equity fund which could lead to inappropriate asset allotment.
  • Investors should preferably invest in funds where the principal assets are chiefly equity funds.
  • Invest in promising market and steer clear from risks
  • To make money include more equity funds in your investment portfolio and invest in rewarding mutual funds

Evaluating performance of a tax saving mutual fund



The basic criteria for an investor to bear in mind before opting for a tax saving mutual fund is the current performance of that specific fund. Performance is significant constraint, through which a fund attracts prospective investors before they consider it for investing. Generally the performance of all the major equity related investments are considered on the basis of 3-5 year of its investment period. While analyzing the performance of a fund emphasis should be laid on premium and consistency of the fund in the market.

Another important aspect to consider is the amount of returns that the fund offers in comparison to other tax saving funds. Decent returns can be attained by following an aggressive investment approach.

Identify the most rewarding tax saving funds which have rewarded its investors on per unit of risk taken by them and opt for it. Also look for other hidden expenses such as fund manager's income, marketing expenses, managing expenses, etc.

The expenditure of investing in a mutual fund is calculated by the expense ratio which signifies the proportion of the fund's assets that go towards the expenses of maintaining the fund.

Popular Tax saving mutual funds in India



  • SBI Mutual Funds
  • Prudential ICICI
  • Franklin Templeton Mutual Fund India
  • Standard Chartered Mutual fund India
  • Bajaj Capital.

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