Tax Saving Funds

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Abstract:

Tax Saving Funds in India are also known as equity-linked savings schemes. Tax Saving Funds in India provide tax rebates under Section 88 of the Income Tax Act. They are beneficial for those investors who want to benefit from the rebates that are given in taxes.

Mutual Fund in India:

Mutual fund in India is a kind of vehicle for investment which collects the money of a large number of investors. The money that is collected is then used by the fund manager to buy securities like bonds and stocks.

The securities that are purchased are called the portfolio of the fund. The different kinds of mutual funds in India are Closed- End Funds, Large Cap Funds, International Mutual Funds, Value Funds, and Tax Saving Funds.

Meaning of Tax Saving Funds in India:

Tax Saving Funds in India offer to the investors rebates in taxes under the Income Tax Act, Section 88 and they are also known as equity-linked savings schemes. Tax Saving Funds in India usually have a period of lock- which is generally of three years. As a result of this, the manager of the fund is not concerned about factors such as the pressures of redemption, performance of the fund during a short time, and thus does his job by keeping in view the long term goal. The fund manager of the Tax Saving Funds in India invests the money in instruments that are related to equity.

Tax Saving Funds in India are suitable for those investors who want to increase their investments and also want to benefit from the rebates in taxes. The advantage of Tax Saving Funds in India is that they grant the investors an opportunity to make investments in an avenue that is market- linked and at the same time claim benefits in taxes. The dividends that are earned in Tax Saving Funds in India are tax free.

Major Tax Saving Funds in India are:

  • Franklin India Tax Shield
  • HDFC Tax Saver
  • Sundaram Tax Saver
  • HDFC Long Term Advantage
  • Prudential ICICI Tax Plan
  • Birla Equity Plan
  • UTI Equity Tax Savings
  • Tata Tax Saving Fund
  • Magnum Tax Gain

To knoe more about Classification of Mutual Funds click on the following links:



Last Updated 06/30/2011

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