Is DSPBR Tax Saver the right fund to invest?
I want to invest Rs 5,000 every month in DSPBR Tax Saver. Is this the right fund to invest?
Sunil Upadhyaya, Lucknow
DSPBR Tax Saver is an equity-linked savings scheme (ELSS), in which investments have a three year lock-in to claim the tax savings under Section 80C of the income tax up to investments of Rs 1.5 lakh in a financial year. However, when you invest in such a fund by way of an SIP, every monthly investment needs to fulfil the three year lock-in to claim the tax benefit. This can be cumbersome as effectively, at the time of completing the three year lock-in, the 12 monthly SIP in a financial year, will actually complete the lock-in in the fourth year from the time you start these SIPs. It is for this reason that when you are investing in ELSS, try and do so in lump sum. You could do so, by staggering your investments in this fund 2-3 times in a year than go with a monthly SIP.