I wish to invest Rs 90,000 over the next two months in ELSS. Is it right time to invest in ELSS mutual funds or shall I stick to Bank FDs to save tax?
There is a lot of difference between saving in a fixed deposit and investing in a tax planning fund
I wish to invest Rs 90,000 over the next two months in ELSS. Is it right time to invest in ELSS mutual funds or shall I stick to Bank FDs to save tax?
Suresh Kathuria, Chandigarh
You can invest in tax planning funds till March 31, 2018 to claim tax deductions on investments than hurrying in the next two months. There is a lot of difference between saving in a fixed deposit and investing in a tax planning fund. For instance, a bank deposit does guarantee returns, but to qualify for tax benefits the deposit should be for five years compared to investments in tax planning funds that are not guaranteed and have a three-year lock in making them risky compared to bank deposits. The choice of investing between these two options to save taxes will depend on your risk taking ability which you should exercise. Good tax planning funds that you can consider investing in are Franklin India Taxshield or Axis LongTerm Equity, which are both part of the OLM Elite list of hand-picked mutual funds to invest.