Tax Saving Mutual Funds

My Dad just called and asked me to file my ITR as he had asked his CA to do the same and upon calculation, he has to pay around 5000 INR in taxes with all the deductions. So he was happy with it but he forgot that he had made some Investments in Tax Saving Mutual Funds which can basically make his taxes reduce a little and as I say it's worth it to save as much as you can.

So Tax Saving Mutual Funds or ELSS Funds are Funds that give users Tax Saving benefits up to 150000 INR, which means any and all Investment made up to the mark of 150000 INR will be tax-free provided you Invest in an ELSS Fund.

Benefits of ELSS Funds

• For starters it has the ability to save taxes up to a mark of 150000 INR which is nice.
• It is Equity Linked so the returns are usually beating the Inflation easily.
• There is a 3-year Lock in PEriod in ELSS Funds which means whether you want it or not you invest for a Moderate Time period.

Things to Look Out For

• Since ELSS Funds are equity-related the risk involved is slightly higher.
• Try to remain Invested as long as possible as you will reap the benefits once the Time Frame is broader.

So yeah this way you can Save Taxes as well as Create Wealth at the same time. Personally, I like to Systematically buy ELSS Funds every single month so that at the end of the Year I have a decent amount invested in ELSS Funds which can help me in my Taxes as well.