Investment for Tax Saving

POSTED BY Jeetendra Raut ON February 20, 2012 3:47 pm COMMENTS (3)

Dear Sir,

I have already bought NSS from POST of 30,000/- & want to invest 50,000/- more for tax saving purpose. But as the locking period for NSS is for 6 yrs, I feel its too big. So Kindly guide me as to whether there are any other options with about 3 yrs of locking period.

3 replies on this article “Investment for Tax Saving”

  1. Dear Jeetendra, may I know your income tax slab & your current FY’s gross taxable income?

    Thanks

    Ashal

  2. BanyanFA says:

    Your 3 years criteria is not a good way to hunt for your tax saving investments, specially when 31 March is so near. I would not suggest ELSS Mutual funds for this requirement.

    All other tax saving investments would require you to hold on for around 5+ years. Best in your case would be to contribute to PPF – 15+ years lock in.

    Regards
    BFA

  3. Equity MFs – called ELSS – have a 3 year lock in period. I would recommend ELSS only if you had spread out the investments over a period of 1 year. Now with barely 6 weeks to go you will be forced to invest more each week (Dont do lump sum, do in SIPs). Invest around 25k here and another 25k in PPF.

    If you need this money in about 3 years for a future expense it is futile to dump it in MFs.

    In general NSC is an very tax inefficient instrument. Investing for the long term will entail blocking funds for extended periods of time (like in PPF-15 years locked) but the effort is worth it

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Download Our FREE Ebook!

Available only for first 100 people today

Download Our FREE Ebook!

Available only for first 100 people today