Investment guidance required for tax saving

POSTED BY Kunal Dhotre ON February 1, 2013 6:05 pm COMMENTS (5)

Dear Manish,
I Kunal Dhotre age 30, required your guidance on tax saving and investment and would appreciate if you could please go through our my monthly income and expenses statement.
I am working with a private firm and earns a monthly salary of Rs. 30,000/- (only Income source)
Investment in shares total of Rs. 30,000/-, LIC Policy for Rs. 7,000/- approx Yearly with total sum assured of Rs. 1,50,000/- and Mediclaim Policy for both Rs. 3,989/- Yearly (Only saving & investment)
Fixed commitment with my Dad of Rs. 10,000/- monthly, as money used for marriage function (will be starting from Feb 2013 for 20 months)
Currently had to make investment of Rs. 20,000/- for tax saving. My office colleague suggested me to take LIC policy Jeevan Tarang, but after going through our blogs  I came to know that we can have a better option than investing in Jeevan Tarang.
But I am still confused where to invest. After reading our news letter ” How a newcomer should start his financial life – 4 steps”. As given in step 2 – My wife had started a Recurring deposit of Rs. 1,000/- from Jan 2013. As given in step 3 – I am opening a PPF account in on 1st February 2013 and will keep emergency fund of Rs. 4,000/- per month from my Jan salary.
Right now I don’t have any outside loan liability, hence going forward I want to create wealth for my family. 
Request you to kindly guide us and suggest few investment options suitable within our limited income.

5 replies on this article “Investment guidance required for tax saving”

  1. Dear Kunal, please check my profile here in the forum or contact dear Manish to get my mail id.

    As per forum policy, I can not publish my personal mail id directly. I obey forum’s rules. 🙂

    Here is dear Manish’s id



  2. Kunal Dhotre says:

    Dear Ashal, FFC & Krishna,

    Thanking you for your reply.

    Ashal can I get your email ID pls.


  3. Dear Kunal, what’s this 10K mly marriage thing with your father? I’m unable to understand the whole query. In case you are not comfortable to discuss in public domain, please write me a personal mail.

    As you are already married, Even before thinking for tax, you should think for risk cover. So please purchase a term cover of around 60-65L Rs. Instead of focusing too much on tax saving, focus on your needs & financial life & your goals & then only link your tax saving in it. A contingency fund should be a starting point even before depositing 20-30-50K in PPF.

    these are my views only & you have every reason to agree or disagree with these.

    Please feel free to discuss.



  4. Tax saving should always be integrated with financial goals. So please write down your short and long term goals.

    Since you will open a PPF account in Feb. you could invest 20,000 in it for this year and from next year plan your tax savings in April itself. You can contribute regularly in PPF.
    Use the PPF account for your retirement.

    You must started investing in mutual funds. Another option to invest 10,00 in Feb and 10,000 in March in a tax saver mutual fund.

    You could learn how to select a mutual fund from here:

    Amount of income does not matter. Only discipline does. List your goals, find out how you need to save and start saving.

  5. Krishna Kishore Appala says:

    Hi Kunal,

    Its good to see that you haven’t get into the trap of LIC ulips.
    Now coming to your option of tax saving, I would say you can look into ELSS mutual funds like HDFC tax saver, canara robeco tax saver etc and also partial amounts in PPF as well. Dont worry about DTC right now, as they were no big signs of it coming this year as well. Make a fair balance between ELSS and PPF. I would say out of 20k you need to invest, keep 10k in PPF and 10k in any of the MF stated above.

    Now considering your future growth option, you can invest in Quantum tax saver, because it is the mirror image of QLTE fund. So that even after DTC, tax saver will be merged in this fund which helps you in capital appreciation as well. As soon as that 4000/- keeping aside for emergency fund comes near to 6 months of your expences, move it to MF as well.

    Krishna Kishore Appala

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