How Mutual funds Save Tax in India- A beginners Tutorial?
Income Tax Exemptions on Mutual Funds in India?
Chapter III of the Income Tax Act, 1961 provides for exemptions in income tax. There are few specified incomes on which a person can get exemptions. It means that at the time of calculating annual income, this type of income will not be added. For claiming any of these exemptions, it is necessary to furnish documents which shows that your income comes under this list. Income of specified Mutual Funds registered and/or set up under/by SEBI Act, 1992, public sector bank/financial institution/RBI fulfilling such conditions as specified. Ref. Income Tax Act 10(23D).
Different Tax Saving Mutual Funds available in India?
Below is a list of some of the popular tax saving mutual funds available in india:
SBI Mutual Fund
Prudential ICICI
Bank Of Baroda
Bajaj Capital
DSP Merrill Lynch Mutual Fund India
Franklin Templeton Mutual Fund India
Standard Chartered Mutual Fund India
How to select the right Tax saving mutual fund available in India?
Below we have mentioned a few parameters that needs to be evaluated before selecting the right tax saving Mutual Fund-
1. Performance.
2. Investment approach
3. Volatility and risk-return
4. Expenses.
Some other parameters that you must look at are entry load and track record of the asset management company. Most Tax-Saving Funds have an entry load of 2.00-2.25 per cent. Some fund houses waive off the entry load on investments made through SIPs (systematic investment plans).
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