- Investors looking for wealth creation over the long term.
- Investors looking for tax deductions under Section 80C.
- Investors having a time horizon of 3 years or more.
Mutual funds can be tax-efficient investment avenues that can help reduce your tax burden and at the same time increase your wealth. Income tax benefit - Investments made in tax-saving schemes up to Rs 1.5 lakh are eligible for deduction from taxable income under Section 80C of the Income Tax Act. Lower lock-in period - In comparison to traditional investment avenues like PPF, NSC under section 80C of the Income tax Act, these funds have the shortest lock in period of 3 years. Tax-free dividends/Capital gains - Dividends declared under the tax-saving schemes during the investment period are tax-free. The profits on the sale of these units are treated as long-term capital gains, and are not subject to tax. Higher return potential – Tax-saving funds invest a large part of the fund in equity, which despite short-term volatility has the potential to build wealth over the long term. WHO SHOULD INVEST?