A mutual fund can help you in saving tax

3:23 AM RAWAT 0 Comments

A mutual fund is considered as one of the ideal options present in the finance market, which offer high returns on even tiny investments. But for the investment to fetch you handsome returns, the only essential thing you need to focus on it and give ample time to it. The substantial flexibility offered by mutual funds regarding the withdrawal and the way of investment also makes it one of the best options available in the market. There are a bunch of companies in the market which offer high returns to the investor in the medium time period and with temperate risk.

Thet tax-free mutual fund:

Tax free mutual fund is also called an equity-linked saving scheme. In the mutual fund market, it is also referred as ELSS. ELSS is a must in the product list of almost all the AMC’s (asset management company). Common people who pay tax on their salaries can enjoy the privileges offered by these funds by investing their money in ELSS. If you invest 150000 in ELSS then according to the government rules, you will be exempted from paying the tax on the invested amount. Hence, this makes tax free mutual fund the preferred option because along with fetching you a handsome return on your investment it also reduces the burden of paying tax. The only limitation related to this fund is that you cannot withdraw your money for the next three years.

What are the available investment options?

A ton of options is open for the investor where he can invest his money in ELSS. Mainly, there are two ways of investing money –

1) Online mode
2) Offline mode

In the online option, all the processing has to be done by the investor himself. Usually, the people who are good at investing go for this option. Then the investor has to fill an online application form regarding his personal details along with sending the support documents to the organization through this platform only. The amount can be transferred through net banking, online fund transfer or from any other source.

The investor has to contact the company or the broker directly in case he chooses the offline mode. Then an application form has to be filled along with submitting a hard copy of documents to the company. The money can be transferred in the form of a cheque. After the transaction is successful, a folio is provided to the investor by the company where all the details related to the investment are mentioned. The investor can also know the nav (net asset value) of the allotted units, total amount, number of units and the number of the folio. Thus, the statement consists of a brief description of all the details of the investment.

Hence, a mutual fund is an ideal option for investors because of its transparent investment system and flexible payment options. The investor can know the NAV, which is altered daily through the company’s website or from the call centre. The investor can also choose SIP where he can pay the amount in instalments and also save money on tax.