Unlocking Wealth Potential: Investing Wisely in Tax Saver Mutual Funds

In the current dynamic financial landscape, where individuals strive to optimize their wealth creation while managing their tax obligations, investment options have evolved significantly. Salaried professionals find one way or the other to do some tax saving as it helps them save some bucks. This is where tax saver mutual funds steps in!

This financial scheme has garnered substantial attention for their unique ability to offer investors two advantages. Firstly, the opportunity to save taxes and, secondly, participate in the growth potential of equity markets.  

What are tax saver mutual funds?

You might have a brief idea of what these funds are of and what they have to offer. In simple terms, to save tax on your yearly income, these are one of the best investments. 

Also known as Equity-Linked Savings Schemes (ELSS), these types of mutual funds fall under a particular category in many countries, including our own India. These are designed to offer potential investors a dual benefit of potential capital appreciation through equity investments and tax savings under a specified section of the income tax law. 

What are the advantages of investing in it?

• Diversification

These best mutual funds typically invest in a diversified portfolio of stocks across various sectors and industries. This helps spread investment risk, as the performance of one sector’s stocks may offset another’s performance.

• Tax Savings

Obviously, tax savings is one of the primary advantages of investing in ELSS. The amount invested here is eligible for deduction under Section 80C of the Income Tax Act. Remember that this deduction can help reduce your taxable income by up to a whooping amount of Rs 1,50,000/-.

• Short Lock-In term

While these funds have a mandatory lock-in period of 3 years/36 months, this is relatively shorter when compared to other tax-saving instruments like National Savings Certificate (NSC) or even Public Provident Fund (PPF), which have longer periods. This basically means that the investors can access their funds sooner if needed. 

• Flexibility

After the mandatory lock-in period finishes, the investors here have the flexibility to either redeem their invested amount or continue holding it. This allows them to align their investments with their financial goals and liquidity needs. 

How to invest in best tax saver mutual fund 2023?

Nowadays, investing is as simple as ordering groceries at your home simply from your smartphone. But, keep in mind, it can only be successful if you use the right application. Here, I’d like to share my personal experience. I use the Bajaj Finserv application for all kinds of investment,; believe me, it is one of the best applications to invest and even has a mutual fund calculator. 

1. Download the Bajaj Finserv Application on your smartphone (Android/iPhone).
2. Sign up by entering your mobile number.
3. On the home page, you’ll see a section for ‘Investment Bazaar.’
4. Here, go on ELSS.
5. Choose the plan that suits you. 

Conclusion

There is no doubt in the fact that these funds offer a compelling investment option for individuals seeking a blend of tax benefits. If you fall under the tax bracket and want to save some taxes, go for this investment without any doubt.