The best way to Save Tax and Grow Wealth

Want to know the best way to save tax? What if we told you that you could not only save tax but also grow your money at the same time? Well, in this post we discuss the key features of some of the popular 80C investment options so you can choose the right one.

Click here If you haven’t read our last post on how you can save up to Rs 46,800 in tax every year under section 80C of the Income Tax Act.

The table below shows the comparison of three popular 80C investment options:

As can be seen from the above comparison, Tax Saving Funds not only offer a higher return potential but also has the shortest lock-in period (3 years) among all 80C investment options.

Moreover, your income from Tax Saving Funds are also tax efficient as combined gains of up to Rs. 1 lakh per year from all equity and equity-oriented funds are tax-free.

However, before you invest into tax-saving funds, it is important to be aware that while such funds tend to deliver superior returns over a longer-term, they tend to be volatile from a short term perspective. But the good part is, since there is a lock-in of 3 years in tax saving funds, your are anyway investing with a long-term view. Moreover, when you invest in the 80C investment option, you straight away make 20–30% savings depending on your tax bracket.

Now that you have understood why Tax Saving Funds are the best way to save tax, you may be wondering how you can invest in a Tax Saving Fund. Read our next article on how you can Invest in tax saving funds using PhonePe.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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