FinanceIndia

Investors are constantly in the lookout for opportunities or schemes that can help to grow wealth, save taxes, generate returns, and plan their finances in a better way. There are various similar schemes available in the market but most of their returns are taxable according to the Income Tax rules. Keeping the fact in mind that investors should look at saving taxes and not avoiding them, this is where ELSS funds or tax savings funds steps in. Through ELSS funds you can get tax benefits under Section 80C. They have the shortest lock – in period of 3 years, as compared to other tax saving instruments. You should know that when you invest in schemes like PPF, bank tax savings FD and ELSS etc. you can claim up to Rs. 150,000 in a financial year as deduction from your gross total income under the Income Tax Act 1961. The table below will explain how this works: (Illustration of Tax exemption for an individual less than 60 years in receipt of salary income for the financial year 2021...

 The automatic choice when investors want regular cash flow from their investments, the natural choice for majority is post office monthly income scheme or bank term deposits. However, due to declining interest rates of conventional investments, SWP in mutual fund is emerging as a popular choice amongst investors. Also known as systematic withdrawal plan, it is a good investment option for investors needing regular cash flow from their mutual fund investments. The reasons are following – SWP in mutual fund gives regular cash-flows to MF investors till such investors have sufficient unit balance in their account. As returns are not assured in mutual funds, investors can decide how much they want as cash flow and at what frequency. The frequency can be monthly, quarterly or annually. If the withdrawals from systematic withdrawal plan is reasonable, investors can also expect capital appreciation over and above the regular cash flow. Usually, the returns from mutual funds is hig...