PENDULUM INVESTMENTS

It’s the season, have you saved your taxes yet?

Tax planning:

Tax Planning refers to Financial Planning for Tax efficiency through utilization of tax exemptions, deductions, and rebates to the maximum possible extent in order to bring down tax liability. There are various sections within the Income Tax Act that allow investors to claim these benefits. One such section is 80C.

Section 80C allows the reduction of taxable income by making tax saving investments. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayers total income.

Which investments are eligible for deductions under section 80C?

Following are the investment options to avail tax benefits u/s 80C:

• Equity Linked Savings Schemes. (ELSS)

• National Pension Scheme. (NPS)

• PPF Investments.

• Senior Citizens Savings Schemes.

• Life Insurance Products.

What is ELSS?

ELSS Funds are Equity Oriented Funds that seek to generate long term capital growth for the investor, along with providing tax benefits under section 80C.

Why ELSS?

• ELSS Funds invest 65% or more of their assets in equity and equity-related instruments, while serving as tax saving investments. This gives an investor the dual benefit of long term wealth creation as well as tax efficiency.

• At 3 years, ELSS funds have the shortest lock-in period among other tax saving investments.

• Investors have the option of making lumpsum purchases as well as SIPs in these schemes, thereby allowing investors to start even with smaller amounts.