Systematic Investment Plan (SIP) allows the investors to invest in a mutual fund scheme of their choice at periodical intervals. It automates the investment process once the investor has completed the registration process, as the investments continue to be regularly made irrespective of market ups and downs.
Amidst the persisting market volatility, the monthly SIP (Systematic Investment Plan) inflows into mutual funds have sustained over Rs. 8,000 crores for 16 months. (Period- Dec 2018 – March 2020). Source: Association of Mutual Funds in India
ELSS (Equity Linked Savings Scheme) has been one of the available investment options under Section 80C, which allows a tax benefit of investment up to Rs. 1.50 lakh in a financial year. Further, besides the tax benefit, the taxpayers can also invest in ELSS to club their financial goals and tax plans.
Section 80C of the Income Tax Act provides various investment options to the taxpayers to be eligible for a tax benefit. While many taxpayers prefer tax-saving fixed deposit (FD) due to more natural investment process and guaranteed returns, ELSS (Equity Linked Savings Scheme) has been emerging as a preferred tax saving investment option off late.
While you are planning for your taxes, one may choose to invest in a variety of investment options to save tax. Section 80C provides a full bouquet of options for the taxpayers to choose from, including the Equity Linked Savings Scheme (ELSS) with a tax benefit of up to Rs. 1.50 lakhs in aggregate for all the options. While this tax benefit available under Section 80C is most commonly known, there are investment avenues available under other sections of the Income Tax Act as well, which provide tax benefits to the investors.
While you are creating an investment portfolio, you must not overlook how mutual funds are taxed. Different taxation rates applicable to different types of investments, and such rates may specific investment options more attractive than others.
If one has ever invested in mutual funds, the folio number is the address where the mutual fund units are housed. A folio number is to mutual funds, what bank account number is to bank. Like one may have multiple bank accounts with different banks and even multiple savings/ deposit accounts with the same bank, one may also have numerous folios with a single mutual fund house and across various mutual funds.
Mutual funds offer a wide range of investment options to the investors, to suit different risk profiles, investment horizon, and financial goals. An investor may choose to invest in equity schemes, debt schemes, hybrid schemes, solution-oriented schemes, index funds, etc. as per their financial plans. One of the primary financial goals for a parent is planning for their child’s education. With high emotional value attached to this goal, one always intends to plan the best for his/ her children.
KYC stands for 'Know Your Customer' and is one of the obligations every investor must fulfil before investing in mutual funds. Through the KYC process, the market participants fetch relevant records of the investors to establish a unique identity for the investors in the mutual funds' records.
The Hon’ble Finance Minister presented the Union Budget 2020 on 1st February 2020, which has proposed specific changes to the present income tax rates, which will be applicable for the financial year 2020-21 and subsequently, Finance Act 2020 has also been enacted. However, the new tax rates carry certain caveats before the taxpayers can adopt the reduced rates. As such, both the existing & new tax rate structures will continue to co-exist.
