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<p>To accomplish your personal financial goals, it is paramount that you invest regularly and steadily move towards the goal. Just as it is vital to invest periodically, choosing the right investment tool is equally important. You can also choose to invest directly in stocks, or invest in markets through mutual funds. Knowing the difference between stocks and mutual funds is essential to start your investing journey. If you are in a dilemma of&nbsp;investing in mutual funds vs stocks, this article will help you in your decision-making process.</p>

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<p style="display:none">Having secured the fundamentals it is time to ensure that the hard work you put in to earn your money does not go wasted and you make your money work as hard as well.</p>

<h2 style="font-size:21px"><strong>Building a comfortable path</strong></h2>

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.

When it comes to investing in mutual funds, investors have a wide range of options to invest, like equity funds, debt funds, hybrid funds, solution-oriented schemes, etc. Even within the universe of equity funds, SEBI allows the mutual funds to offer schemes under different categories like large-cap funds, ELSS, small-cap funds, value funds, etc. 

<p dir="ltr">Traditionally, India has had a higher household savings rate. However, such savings went towards traditional investment products, which used to offer guaranteed returns, even when such returns were relatively lower. The love of Indians towards physical assets has been eternal, and thus, a part of savings used to get channelized into tangible assets like gold, and real estate.</p>