Which Tax saving scheme or investment is to be selected if there is no previous investment at all

POSTED BY SoniS ON January 5, 2013 11:15 am COMMENTS (3)

Dear Manish,

With so many options in the market today I\\\’m very confused with which Tax saving scheme or investment tool is to be selected? I have no previous investement as of now. Had ULIP 2 years back but have discontinued that. Since it is already Jan 2013, pl suggest which option will be maximum benefitiing for a newbie like me. Have to invest upto 1Lac. If it is FD or MF then which company? what about PPF and how much amount can I invest there?

Pl advise. 



3 replies on this article “Which Tax saving scheme or investment is to be selected if there is no previous investment at all”

  1. SoniS says:

    Dear Lionel,

    Thanks for the response.

    This Quantum Tx plan, which bank is selling this? Also, any idea about HDFC Crest?
    I’m thinking of Post office scheme for PPF. Pl suggest. thnks!

  2. Lionel Michael says:

    One can invest upto 1 Lac under Sec 80 C to avail tax benefits. So your total contribution including PPF and ELSS should amount to 1 Lac. But that too depends on how much is your tax liability. if your tax liability is less, then do not invest the entire 1 lac.
    Invest in either PPF or ELSS depending on your risk appetite. The risk in ELSS is greater than PPF but the amount invested in ELSS can be redeemed after 3 years whereas in PPF the duration is 15 years and in FD its 5 years.
    I suggest you first decide on your risk appetite and then allocate your funds in ELSS, FD and PPF. I would suggest 50-60% in ELSS, 30-40% in PPF an 5-15% in FDs.
    The fund suggested above i.e. Quantum Tax saving fund is a good fund. You can also look at HDFC Tax saver fund which has good long track record and a good fund management team.
    Hope the above information helps you. All the Best with your investments.

  3. tax saving should always be integrated with your financial goals. So assuming you are saving for retirement, park some money in PPF and a good ELSS fund
    like quantum tax saving which is a good fund with low expense ratio

    from next financial year start tax saving from April itsel by regular investing in PFF and ELSS funds

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