{"id":3495,"date":"2013-09-19T21:29:43","date_gmt":"2013-09-19T15:59:43","guid":{"rendered":"https:\/\/blog.fundsindia.com\/blog\/?p=3495"},"modified":"2018-07-13T18:07:34","modified_gmt":"2018-07-13T12:37:34","slug":"how-to-save-tax-on-salary-and-build-your-investment-kitty","status":"publish","type":"post","link":"https:\/\/www.fundsindia.com\/blog\/mf-research\/mutual-funds\/how-to-save-tax-on-salary-and-build-your-investment-kitty\/3495","title":{"rendered":"How to save tax on salary and build your investment kitty"},"content":{"rendered":"

\"Salary_Taxes\"<\/a> It\u2019s the beginning of the tax season. Likely that your company\u2019s accounts\/tax department will start asking you to submit your \u2018tax-saving\u2019 \u00a0proof, if you have to escape or reduce your tax burden.<\/p>\n

A hastily prepared rent receipt and an express visit from an insurance agent and you may think your job is done.<\/p>\n

Folks who take the \u2018follow the herd\u2019 approach, miss out on smart ways to save tax and earn superior returns. Avoid falling into that groove.<\/p>\n

First, know a few facts about the common ways of saving on taxes:<\/p>\n

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Most people focus on expenses that would fetch them tax deduction. These expenses include children\u2019s education expenses, home loan repayment or payment of insurance premium. These save taxes to some extent alright but it is still money lost, not money gained.<\/p>\n

Did you know that you can serve the dual need of saving taxes and building a portfolio with good returns, if you took your Section 80C investment options seriously?<\/p>\n

Yes, start looking at the \u2018investment options\u2019 that will fetch you medium to long-term superior returns. In this category you have the traditional investment options such as Employee\u2019s provident fund (EPF), Public provident fund (PPF), NSC, 5-year tax-saving deposits and equity-linked savings scheme or ELSS.<\/p>\n

ELSS or tax-saving mutual funds as they are called, perhaps offer you the best deal in terms of superior tax benefits and higher returns in the long term. But before that, what exactly are these funds? They are simply diversified equity funds that invest in stock markets and additionally provide a tax deduction on the principal amount you invested, in the year of investment.<\/p>\n

Yes, agreed that these investments, like other equity investments, cannot offer guaranteed returns like your fixed income options. But read on to know how they deliver superior results for you:<\/p>\n