Everyone wants to save tax as well as grow their money by investing in such plans like mutual funds, fixed deposit etc.Learn how to save tax with mutual funds..

1. HOW TO OPTIMIZE TAX WITH
MUTUAL FUNDS

2. HOW TO OPTIMIZE TAX WITH MUTUAL FUNDS
 It is tested fact that mutual funds are amongst the most tax
efficient investment means, but in order to make the most of
them, it is important for an investor to invest in the right kind
of fund.
 It is extremely crucial to keep in mind several factors before
choosing the right fund – one should always go for long term
investments as these have more tax benefits. Investing in
equity funds will bear no tax on long term capital gains.
 There are a host of other tricks and advantages to buying
mutual funds. However, investing in equity mutual funds is a
better than investing in individual stocks.
 It is a particularly good for investors who don't want to spend
a lot of time picking and choosing individual shares or for
amateurs who don't have a lot of money to invest.

3. OPT FOR EQUITY LINKED SAVING SCHEMES (ELSS)
 ELSS funds provide twice the benefit in comparison to diversified
equity funds. Along with tax sops on investments they also save
tax on long-term capital gains.
 These funds are special equity schemes, in which an investor has
to invest has to invest 80% of their corpus in equity and these
investments get locked in for a 3 year period. These investments
give an investor the benefit under Section 80C. For e.g.,
investments of up to Rs. 1 Lakh in such funds, can reduce the
same amount from your gross income.
 ELSS are the best investment options out there that provide an
extremely simple way of investing in the stock markets and save
tax while you’re at it. As these are equity based schemes, ELSS
fund has the ability to provide better returns in comparison to
most other options that fall under Section 80C. Additionally, in
accordance to current law, an investor in ELSS is eligible to tax
free dividends and his long-term capital gains remain tax free.

4. WHAT ABOUT EQUITY FUNDS?
 Diversified equity schemes are a decent investment
considering that capital gains in equity funds below one year
are taxed at a rate of 100% and over a year are tax-exempt.
 This option may be best exercised employing a Growth plan
offered by mutual funds. The first objective of a Growth plan
is to give investors long-run growth of capital.
 The dividends paid in Dividend Plans are usually tax free,
and no distribution tax is deducted. However, whenever we
tend to purchase or sell equity shares a Securities
transaction Tax, STT, of 0.25% is paid and STT is deducted
again from your redemption value at the time the investor
redeems their investment.

5. OTHER WAYS TO REDUCE THE TAX BURDEN
 Investors can also gain from double indexation benefit (when
an investor invests late in one financial year, for e.g., March 28,
2014, and redeems early in the next financial year say on April
2, 2015, in this case the index of both Financial Year ending
March 2014 and March 2015 to get this benefit will be used
even if it is for as little as 366 days) provided that both the
financial years' index adds up to more than 10%.
 With the dividend option, dividend is tax free. Although
dividend distribution tax is deducted at source it also comes
out of the investor’s NAV. So one ends up paying 10%. Also, an
increase in NAV in addition to the dividend distributed, is
taxable the same as in the growth option.
 Most debt fund investors with a reasonable horizon for
investing for more than a year, go for the growth option, this
option by and large proves to be the most tax efficient for retail
investors in the lower tax brackets.

6. CONCLUSION
Hope the above information we shared with you must be
helpful for save your tax. So, if you are planning to invest in
an ELSS fund, you should keep in mind these tips and grow
your money.
An old saying: “ The principle involved here is time-honored and
true: and that is it’s your money." -Robert Dole

7. THANK YOU !