Best ELSS(Tax saving mutual funds)

[nolimit]

If the reinvestment amount is eligible for tax deduction, then does it also means the lock in period for those units (bought under reinvestment) will be 3 years from the date of purchase?

[wcnw]

Originally Posted by nolimit

If the reinvestment amount is eligible for tax deduction, then does it also means the lock in period for those units (bought under reinvestment) will be 3 years from the date of purchase?

yes... also however do note that you can sell off the units after 3 years and invest in the same MF again.. This way you do not need to add more capital for tax saving. You need to invest only for the 1st three years.

[nolimit]

Originally Posted by wcnw

yes... also however do note that you can sell off the units after 3 years and invest in the same MF again.. This way you do not need to add more capital for tax saving. You need to invest only for the 1st three years.

Thanks for a great help.

Also, It means that if someone invested in 2003 and got a dividend every year, units bought, either direct buy or via reinvestment, in 2003 and 2004 can be redeemed this year without tax penalty?

[wcnw]

Originally Posted by nolimit

Thanks for a great help.

Also, It means that if someone invested in 2003 and got a dividend every year, units bought, either direct buy or via reinvestment, in 2003 and 2004 can be redeemed this year without tax penalty?

nope...
if you invested Rs 2000 in 01 Jan 2003 -- only 2000 Rs can be redeemed in 02 Jan 2006

If you got 10 units worth 500 rs on 30 March 2003 as dividend which was reinvested -- this Rs 500 can be redeemed only in 31 Mar 2006

[nolimit]

Originally Posted by wcnw

nope...
if you invested Rs 2000 in 01 Jan 2003 -- only 2000 Rs can be redeemed in 02 Jan 2006

If you got 10 units worth 500 rs on 30 March 2003 as dividend which was reinvested -- this Rs 500 can be redeemed only in 31 Mar 2006

Great Help ....Thanks.

[rizzingsun]

Technically yes .. if one want any kind of tax benefit on investment there is a lock in period... but in these fund one can go ahead and invest ... without claiming 80C., then there wud not be any lock in period.
Franckly I really do not know how tax department is going to keep track of SIP-ELSS investmetns.. Maturity wud be calculated 3 rd yr after the yr of claiming exemption.

i.e if total investment in magnum tax fund via SIP say 2k for the yr 2006-07.total investments say 24k. ... we can not withdraw money till 31-3-2010
This is generally self delaration.. The capital gain tax wud be applicable on the amt received afterwards.It wud be damn complicated calculation wrt SIP investemtns.
this is my understanding.. let me know ur views on this.

[Ankit Jain]

I want to invest some of my money to get a tax exemption under sec 80C....in which mfs i shuld invest my funds...other than mfs wht are the best

[kc_624]

i am not an expert but as per my knowledge....Magnum Taxgain is one among the best performing mutual fund.
i think better to go for tax saving fixed deposits as the other investment as many banks are offering high intrest rates now.

[Ankit Jain]

Originally Posted by kc_624

Magnum Taxgain is one among the best performing mutual fund.
.

I have already invested 50000 on tht... Other 50000 i want to invest in some other mfs or fds or somethng else for diversification...

[niranjan190]

Hi Ankit,
I don't think there is a better option than mutual funds for saving tax ( assuming better returns.)

Apart from Magnum tax fund - for diversification , Assuming the large cap exposure you had with magnum fund, i would suggest
20000 - Index fund
20000 - Sundaram Midcap
10000 - Any small cap fund. ( They are considered risky, so have small exposure.)