Tax Planning with the help of MF

#1
Dear Frndz,

If you wants to invet your money in MF for Investments as well as tax savings, you should always go for dividend payout option rather than going for growth option. the benefit in this is you get tax benefit of more than what you invest. look at this example :

Suppose you invest Rs.1 Lakh in Birla Sunlife tax Relief96 whose NAV is 80, you get 1250 units. Now since dividend is announced at 70% (7 per unit), you get back, Rs.8750/-. So, in effect, on a investment of Rs.91250, you still manage to claim Tax Rebate of Rs.33990. This is just an example, some funds even have a dividend yield of above 10% and some Tax Funds (Religare, Sundaram) even declare dividends more than once in a Financial Year.
 

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