Markets have corrected, it’s the best time to Invest in mutual funds

Investing in tax-saving options is essential. But your focus should not only be saving taxes but also should make your investments grow into a considerable amount over time and help you realise your goals.

  1. Introduction
  2. Mutual Funds
  3. National Pension Scheme
  4. Public Provident Fund
  5. Real Estate Investment
  6. Stock Market Investment

Introduction

As there are multiple options for investment on offer today, it may seem to be a daunting task to choose the right one. While investment plans are dependent on the individual’s risk profile, time horizon and other factors, some investment platforms offer excellent options for you to start your journey towards wealth accumulation and growing rich.

1. Mutual Funds

Mutual funds are one of the most sought after investment options in India. Amongst mutual funds, equity mutual funds, in particular, are the top-rated. This is because of their potential to provide overwhelming returns. Some of the best performing funds have generated Cumulative Average Growth Returns of up to 20% in a decade. The point to note is that with such high rewards comes high risks as well. Also, it is advised that you consult financial experts before making any decisions. There are many types of portfolios and styles of investing, but with mutual funds, you can access the best of all to generate excellent income. Investing in these funds is pretty simple and straightforward. Also, you can start investing in mutual funds with a sum as low as Rs 500 a month. If you find it difficult to shortlist the right plan that suits your profile, then you can choose to invest in our fund plans handpicked by our in-house experts. 5 Best Investments to make you rich

2. National Pension Scheme

The National Pension System or NPS is a government-backed retirement cum pension scheme. With the sovereign guarantees backing the scheme, you get the much-needed safety for your investment. This scheme provides a monthly pension when you retire. Also, investing in the NPS qualifies you for additional tax benefits under Section 80CCD (1B) depending on the type of NPS account you hold. This deduction is over and above regular deductions available under Section 80C, Section 80CCC and Section 80CCD where you can save up to Rs 1.5 lakh a year. Furthermore, under Section 80CCD(2), if you are in the high tax bracket, you can have your salary structured such that your employer contributes 10% of your salary without you having to do the same.

3. Public Provident Fund

If you are a risk-averse investor, then the Public Provident Fund (PPF) is the best suitable investment option for you. PPF is one of the most popular tax-saving investment options for the common man. Also, the scheme is easy to start for those who are not internet savvy. You can open this account in a bank or even in a post office. This scheme comes with a lock-in period of 15 years, with an option of extending your account in a block of five years. If you are a salaried person, then you may find this an excellent way to set aside a certain sum every month to invest in PPF. If you require a loan, then you can avail one against your PPF balance, and even make a premature withdrawal after the 7th year of opening the account. One of the most attractive features of a PPF account is that the interest that you earn on this fund is free from taxation. You have to invest a minimum of Rs 500 a month, while you cannot invest more than Rs 1,50,000 over a year.

4. Real Estate Investment

Real estate is a good investment option for those who have abundant money in hand. It is an excellent option for long-term investment. The Real Estate Regulation and Development Act (RERA), which came into practice in 2016, has further boosted this market. The industry is well regulated with safety measures in place for buyers and sellers. The fast-paced development and urbanisation, the demand for real estate has witnessed a rise like never before. The availability of accessible home loans has removed the barriers to affordability. It allows buyers to save a significant amount of income tax annually until the payment of the home loan.

5. Stock Market Investment

Stock investments may not be simple to engage in; it requires monitoring of the performance of your stocks in real-time. Though there has been an introduction of taxing long-term capital gains, the post-tax returns offered by stocks is unmatchable. For investors who can’t afford to invest a considerable amount, stock markets provide the advantage of various small, mid and large-cap stocks such that you can invest in all of them by creating a balanced portfolio. You can adjust your portfolio depending on the risk you are willing to take. To know more about the best funds and plans to invest in, visit ClearTax.in/save.

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