NPS or tax saving mutual funds

PrasannaS 1
Viewed 1815

Hi,

I am looking for an investment for tax saving benefits and I decided to go with tax saving mutual funds. But after reading a blog on DTC at the below link, I am sceptical to go with the tax saving mutual funds as these may not be considered for tax exemption if DTC is implemented. http://www.pankajbatra.com/india/new-direct-tax-code-dtc-highlights/ Now, I am planning to take NPS. But I am still confused whether my decision to go with NPS over tax mutual funds is correct or not. Can you please guide me.

section-80c tax-deduction elss mutual-fund tax-saving nps
1 Answers

Benefit for tax saving mutual fund would not be continued once direct tax code is applicable. But this is not going to happen from this financial year too.

So you can invest into tax saving mutual funds in FY 2012-13 as well without any worry. From next year, you can start investing into NPS.

Advantage of ELSS (equity linked saving scheme) tax saving mutual funds over NPS is lock-in period. If you need amount back in a short period (after three years), you should go for ELSS. NPS is product for retirement amount.

Pankaj Batra5212
Related