NPS or tax saving mutual funds


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. 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.

asked May 05 '12 at 15:45 by PrasannaS 1111

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.

answered May 24 '12 at 22:56 by Pankaj Batra 5.2k320


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Asked: May 05 '12 at 15:45

Seen: 2,577 times

Last updated: May 24 '12 at 22:56