Mutual Funds Investment to save tax

This is little late I guess but I could not stop myself from scripting down my thoughts on it. I called up Mr. Sunil Joshi, finance manager of multinational company for an appointment I could not get through his secretary. I sought to meet a hot shot fashion designer for my cousins weeding dress; she didn’t have time to meet for 3 days. I called up my old school principal, he also was busy for next 1 week. I register a complaint for my new Washing machine buzzer problem, the service engineer was nit available. I asked my maid to come little early for work , even she replied to me in negative. This all was during the month of March. The reason for all this was just one. No not that they all are getting married or are on vacation; all had to fill up the Income Tax. Yes it’s March ending as they say from other side of phone. It seems that whole country is busy in this month to save tax , OOPS! Pay tax, I should say. And I am no exception to it. As a good citizen I also pay tax every year.

My discussion with several mutual fund manager make me feel that every one want to save their funds and avoid paying tax. Your fund manager will present you with some top tax saving mutual fund scheme. Talking to these fund managers I got some ideas of top mutual fund in the market. So in the end even I ended up in investing my money in some open ended mutual fund scheme. There are several pros and cons that one has to look into while investing in these mutual fund. I would share some of my experience with mutual fund with you.

Basically there are two types of mutual fund scheme, i) open-ended and ii) closed ended fund. Mutual funds that save you from paying tax have 3 years of locking period. It means your money is at least block for min. 3 years. These mutual funds are subjected to market risk. All these funds are then invested in buying equity shares and other investment ground. The fund value is calculated on NAV (Net Asset Value) . Your profit depends upon the NAV of that particular mutual fund. In all these the most important factor is the Mutual Fund Manager. He is the one on whose decision the end performance depends. So while investing in mutual fund please get full information of the Fund Manager and also look out for NAV along with last 3-4 years performance of the fund manager. Some of the better knows Asset Management Companies are ICICI Prudential, Reliance Fund Management, Birla Sun life, ING VYSYA, ALLIANCE CAPITAL, HSBC, KOTAK MAHINDRA etc. But please do good research before investing your hard earn money in any of these mutual fund scheme.

In the end I would like to request you all to pay your taxes. It’ this taxes that government utilizes for our benefits by building infrastructures and providing subsidies on important thing.

Your comments and suggestion are welcome.

-Stella