Don't ignore tax-saving mutual funds in a beaten-down equity market

Investors are shunning equity-linked savings schemes (ELSS), or tax-saving mutual fund schemes, this tax planning season, say investment advisors. According to them, investors have invested a measly Rs 200 crore in the first four months of the tax saving season, which starts from October to March. A lacklustre stock market, attractive returns from alternative investments in debt and the 'confusion' about the status of ELSS after the implementation of Direct Taxes Code (DTC) have contributed to investor apathy towards these schemes, which served as the introduction to stock market for many retail investors. Though investors' decision may look solid from the short-term perspective, they may be letting go of a chance to create wealth in the long-term by eschewing tax planning MFs, say investment experts.

Source: Economic Times