Avoid last minute rushes

Benefits that ELSS and ULIPs offer are definitely alluring. Higher returns, a 30% tax benefi t on the investment amount, zero capital gains tax, tax-free capital appreciation et al, are lucrative offers by all measures. ULIP combines the dual portfolio of investment and insurance into a single entity. ULIPs have received overwhelming response as they relieve the investment and insurance seeker from the hassle of tracking a portfolio of products. ELSS, on the other hand, can be looked at as tax saving options with high equity exposure. They feature funds that have to keep at least 80% of their cash invested in equity at all times. But a stampede towards investing in these funds at the end of the financial year to save taxes dilutes the basic principles of investment. As Amit Saxena, CEO, Planman Financial, voices, “A last minute dash would more oft en than not leave an investor in schemes that match neither his needs nor requirements.” That’s one reason this column comes at the start, and not at the end of this financial year; plan ahead :-)

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Source : IIPM Editorial, 2006

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