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Equity-linked Savings Schemes are a smart way to save tax.
The following links will be helpful for you.
Equity-Linked Savings Schemes are by far the most exciting of all the tax-saving schemes: the returns offered by some of the mutual fund schemes over the past 12 months have been more than 100 per cent. But be warned: if the returns are high, so are the risks..... Read more at http://in.taxes.yahoo.com/taxelss.html
Statistics have proved that over the long term, equities are known to have outperformed other forms of investment.
Some other tax savings instruments like PPF, NSC, NSS, bonds etc do offer tax benefits but now at lower returns. Hence ELSS is an attractive investment avenue for those who seek tax savings coupled with the potential of high returns.
One interesting investment option that emerges for the great Indian middle class salaried Indian in these resurgent times are the Equity Linked Saving Schemes (ELSS) of Mutual Funds. ELS schemes offer tax rebate under Section 88 for an investment upto a maximum of Rs. 10,000. These schemes typically bestow on their investors two distinct advantages namely – tax exemptions under Section 88 and capital appreciation due to investment of at least 80 per cent of their corpus in the equities markets. An investment that could reap rich dividends in resurgent times!.................. Read more at http://www.indiainfoline.com/mufu/feat/idb1.html
One technical term used in these is "Lock in period-which means the minimum time the shares/stocks/mutual fund units have to be kept. If sold before that period, tax will be calculated . Some complications abt which rates will be taken (but the second link should help in this too)"
Regards
Kanuj
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