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Plan your taxes, earn Rs 3.7 lakh

Spread your tax-saving investments over the entire year and you could earn better returns.

Print Edition: Nov 29, 2007

Plan your taxes
Plan your taxes

Do you squeeze your tax-saving investments in the last three months of the financial year?

Spread them over the entire year and you could earn better returns. If you invest Rs 5,000 in a tax-saving mutual fund (which earns 12% annually) every month instead of Rs 60,000 in three tranches in January, February and March, your investment would be bigger by about Rs 2,700 at the end of the year.

If that Rs 2,700 is invested every year for 25 years in a scheme that earned 12% annually, it would add Rs 3.7 lakh to your retirement corpus

 

 

And we have not even factored in the rupee cost averaging that accrues from monthly investments or the immeasurable benefit of not facing a cash crunch due to tax savings during the "Rush of March".

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