BANGALORE: Is it worries you, when it comes to Tax Planning? Tax Planning is a vital issue for the tax payers when it comes to an end of financial year. So what has to be done to ensure that your hard earned money stays in your pocket? Tax Saving Funds is an apt way to answer this situation. A tax saving fund called as Equity Linked Savings Scheme (ELSS) is a mutual fund scheme which deals in investing in equity & equity related securities. Remarkably it has been noted that Tax saving funds have emerged as the best performing fund category with over 21 percent average return in the one-year period to 16 April 2014.

It has been recognized that stock market return has not satisfied the investors over the past five years. It is then ELSS came into picture allowing a tax deduction under the section 80 C of the Income Tax Act. One can invest a sum of 1 lakh for a lockup period of 3 years to save taxes, which will be deducted from the taxable income for calculation of tax accountability.

This approach seems to be a mantra for the individuals bearing high profile risk having an advantage that investors can subscribe to the fund at any period. These Fund companies invest the collected sum into the companies who have tremendous growth.

Funds to be invested are scrutinized based on three criteria: Return, Risk Parameters and Risk adjusted Return Parameter. Risk Return of funds is examined on the basis of 3-5 years and is compared with Nifty return, while Risk Parameters are analyzed well in the selection procedure of funds, for this purpose  funds are compared on the measures viz. variance, downward deviation, standard deviation and beta of the portfolio. Expense ratio and Portfolio turn ratio is also considered. On the other hand Risk adjusted Return Parameter denotes how much excess is generated by taking one unit of risk.

Text saving funds has a great potential of generating money out of your investments. Investing in tax funds is a key approach to preserve your money and thus, conserve your future. Choice is yours.