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Best MFs for tax benefits? Here they are

February 25, 2009 14:31 IST

Are you always at a loss while planning your finances?

Are you aware of the investment options available in the market?

How best can you plan your finances? What are the crieria for evaluating an investment option?

Are mutual funds profitable investment options? When and how should one buy mutual funds?

In an hour-long chat on Wednesday, financial planning expert Vicky Mehta offered some valuable tips. Here is the transcript:

vicky says, hi, good afternoon everyone. let's begin the chat session.

gayathri asked, I dont have much knowledge regarding this sip?will u please explain what is this sip means?do we have to invest every month or year?if so, then how many months or years we have to invest to get good returns?
vicky answers,  at 2009-02-25 12:59:04hi, an sip i.e. systematic investment plan is simply a mode of investing in mutual funds. it entails making investments in a mutual fund in a staggered manner instead of making lump sum investments. ideally, you should have an sip that runs over 18-24 months. also your investment horizon should also be at least 3-5 years.
Administrator says, 

aruL asked, Should I continue to hold HDFC growth, Kotak Opportunities, DSP top 100, please advise
vicky answers, hi, dsp br top 100 is certainly among the better managed funds in the large cap segment.
samad asked, what are the tax saving options available for salried class
vicky answers, hi, you can consider making use of conventional 80C avenues i.e. ppf, elss, nsc and tax saving fds. also, we recently put up an article on tax saving tips for salaried individuals; to read the same, pls click at
Ravisubramaniam asked, I am invest by sip 30K/month in mutual funds since 2005.the funds are Hdfc200,reliance vision,magnum contra and fidelity equity.Should i continue or quit because of the meltdown in the nav values?
vicky answers, hi, hdfc top 200 and fidelity equity are well-managed funds. you can continue to stay invested.
sachin asked, pl suggest the best elss
vicky answers, hi, there is no such thing as the "best elss". even tax-saving funds (elss) can have their unique characteristics, you need to invest in one that is right for you. franklin india taxshield and hdfc tax saver are some of the better tax saving funds.
vivek asked, i had invested in SBI tax gain fund in jan 06 of RS 50000 in dividend reinvestment option. after that i have got didvdend, which automatically invested in that fund.... now i can redeem full units in 2009 or only invested units made in 2006. and when the rest units can be redeemed. will i get tax benefit us 80c on those invested dividend also.... plz reply it
vicky answers, hi, the dividend reinvested will qualify for a deduction under section 80C. also, the same will be subject to a 3-yr lock in from the date of investment.
rakesh asked, is this the good time to invest in MF a lump sum amt.than sip??? as navs are already lowest
vicky answers, hi, i would recommend an sip over a lump sum investment even a this stage. of course, you can make lump sum investments in smaller amounts to capitalise on sharp market dips.
Pankaj asked, How to Identify a better Tax Saving MF Scheme ? Your Suggestions ?
vicky answers, hi, look for a long term track record (3-5 years). see how it fares on risk parameters like standard deviation, sharpe ratio. the fund should ideally have a fluid (i.e. non restrictive) investment style.
hello asked, I stopped my ELSS SIPs few months ago, can I continue again & activiate them?
vicky answers, hi, yes, the sip can be revived under the same folio number.
nandini asked, Over the last 2-3 years, i had invested around 1.5-2 lakhs in some of the top mfs like hdfc tax saver, magnum tax gain, fidelity etc...but due to market crashing i have lost heavily...pls. suggest where should i park my funds in FY 09-10.
vicky answers, hi, ideally your risk appetite and investment horizon should help you determine whether you should continue to make investments in tax savings funds. if you believe that you cannot taken on the requisite degree of risk or dont have a long enough investment horizon, maybe nsc, ppf and bank fds are an option. but for risk taking investors, elss continue to offer an attractive proposition.
LageLage asked, Sir, What is the likelyhood of SBI tax gain fund paying dividend this year. Thanks
vicky answers, hi, dividends are declared based on the fund's performance and at the discretion of the fund house. it is not possible to predict if a fund will declare a dividend.
china200512 asked, what are the best tax saving Mutual funds for investing
vicky answers, hi, have replied to a similar query earlier in the chat. request you to refer to the same.
rahul asked, hi,may i know about some good funds for elss which can help in retirement planning pls.
vicky answers, hi, if you wish to plan for your retirement, would recommend that you consider creating a portfolio consisting of various asset classes like equities, debt, gold. also, the allocation to various asset classes needs to change over a period of time, as you close in on your retirement date.
guest asked, I invested in Fidelity Tax saving fund in feb2006.On 28 feb , it will get complete 3 years lockin it wise to remain invested or insted enter in new tax saving elss and avail tax benifit? please reply...
vicky answers, hi, in its short history, the fund has pitched in a competent performance. you can consider staying invested.
karkala ramesh asked, I retired from services just last month. I plan to invest about 2.00 lakhs in MF which can get me best quarterly returns. Please suggest best entries.
vicky answers, hi, mutual funds do not offer assured returns. being market linked avenues, even the risk of capital erosion exists. if you are willing to take on a certain degree of risk, mips (monthly income plans) are an option. if you are seeking assured returns, you should consider making investments in the post office monthly income scheme (pomis) and the senior citizens savings scheme.
jainy asked, which is better option - GROWTH OR DIVIDEND TO BUILD A CORPUS?
vicky answers, hi, neither is better or worse. you should make a choice between the two based on your need for liquidity. to know more, please click at
kishor asked, hi, ppf should be prefered to elss or vise-versa
vicky answers, hi, make a choice based on your ability to take on risk. if you are a high risk taker, make a greater allocation to elss and a smaller allocation to ppf, and vice versa.
vin asked, What is your opinion about Principal personal Tax Saver?
vicky answers, hi, the fund hasnt performed well; also, there is a degree of ambivalence in its investment style.
andycool asked, if i dont look for tax saving, isn,t it better to do directly buying stocks than investing in MFs. What are the pros and cons?
vicky answers, hi, we have dealt with this topic in an article. to read the same, please click at
vicky says, looks like we have run out of time. thank you all for participating in the chat. if you have any queries, please feel free to write to me at