Exercise extra care in selecting tax-savings funds

Due to the lock-in, there is little that the investor can do in the event of a market downturn, or deterioration in performance, except stay put till that period ends

Most tax payers scramble to make their tax-saving investments during the last few months of the financial year. Investors need to plan properly while investing to meet the Rs 1.5 lakh limit under Section 80C. Not only should these investments help them save tax, they should also offer them sound returns and enable them to meet their financial goals. With the equity markets scaling new highs this year, equity linked savings schemes (ELSS) are looming large on investors’ radars. While these funds do offer many advantages, investors should not enter them without being fully aware of their risks. 

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