The close of the financial year is just around. With just 2 months left in the financial year, most of us will be going through old bills, deposits and expenses to figure out how to save taxes. There are many financial instruments available for you to invest your hard earned money. However, while you are busy trying to save on taxes, have you generally wondered if you could save taxes as well as try to create wealth for your future at the same time?

This is not an impossible feat. Investors across the world can tell you that investing in the right instruments can not only help you save on your taxes but also can help you start creating a financial nest for your future.

Where should you start?

While tax saving is your priority, you should also consider how you can start creating a secure financial future. You should ideally start by understanding the corpus you want to achieve. Once you get an idea, you should know when you would want to see the corpus being turned into reality. Plan for short-term as well as long-term, so that you can plan your finances as per these time horizons.

Invest to save: Taxes and a bit of wealth

The journey of a thousand miles begins with a single step. If you know what you want to achieve, the time to start investing and saving is now. Traditional forms of investment tools including fixed deposit, Provident Fund etc. are good modes of saving on taxes. However, while they generate a fixed return, they are generally unable to create the wealth that you need after accounting for inflation. You have the option of investing in ELSS: Equity Linked Savings Schemes – these not only fulfil the purpose of the tax saving but can also help you get better returns.

How do non-traditional modes help?

Investments in ELSS under Section 80C are exempt from taxation. Investment of Rs 1,50,000 in non-traditional modes like mutual funds can help you save Rs 46,350 in taxes and earn market linked rates of return.

Always consider splitting your ELSS as per your investment time horizon. If you have a short-term horizon which will be fulfilled in the next three years, choose a fund that will help you achieve that. The same theory applies to long-term horizons as well.

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Tax saving calculations shown are for illustrative purposes only. Actual benefit will vary from person to person. The user/investor needs to verify all the facts and circumstances with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time.

Standard Chartered Bank does not provide any investment advisory services under the wealth proposition. Standard Chartered Bank in its capacity of a distributor of mutual funds or while referring any other third party financial products may offer advice which is incidental to its activity of distribution/referral. Standard Chartered Bank will not be charging any fee/consideration for such advice and such advice should not be construed as ‘Investment Advice’ as defined in the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 or otherwise. Mutual Fund Investments are subject to market risk. None of the schemes mentioned herein provide guaranteed returns. ELSS returns are linked to the performance of the market and can vary over time. Please Read scheme related documents carefully prior to investing.