Jammu & Kashmir, July 17 -- The foundation of effective mutual funds investment for tax savings begins with defining precise financial goals. Investors must distinguish between short-term targets (building an emergency fund) and long-term aspirations (retirement planning or children's education). Equity-Linked Savings Schemes (ELSS), which qualify for Section 80C deductions up to Rs.1.5 lakh annually, serve dual purposes: tax efficiency and wealth creation. However, their equity exposure demands alignment with the investor's time horizon. Those saving for goals beyond 5-7 years benefit most from ELSS's growth potential, while individuals needing liquidity within 3 years might explore alternatives despite the shorter lock-in period.
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