How does investing in Share market help?

Hi,
I am worried about the TAX deductions in my salary...
I wanted to know how does investing in share market help save tax...

If you are investing on some stocks directly in market then it is not going to help u save tax.. but yes if u invest in certain Mutual Funds which has a lockin period, will help u in s aving tax..

By directly investing in Stock market you can't get tax exemption but point to be noted is "ANY INCOME THAT IS GENERATED FROM THE STOCK WHICH YOU HAD HELD FOR MORE THAN 1 YEAR TERM WILL COME UNDER LONG TERM CAPITAL GAIN AND EXEMPTED FROM TAX" (straight into your pocket) so think about it. So you can save your hard earned money.

Another factor to be noted: It is possible to earn excellent returns from Stock market if you invest properly and get lucky, this can overcome the effect of tax you otherwise would have paid/saved.

For example, you may save around 30 k as tax on a one lakh investment for that year. The same one lakh, if managed well, can generate more than 60% returns within an year in stockmarket (if everything goes as per you plan-there's equal amount of risk though) From that you're still left with more money what you would otherwise have...

bottomline: If you're confident of earning 50% returns over a span of one year in stock market, no need to worry about other tax saving instruments.

To be on safer side one can go for mutual funds and ELSS which give tax benefits, as Rakesh suggested.

I would recommend you to invest in tax mutual funds which will lock your money for 3 years an helps you to get tax benefit.

hi everyone...
welcome to this forum..
thanku..

regards,
phe9oxis,
http://www.guidebuddha.com

hi every one...
Thanks for sharing this ...

regards,
phe9oxis,
http://www.guidebuddha.com