What are the various tax-saving options offered by mutual funds?
A. There are two types of tax-saving funds, equity-linked savings schemes (ELSS) and pension funds. ELSS schemes are basically diversified equity schemes, which have a three-year lock-in. Investments heresubject to a maximum of Rs 10,000receive a tax rebate of 0 to 20 per cent depending on the income slab. As these are equity instruments they have the maximum risk-return potential among all asset classes.
