How to choose mutual funds to save tax?

Mutual fund as an asset class is gaining a lot of traction lately in India, and investors are investing heavily in different schemes of mutual funds to save income tax. There’s a famous saying in the world of finance, “You cannot avoid two things in life: death and taxes.” Indeed, we cannot avoid taxes, but we can plan to reduce them at least.

What are mutual funds?

Mutual funds are an indirect way to invest in financial securities such as stock, bonds, etc. Here, the fund pools money from several investors, and then the fund manager invests that money in different securities depending on the objective of the fund. The fund manager is responsible for generating returns for you. You do not have to research stocks or other investments since the fund manager will do it for you.

There are myriad mutual fund schemes in India, from diverse …