If you are a mutual fund investor, you must be aware that one of the most feasible and preferred routes of investing is systematic investment plan or SIP. This offers an array of benefits, for obvious reasons. First, it allows the investors to make the most of rupee cost averaging.
Under the rupee cost averaging, investor can average out the cost of acquiring an asset when they buy its units at different prices over a period of time. Second, it inculcates a sense of financial discipline. Third, it allows investors to let their investment grow considerably so long as they stay invested over a period of time.
Here, we randomly handpick one mutual fund scheme (Edelweiss Flexi Cap Fund) and monitor its return since inception to evaluate how much the investment would have grown since its launch if the investor were consistent over a period of time.
For instance, if someone were investing regularly into Edelweiss Flexi Cap each month in form of SIP for just one year, the investment would have grown to ₹1.13 lakh by investing a total of ₹1.20 lakh.
In two years, this investment of ₹10K every month would have spiked to ₹2.65 lakh, whereas the total investment stands at ₹2.40 lakh. In three years, the total return would have reached ₹4.59 lakh whereas the investment stands at ₹3,60,000. In five years, total investment would have grown to ₹9.35 lakh by investing a total of ₹6 lakh.
In two years, this investment of ₹10K every month would have spiked to ₹2.65 lakh, whereas the total investment stands at ₹2.40 lakh. In three years, the total return would have reached ₹4.59 lakh whereas the investment stands at ₹3,60,000. In five years, total investment would have grown to ₹9.35 lakh by investing a total of ₹6 lakh.
Deduction on principal repayment u/s 80C
If you have taken a home loan, you are not only building an asset-you are also able to avail several tax-saving options. While submitting your income tax return (ITR) for the financial year 2024–25 and the assessment year 2025–26, make sure that you avail every single benefit that one can derive about home loan repayment. These provisions may reduce your taxable income and provide significant annual savings for you-with the right steps.
Deduction on principal repayment u/s 80C
The maximum portion of your EMI is allowed as a deduction under Section 80C, up to ₹1.5 lakh annually. This is applicable not only to principal repayment on a house loan but also to other eligible investments like PPF, ELSS, and life insurance premiums. Note, however, that the property cannot be sold within five years of taking it—else the gain is made taxable in the year of disposal. Secondly, this relief becomes effective only once per house when the house is fully constructed and possession is taken.
Deduction on interest under Section 24(b)
Interest on your home loan is tax deductible up to ₹2 lakh every year under Section 24(b), in case the property is self-occupied and is constructed within a span of five years. If the house is rented, there is no restriction on interest deduction, but total loss from house property that can be offset against other income is limited to ₹2 lakh per year according to current regulations. The balance can be carried forward for 8 years.
