If you’re looking for an investment vehicle that will help you save tax, mutual funds are an ideal option. There are a variety of mutual funds based on what securities they invest in. As an investor buys units of a fund, the fund increases in value. When this happens over time, there are dividends and capital gains that accrue. Depending upon the duration of investment, i.e long or short term, and the type of investment, i.e equity or debt, one is able to save a considerable amount of tax on either the dividends or the capital gains.
