Padma asked, Hi Girdher,.I am 27 years, married, no kids. I had planned to invest 2000rs in SIP MFs from this year April. I have a holding of Rs.1 lakh from previous occasional one-time investments in ELSS. But after seeing the market going down steeply and my previous investments at loss, I have lost the hope on MFs and decided to drop the idea of putting some money into it. What is your take on my decision? Can I opt for some other saving avenues other than FDs & MFs for better returns?

Sushil Girdher answers, I have always advised that only such investors who are disciplined in terms of regular investing and have a long term investment horizon would benefit from the equity investments. As you have used the SIP route, at least your average cost might be lower and it is just a question of holding on to the investment for a longer time horizon. MFs may not be suitable if you require the funds in a short term time frame and you would be better off in terms of investing in safe debt instruments such as Time deposits with bank or post office. In case you want to invest a bulk amount in MF then you could use Systematic Transfer Plan (STP) route where your bulk amount is invested in debt funds and is systematically transferred to equity MF. This method essentially symbolises the SIP investment mode and again helps in reducing the overall risk of price fluctuations.

We want to invest interest gained on National Saving Certificates in REC or NHA bonds. Can we get benefit under Sec. 54-EC ? Babu hai Choudhari , Ahmedabad

I sold my plot in Dec2007 and got Long Term Capital Gain of about Rs.7.6 Lacs. Currently there is no TAX Saving Bonds Scheme available from NABARD, REC & NHAI where this amount can be invested to save tax? VK Gupta- Sonipat

The readers who have earned long term capital gains on any asset and were waiting for the bonds in the market for claiming exemption u/s 54EC should rejoice as the Rural Electrification Corporation Ltd has come to market for subscription of its Capital Gains Tax Exemption Bonds - Series-VIII which opened on 28th May 2008 .Further details can be from the links provided below

Issue Highlights of 54EC Bonds - Series VIII Information Memorandum of 54EC Bonds - Series VIII Application Form of 54 EC Bonds - Series VIII (SAMPLE) (Application Form can be downloaded from the website : http://rec.rcmcdelhi.com)

Have you read ?

Interest on REC Bond Is Taxable Yearwise!