There is an easy way in which an individual can understand whether a mutual fund investment would be covered under the tax deduction clause. This is by checking the type of mutual fund that the investment is made in as there are clear distinctions made between the different types of schemes so it is not very hard to identify the funds that actually get the required benefit. One of the points is that the benefit is available to Equity Linked Savings Scheme (ELSS) and these are equity funds that have permission for the tax benefit. In addition there are simple equity oriented funds like equity diversified funds that do not have the tax benefit. The ELSS funds are directly and clearly identified so by looking at the category it might be possible to have an idea of the overall situation. In addition for first time investors in equity the funds that are covered under the Rajiv Gandhi Equity Savings Scheme there is also a onetime tax deduction available.
