ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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tax-rated bonds
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speculative investments
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index funds
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tax-advantaged investments
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Detailed explanation-1: -Tax-advantaged accounts, such as an IRA, 401(k), or Roth IRA, are generally a better home for investments that lose more of their returns to taxes.
Detailed explanation-2: -The returns generated by investment funds are not taxed if we reinvest them in other funds. We only pay tax when the returns come into our possession. There is no taxation as long as the capital is invested. Transfers between funds provide another significant tax advantage.
Detailed explanation-3: -Equity Linked Saving Scheme (ELSS) is a type of mutual funds scheme with the added advantage of saving tax. These funds help investors save taxes under Section 80C of the Income Tax Act, of 1961. People who invest in ELSS can get a tax deduction of up to Rs 1.5 lakh.
Detailed explanation-4: -Which of the following are benefits of tax advantaged investments? The best answer is C. Depreciation deductions, depletion deductions and tax credits are all tax benefits.