TIP FOR CHILD EDUCATION.

The Children Education Allowance Act encourages children’s education by granting exemption of Rs 100 per month per child in income tax( limited to two children).

If we assume that a child is schooled for 14 years and Rs 1200 is saved per year for one child, we can invest this for 14 years at 20 per cent per annum in any diversified equity mutual fund which will give Rs 1 lakh in the worst case scenario. This way, you can prepare for the more expensive education that your child may need in the last years.