SAVE TAX @ ZERO COMMISSION ELSS AND EARN HIGHER RETURN
Long gone are the days when the only long-term investment option made you wait around ten to fifteen years for the insurance policy to mature, only to fetch poor returns. Now, investors are literally bombarded with different types of mutual funds to suit their investment portfolio. One of the best long-term investment options is ELSS funds. This article will serve as an investment guide in ELSS mutual funds and how it can help you achieve handsome returns.
What is ELSS?
ELSS, also known as equity-linked savings schemes are commonly known as ELSS tax saving mutual funds owing to their tax-saving features. ELSS mutual funds invest at least 80% of their investment portfolio in equity and equity-related securities. Investments in these mutual funds are entitled to a tax deduction of up to Rs 1.5 lac under Section 80C of the IT Act, 1961. As an investor, you can save as much asRs 46,800 per annum by investing in ELSS tax saving funds. What’s more, ELSS mutual funds are accompanied by a mere three year lock-in period, that also happens to be the shortest lock-in period against any other Section 80 C investments. Thus, these mutual funds rightly offer the dual benefits of wealth creation and tax saving.
Following are some of the benefits of investing in ELSS mutual funds
- Lowest lock-in period
Although the markets are flourished with different types of tax-saving investment options, ELSS mutual funds enjoy the lowest lock-in period of just three years. If you compare ELSS against PPF (public provident fund) and FD (fixed deposit) that have a lock-in period of 15 years and 5 years respectively, ELSS funds are quite desirable among investors. - Higher ROI
Since ELSS mutual funds invest chiefly in equity and equity-related instruments, the returns earned of ELSS schemes are much higher than any other tax-saving investment options, such as PPF or FD, etc. ELSS funds have continually earned their reputation in the market by offering returns above 12% p.a. when invested for a long duration, say 10 years or more.
- Flexibility with ELSS funds
There are some investment options like Unit-Linked Insurance Plans (ULIP) that have the potential to fetch similar returns like ELSS funds. However, these tax-saving havens do not offer flexibility to their investors. Contrastly, ELSS mutual funds do not make you bind to any particular mutual fund scheme. If you are not satisfied with your investments, you have the liberty to switch to a different scheme. However, in case of a ULIP scheme, if you are unhappy, you can only shift and invest in mutual funds providedby that ULIP scheme. - Investor friendly
Youcan invest in ELSS funds with an amount as low as Rs 100. Often investors decide to invest in ELSS via a Systematic Investment Plan, commonly known as SIP as it is quite convenient. Thus, ELSS investments are quite investor-friendly.
SAVE TAX @ ZERO COMMISSION ELSS AND EARN HIGHER RETURN
Long gone are the days when the only long-term investment option made you wait around ten to fifteen years for the insurance policy to mature, only to fetch poor returns. Now, investors are literally bombarded with different types of mutual funds to suit their investment portfolio. One of the best long-term investment options is ELSS funds. This article will serve as an investment guide in ELSS mutual funds and how it can help you achieve handsome returns.
What is ELSS?
ELSS, also known as equity-linked savings schemes are commonly known as ELSS tax saving mutual funds owing to their tax-saving features. ELSS mutual funds invest at least 80% of their investment portfolio in equity and equity-related securities. Investments in these mutual funds are entitled to a tax deduction of up to Rs 1.5 lac under Section 80C of the IT Act, 1961. As an investor, you can save as much asRs 46,800 per annum by investing in ELSS tax saving funds. What’s more, ELSS mutual funds are accompanied by a mere three year lock-in period, that also happens to be the shortest lock-in period against any other Section 80 C investments. Thus, these mutual funds rightly offer the dual benefits of wealth creation and tax saving.
Following are some of the benefits of investing in ELSS mutual funds
- Lowest lock-in period
Although the markets are flourished with different types of tax-saving investment options, ELSS mutual funds enjoy the lowest lock-in period of just three years. If you compare ELSS against PPF (public provident fund) and FD (fixed deposit) that have a lock-in period of 15 years and 5 years respectively, ELSS funds are quite desirable among investors. - Higher ROI
Since ELSS mutual funds invest chiefly in equity and equity-related instruments, the returns earned of ELSS schemes are much higher than any other tax-saving investment options, such as PPF or FD, etc. ELSS funds have continually earned their reputation in the market by offering returns above 12% p.a. when invested for a long duration, say 10 years or more.
- Flexibility with ELSS funds
There are some investment options like Unit-Linked Insurance Plans (ULIP) that have the potential to fetch similar returns like ELSS funds. However, these tax-saving havens do not offer flexibility to their investors. Contrastly, ELSS mutual funds do not make you bind to any particular mutual fund scheme. If you are not satisfied with your investments, you have the liberty to switch to a different scheme. However, in case of a ULIP scheme, if you are unhappy, you can only shift and invest in mutual funds providedby that ULIP scheme. - Investor friendly
Youcan invest in ELSS funds with an amount as low as Rs 100. Often investors decide to invest in ELSS via a Systematic Investment Plan, commonly known as SIP as it is quite convenient. Thus, ELSS investments are quite investor-friendly.
