With ELSS Funds [Equity Linked Savings Scheme] save TAx While Creating Wealth:
ELSS [Equity Linked Savings Scheme] funds meaning and What are ELSS funds? An Equity Linked Savings Scheme (ELSS) fund is an open-ended Equity Mutual Fund that helps you in tax saving and provides an opportunity for you to grow your money.
- ELSS mutual funds are qualified for tax exemptions under section (u/s) 80C of the Indian Income Tax Act and people can claim the same by starting an ELSS fund and file ITR.
- These mutual funds invest 65% of the money in equity related instruments that are notified to avail tax benefits.
- Investing in these kinds of mutual funds provide a tax benefit to investors u/s 80C, which is capped to an amount of Rs 1.5 Lakh which is the maximum amount.
To invest in these funds you can either visit the mutual fund company website register online and investor you can contact their fund manager to invest in there mutual fund schemes.
ELSS mutual funds are a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act,
These funds help with capital appreciation and tax benefits.
ELSS funds are available with a lock-in period of 3 years which is 5 years for banks funds and Post Office time deposit of 5 years.
Let’s see some advantages of ELSS funds before investing in it:
- ELSS funds have a short lock-in period of 3years compared to the maturity period of NSC which is 6 years and 15 years for PPF.
- ELSS funds earning potential is high as these funds are equity-linked schemes.
- When investing in ELSS funds the investor can also opt for dividend option to get some gains during the lock-in period.
In ELSS funds the investors can opt ELSS sip meaning: Systematic Investment Plan [SIP], or if the investor wants to invest a large amount once then can opt for Lumpsum investment or One-time investment.
Now let’s see few disadvantages of ELSS funds:
The ELSS funds risk factor is comparatively very high wherein it is very less for NSC and PPF.
Now let’s see how to invest in ELSS:
Before investing search online top 10 ELSS funds and compare the top ELSS funds in 2016, top ELSS funds in 2017 and from the current performance the best ELSS funds 2018 to invest in 2018 and invest accordingly.
Few Mutual fund companies to invest in:
- Aditya Birla tax saving funds.
- Reliance tax saving funds.
- Tata tax saving funds.
- Dsp Blackrock tax saving funds.
- HDFC Tax Saver
- IDFC Tax Advantage Fund
E-filing the ITR is not so hard. if you don’t know then check about the steps to file ITR online.