ELSS – TAX SAVING MUTUAL FUNDS
It is fast approaching that time of the year when you will start scouting for the best tax saving options in India. Thus, this is one of the best times to choose ELSS as a tax savings option. Most of the time, we tend to ignore this option without realizing its actual earnings potential as an investment asset class. A diversified tax saving mutual fund, Equity Linked Savings Scheme (ELSS) is one where a major chunk of the corpus is invested into the equity markets.
WHAT IS AN ELSS TAX SAVING FUND?
An investment asset class with the dual benefit of tax savings and investment, Equity Linked Savings Scheme (ELSS) is gaining in popularity these days. As an equity-linked savings scheme, ELSS provides investors with the opportunity to grow their corpus while saving on taxes.
WHAT ARE THE WAYS IN WHICH YOU CAN MAKE AN ELSS INVESTMENT?
ELSS investment can be made either in lump-sum or through the SIP route. There is a lock-in period of three (3) years in ELSS tax savings investment. If you invest through the SIP route, please note that each monthly SIP investment will have a 3-year lock-in period, which commences from the date of making the monthly SIP investment.
WHAT ARE THE AVAILABLE ELSS TAX SAVING INVESTMENT OPTIONS IN INDIA?
In India, you can invest in ELSS funds by choosing either the growth or the dividend option. When you invest in ELSS funds in India using the growth option, you get a lump-sum amount after the completion of the lock-in period. However, in the dividend option, you will get a dividend each time the fund announces a dividend, even during the lock-in period.
WHAT ARE THE BENEFITS OF MAKING ELSS TAX SAVING INVESTMENTS IN INDIA?
ELSS tax saving investments in India has the following benefits:
- Enjoy the dual benefit of tax savings plus investment
- Benefit from a much lower lock-in period compared with other tax savings investment asset classes
- Higher returns due to equity exposure element, plus the returns are tax-free up to 1 lakh
- If you’ve not invested into the equity markets, ELSS is a good way to make a beginning
CAN YOU INVEST IN ELSS ONLINE?
Yes, indeed! You can easily invest in ELSS online through your online trading account. We will generally provide you with a list of tax saver fund options which you can choose from. All you need to do is to open a free mutual fund account with us, select the fund of your choice and make payment online.