What Are ELSS Funds? ELSS stands for Equity Linked Savings Scheme. Put simply, the funds covered in this type of scheme are equity funds that invest the money in equity and equity-associated investment tools. The most interesting thing about ELSS funds is that tax benefits offered to the investors. They can choose to save taxes according to section 80C of the Income Tax act.
ELSS funds are considered multi-faceted equity fund. These funds invest primarily in a set portion of registered business stocks in accordance with their investment objectives. When it comes to shortlisting the firms, market capitalization of the companies and industrial sectors are taken into account. What Are ELSS Funds? These funds aim to optimize asset appreciation over the long term. The fund management chooses shares following careful market research in order to generate the optimum risk-adjusted portfolio returns. Learn about tax-saving techniques so you can save more on taxes.
When it comes to adopting the most effective strategies for tax planning, Equity Linked Savings Schemes (ELSS) are the best way forward. Since the rewards depend on stock market performance, these funds may be able to produce better returns than other tax-saving products. The majority of ELSS funds' corpus is generally invested in equities. Under Section 80C of the Income Tax Act of 1961, you are eligible for an income rebate for ELSS of up to Rs. 1.5 lakh in a fiscal year. This can help investors to make a tax savings of Rs. 46,800 if they belong to highest income category.
Want To Calculate Equity Linked Saving Scheme With ELSS Calculator
Read - Best Debt Mutual Funds to Invest In 2023
Apart from the tax saving, there are lots of other reasons that make ELSS funds a safe bet for today’s investors. Let’s get to know them below.
If you are looking for the best ELSS funds to invest in India, it is necessary for you to keep in mind a number of factors that would help you get the best out of it.
Investment Along With Tax Saving
A large number of investors choose to invest in ELSS funds to save taxes as these funds are the only form of mutual fund that allows investors to invest in the stock market while embracing tax benefits. There are different types of tax benefits according to Section 80C of the Income Tax Act. However, before you invest in ELSS, you should ensure that you are backed by a steadfast investment strategy to increase your likelihood of reaching your financial objectives. Tax preparation is usually a part of the same and most investors make the smart use of ELSS funds to reach their long-term objectives.
SIP or Lumpsum
Most investors primarily resort to ELSS funds in order to leverage tax benefits. Due to which, they make a single, large investment in the market. This is due to the fact they don’t have time to save taxes and they have no other option except to invest the entire amount in one go. This may be dangerous, especially if they choose to invest while the market is going up. Kicking off a systematic investment plan (SIP) can help investors average their purchasing cost per unit because ELSS investments are typically associated with long-term financial goals.
Suggested Investment Horizon
Due to the lock-in period of three years, ELSS funds are preferred by many young investors in comparison to conventional options like PPF or NSC. Considering the point that stock investments usually stabilize over a period of 5-7 years, this approach may not be lasting. Short-term investment horizons with ELSS funds are not great due to their inherent volatility.
Read More-
How To Apply For Loan Against Property In 2023?
Best Small Cap Mutual Fund In 2023
Fund Name |
3-Year Return (%) |
5-Year Return (%) |
Quant Tax Plan Direct-Growth |
36.68% |
24.72% |
Mirae Asset Tax Saver Fund Direct-Growth |
24.67% |
16.48% |
Bandhan Tax Advantage (ELSS) Direct Plan-Growth |
31.58% |
16.34% |
Bank of India Tax Advantage Direct-Growth |
25.84% |
15.99% |
Kotak Tax Saver Fund Direct-Growth |
25.42% |
15.72% |
1. Should I Invest In ELSS Funds?
Over other traditional tax-saving tools like FDs, NPS, etc., ELSS offers several advantages. In comparison to other tax-saving plans, it has the shortest lock-in time and offers larger returns.
2. Is There Any Lock-In Period In ELSS Funds?
ELSS Mutual Funds come with a lock-in period of 3 years.
3. How Can I Invest In ELSS Funds?
You can invest in ELSS funds just like you invest in other types of mutual funds. Most service providers enable online investment mutual funds.
If you are looking to invest in an ELSS fund in Delhi, the above-given information would help you a lot in understanding their basics. Whether you have been looking for long-term wealth creation, tax savings, stable returns, and others, ELSS funds are one of the best investment channels available today.
Taxation Regulations for Mutual Funds for NRIs in India, In recent times, mutual funds have eme...
Read more...Difference Between SIP and Mutual Fund, Though terms like SIP and mutual funds correlate, there migh...
Read more...How Do You Withdraw Money from Mutual Funds? In recent times, the popularity of mutual funds as an i...
Read more...A market-linked return and tax deduction under Section 80C of the Income Tax Act, 1961 are two advan...
Read more...How Long Should We Invest In Index Funds? Given that more investors are expressing interest in passi...
Read more...How to Choose The Best Mutual Funds in India? Investing is a skill that is unique to each perso...
Read more...Best mutual funds to invest in 2023, When an asset management firm (AMC) combines the capital o...
Read more...How Mutual Funds Are Better Investment Options? Purchasing individual stocks is one approach to atte...
Read more...Benefits of Investing in Mutual Funds, A mutual fund is a type of financial vehicle that invests the...
Read more...How Can I Withdraw SIP Amount Online, In recent times, mutual fund investment, especially throu...
Read more...Drop a Mail or give us a Missed Call & Begin your Investment Journey here