Invest in ELSS – The Tax Saving Mutual Funds
⇒ Save up to Rs. 46,800 in taxes
⇒ Highest Returns among other 80C exemptions
⇒ The Lowest Lock-in period of 3-years
Why ELSS is the Best Tax Saving Option
Under Section 80C of the Income Tax Act, you can save almost Rs. 47,000 by investing in Equity Linked Saving Scheme or ELSS.
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PS: The Returns are as on March 29, 2019. These are subject to changes according to the market conditions. Do check the latest status by clicking on the corresponding link.
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Benefits of ELSS
- Start investing. Even with a Lower Income.
- Invest in the Top Performers. Customized to meet your financial objectives.
- Funds selected based on their Perpetual Performance Record.
ELSS Vs. Other Tax-Saving Investments
A lot many ELSS investments get returns at the rate of 25 to 30%, which is quite attractive as compared to the 8.8% returns of NSCs.
In addition to that, ELSS has a lock-in period of 3-years as compared to 6-years for NSCs.
Similarly, due to SIP Investment (Systematic Investment Plans), you have the flexible option to invest amounts as per your current financial situation.
|Investment||Lock-In Period||Returns||Tax on Return|
|5-Year Bank Fixed Deposit||5-years||6-7%||Yes|
|Public Provident Fund (PPF)||15-years||7-8%||No|
|National Savings Certificate||5-years||7-8%||Yes|
|National Pension System (NPS)||Till Retirement||8-10%||Partially Taxable|
|ELSS Funds||3-years||15-18%||Partially Taxable|
ELSS: double your money in 5-years: WealthBucket
ELSS: Lowest Lock-in Period: WealthBucket
Best to Invest in ELSS with WealthBucket
You get the advantage of receiving much Higher Returns on Investment along with significant Tax Benefits when you invest in ELSS Mutual Funds than bank FD, PF, NSC, or any other Tax Saving investment options.
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FAQs about ELSS
As a tax-paying citizen, the Section-80C of the Indian Tax Act allows you some breather – a deduction of up to 150,000 from your total annual income.
Q. What is ELSS?
Ans. ELSS or Equity Linked Saving Scheme is an open-ended equity mutual fund that offers the dual benefits of wealth creation and tax saving. They invest the corpus in equity and equity-related products.
Investment in ELSS qualifies for a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, in the year of investment.
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Q. What is the lock-in period?
Ans. ELSS Funds come with a minimum lock-in period of 3-years.
Q. Why ELSS?
Ans. ELSS scores majorly over other conventional tax saving instruments like FDs, NPS, etc. Considering that you receive the highest returns with the lowest lock-in period.
Q. How much tax can be saved with ELSS?
Ans. You can save up to Rs. 46,800, in the highest tax bracket of 30%, under Section 80C of the Income Tax Act. The maximum amount of various tax-saving investments is Rs. 1.5 lakh, in the year of investment, as per this section.
Q. Who can invest in ELSS?
Ans. If you are trying to reduce income tax by investing in 80C tax-saving schemes, and are ready to take the risks associated with investing in equity. That is what makes it suitable for people who can stay invested for a long time.
Q. Any other benefits of investing in ELSS?
Ans. ELSS funds also offer you the following benefits, other than Tax-Saving:
- It is an opportunity to compound your money by investing in the equity market.
- The returns are Long-term Capital Gains and, therefore, tax-free.
- The duration of the lock-in period is only 3 years.
- Investing in ELSS funds via SIP helps in:
• Rupee Cost Averaging.
• Benefits of the Power of Compounding in the long run.
• Efficient Tax Planning.
• No headache of coming up with a corpus, at the end of the financial year.
Q. What other taxes with ELSS?
Ans. All Returns from ELSS are treated as long-term gains, for they have a lock-in duration of 3-years. Further, the gains are taxed at 10% if above Rs. 1 lakhs.
Q. Should I make Lump Sum Investment or SIP?
With SIP, you get the benefit of Rupee Cost Averaging while reducing fluctuations over the long term. You avoid the stress of arranging a large amount to save tax, at the end of the financial year. Instead, you just need to put aside a small amount every month, with SIP. This inculcates the habit of saving.
Q. Should my first mutual fund investment be in ELSS?
Since you are just starting, you have better chances of keeping the investment for a longer duration, and receive the highest returns.
Q. What are equity funds?
Ans. Equity funds are the Tax Saving Mutual Funds that invest a significant part of the corpus in shares of companies of different market capitalization.
Q. Is there an Exit Load?
Ans. Once the lock-in period is over, there is no exit load on your withdrawal.
Q. Is KYC necessary?
Q. Why invest through WealthBucket?
Ans. WealthBucket has made the process of investing quite easy. The portal is simple to use. We take the headache away from doing the homework. Our experts, with their vast knowledge, can offer the Top-Performers, best suited for your needs. And the process is super quick.
Q. How to Invest in Mutual Funds through WealthBucket?
Ans. The process of investing, when you have already selected the fund, is extremely easy.
- Select the fund and the amount you want to invest, whether Lump Sum or SIP,
- Provide your details
- Make the payment. If choosing a SIP, you need to activate payments for the rest of the months.
- And you are done.
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