What Is ELSS And How Does it Work?
Introduction
ELSS is a type of tax saving mutual fund scheme that allows you to invest in equities and equity related securities with a lock-in period of 3 years. There are several advantages of ELSS funds over other tax saving options under section 80C.
ELSS is a type of tax saving mutual fund scheme.
If you are looking for a way to save on your taxes and build wealth, then ELSS funds are a smart way of saving. The ELSS funds are designed to avoid taxes on capital gains by investing in profitable equity shares. However, not all ELSS funds will help you avoid paying tax on dividends received from the underlying securities held by the fund.
ELSS Funds invest in equity and equity related securities with a lock-in period of 3 years.
ELSS Funds invest in equity and equity related securities with a lock-in period of 3 years. The funds can be redeemed at any time during the lock-in period, however, there is no guarantee of redemption in the event of an early exit from a fund. ELSS funds offer higher returns as compared to other tax saving options because they invest directly into stocks and bonds or use derivatives such as futures contracts to gain exposure to stock market movements.
ELSS funds have the lowest lock-in period among all tax saving investment options under section 80C.
ELSS funds have the lowest lock-in period among all tax saving investment options under section 80C. The lock-in period for ELSS funds is three years and these investments can be made in the range of Rs 500 to Rs 1,500 per month.
Being equity linked, these funds offer higher returns as compared to other tax saving options u/s 80C over longer tenures.
Being equity linked, these funds offer higher returns as compared to other tax saving options u/s 80C over longer tenures.
ELSS funds are equity-linked savings schemes and offer investors greater benefits than fixed deposits or bank FDs. ELSS has been introduced by the government in order to provide more avenues for investments under Section 80CCD(1)(a) of the Income Tax Act 1961 (“the Act”). This section allows an investor who invests in an eligible durational scheme through an entity registered as a Mutual Fund (MF) or Unit Trust of India (UTI), which is also called an ‘Investment Manager’ and holds shares of a listed company listed on any recognized stock exchange with market capitalization above Rs 50 crore at any point during the year 2006-07 onwards.
ELSS funds also enjoy Equity Linked Savings Scheme tax benefits u/s 80C up to Rs 1,50,000/- on investment.
ELSS funds also enjoy Equity Linked Savings Scheme tax benefits u/s 80C up to Rs 1,50,000/- on investment.
ELSS is a type of mutual fund scheme where the investments are made in equity and equity related securities with a lock-in period of 3 years or more.
In this article we will explain how ELSS works and how it can help you save more money by investing your savings in these schemes which provide an excellent return on investment (ROI).
You can choose to invest in ELSS through SIP or lump sum investments or even a combination of both.
- You can choose to invest in ELSS through SIP or lump sum investments or even a combination of both.
- SIP is a low cost, convenient way to invest in ELSS.
- Lump sum investments are good for those who want to invest a large amount at one time.
- Combination of both is a good option for people who want to invest a small amount at regular intervals
ELSS Funds are a smart way of saving on your taxes while building wealth for your future
ELSS funds are a type of tax saving mutual fund scheme. They invest in equity and equity related securities with a lock-in period of 3 years. The lowest lock-in period among all tax saving investment options under section 80C is offered by ELSS funds (1 year).
ELSS Funds have no minimum subscription requirement, annual charges or withdrawal penalties. However, there are some restrictions on investments such as not being able to invest in debt instruments or government securities including residential housing finance companies etc., as well as not being able to hold more than one unit per fund per investor within the same financial year.
Conclusion
ELSS Funds offer both tax benefits as well as the ability to earn high returns over their long tenure. These funds are also a great way to save on your taxes, which is a significant benefit for those who are looking forward to saving on future tax liabilities. The fund management companies involved in ELSS schemes offer very good returns and hence make it an attractive option for investors.
