Equity Linked Savings Scheme (ELSS)

Sponsored Links:

ELSS is type of Mutual fund. But ELSS stands for Equity Linked Savings Scheme. And these are tax saving mutual funds. You can use to save income tax up to Rs 1.5 lakh under section 80C. Therefore ELSS funds have lock in period of 3 years. But their portfolio major invests in stock market. See best ELSS SIP mutual funds. Hence, check ELSS investment calculator.

What is Equity linked Saving Schemes (ELSS)

Mutual funds offer you simple way to get tax benefits. Therefore Equity Linked Savings Scheme is an open ended Equity Mutual Fund. But also gives you an option to grow your money. Moreover, it qualifies for tax exemptions under sector 80C of Indian Income Tax Act. Hence, to know more details see top 10 ELSS funds.

Along with tax deductions, an ELSS offers you option. To grow your money by invest in equity market. In addition, Long-term capital gains from these funds are tax free in your hands. And lock-in period is only 3 years. See ELSS investment procedure. Hence, check best ULIP plans in India.

Furthermore, you can also opt for Dividend Payout option. By understand some potential gain during lock-in period. And also choose to invest through a Systematic Investment Plan .To control your tax planning funds. View how to invest in ELSS online. Hence, you can refer Best Post Office Small Saving Schemes to invest.

Investment in ELSS mutual funds

ELSS funds are best to save tax under Section 80C. But along with tax deduction you also get option to invest in equity markets. Also no tax is put on long term capital gains from these funds. Moreover, compare to other tax saving options ELSS has shortest lock in period of three years. Hence, difference between large cap and mid cap. See top 5 large cap mutual funds.

Basically tax saving mutual fund helps you to avail tax deductions are known as ELSS. These are saving option under section 80C. Also, spread your investments between ELSS plans of different fund houses. Hence, see top ELSS sip. And also check best large cap mutual funds.

Features of Equity linked Saving Schemes

ELSS is diversified equity mutual fund. And it has major corpus invested in equities. Since it is an equity fund returns from an ELSS fund reflect return from equity market. Therefore this type of mutual fund has lock in period of 3 years from date of investment. This means if you start Systematic Investment Plan  in an ELSS.

One of most popular Sec 80C investments is in tax saving mutual funds or Equity Linked Savings Scheme (ELSS). Furthermore, this is an equity diversified fund. And you can enjoy both benefits of capital appreciation as well as tax benefits. Hence, you can also use calculator to know return on any investment.

ELSS funds have both growth and dividend options

Similar, ELSS funds have two plan options. Like dividend and growth options. But in growth schemes you will get lump sum on expiry of 3 years. On other hand, in dividend scheme you will get regular dividend income. Whenever dividend is declare by fund even during lock-in period.

For tax purposed, returns from an ELSS scheme are tax free. However, you can claim up to Rs. 1 lakh of your ELSS investment. It deduct from your gross total income in financial year under Sec 80 C of Income Tax Act. Check Systematic Investment Plan calculator

However, growth option is advice for long term wealth creation. Under dividend option, you can select dividend payout or dividend reinvestment. So dividend received will not be taxable. And if you choose dividend reinvestment it will be treated as fresh investment.  You can claim tax benefit on it as well.

Difference between ELSS and ULIPs

Unit Linked Insurance Product (ULIP) and Equity Linked Saving Scheme are not same. And there are entirely different with different benefits. But one common benefit is that they both offer tax benefit under Sec 80C of Income Tax Act. Therefore income earned from both products is tax free. And read more on all charges of ULIPs

However, ULIPs basically work like mutual fund with life cover thrown in. And they invest premium in market linked instrument like stock. In addition, like corporate bonds and government securities. But Ulip is insurance cum investment product sold by insurance companies. Moreover, Ulip investors have option to invest in equity, debt, hybrid and money market funds.

But, they have differences in many aspects. Moreover, ULIP gives you maximum tax saving. Further, at time of maturity you need not pay any tax on original amount. Since ULIP gives tax benefit. You can’t get your money back till 5 years from policy start. You can see Calculate ELSS Return of Selected Duration

Therefore ULIPs mix with insurance and investment. And ULIP and ELSS are not similar products. ULIP gives you insurance cover but ELSS does not. You can switch ULIP funds to avoid certain downfall of share market. However, you can’t avoid market downfall during 3 year lock-in period in ELSS. Hence, ELSS has 3 years lock in period and ULIPs has 5 years lock in period. See benefits of ELSS.

Finally, to check volatility of ELSS you can use ELSS calculator. Probably, you must check performance of ELSS during market downfall. Particularly, you must check return during market downturn. You can also check performance of your tax saving mutual fund against BSE 200.

Sponsored Links:

Leave a Reply

Your email address will not be published. Required fields are marked *