How is tax calculated on ELSS mutual funds?

So this investor investing an amount of Rs 1.5 lakhs in ELSS will now have to pay a tax on the gains above Rs 1 lakh. His total gain is Rs 1.5 lakhs, out of which, after removing Rs 1 lakh, we are left with Rs 50,000. 10\% tax of this is to be calculated. 10\% of Rs 50,000 is Rs 5000.

How much tax can we save from mutual funds?

You are allowed to invest up to Rs 1.5 lakh in tax-saving funds. You will get a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. a. ELSS funds are the only tax-saving funds within the Rs 1.5 lakh limit which has the additional advantage of giving equity-linked returns.

Can I invest more than 150000 in ELSS?

As we are aware, there is no upper limit to your investment in the ELSS. Of course, your overall limit under Section 80C will be limited to just Rs. 150,000/- per annum. But you can invest any amount in ELSS schemes even after you have crossed the Section 80C limit.

Is investing in mutual funds tax free?

Long term capital gains upto Rs 1 Lakh is totally tax free. Mutual fund tax benefits under Section 80C – Investments in Equity Linked Savings Schemes or ELSS mutual funds qualify for deduction from your taxable income under Section 80C of the Income Tax Act 1961.

Is mutual fund under 80C?

How to declare mutual funds in 80c? 80C allows deduction for ELSS mutual funds only upto Rs 1.5 lakh. Hence any investment made in ELSS mutual funds can be claimed as deduction under 80C.

What is the tax benefit in investing in ELSS?

Benefits of Investing in ELSS. Since Equity Linked Savings Scheme is essentially an equity scheme,it has the potential to deliver exponential returns in the long run.

What is difference between ELSs and mutual funds?

Returns earned Every investor looks to invest in a scheme that offers them the best returns. Lock-in period ELSS funds have a lock-in period of three years. Tax implication As per the Section 80C, investors can avail tax-exemption up to limit of Rs. Risk factor Equity-linked investment schemes have a direct connection to the stock market.

Which is the best ELSS fund to invest?

Top 5 tax saving ELSS mutual funds to invest in 2021 Axis Long Term Equity Fund BOI AXA Tax Advantage Fund Canara Robeco Equity Tax Saver Fund DSP Tax Saver Fund Mirae Asset Tax Saver Fund. The actual selection of stocks within the industry also matters. In addition, diversification across large-mid-cap stocks also determines the returns in the long run.

Do ELSS funds give better returns than PPF?

So where PPF returns average around 8\%, tax saving ELSS mutual funds have the potential to deliver a much superior return – a 12\% to 15\% average returns is possible, but not guaranteed. And the top best ELSS funds have given much better returns than these average returns.