Table of Contents
What is the benefit of investing in ELSS?
Tax Benefit One of the primary reasons to invest in ELSS is to save tax. Investments in ELSS qualify for tax deduction under section 80C of the income tax act of 1961. But any dividend or long term capital gain earned by the investor is exempted from income tax. Simply, your returns from ELSS become tax free.
What are the benefits of investing in equity funds?
Benefits Of Investing In Equity Mutual Funds
- Professional Fund Management. An Asset Management Company (AMC) works in a professional set-up with individual functions of research, analysis and trading being carried out by experts.
- Risk Mitigation.
- Diversification.
- Small Ticket Size.
- Convenience.
- Tax Efficiency.
- Well Regulated.
Is ELSS safe investment?
ELSS is the only kind of mutual funds covered under Section 80C of the Income Tax Act, 1961. ELSS funds have the shortest lock-in period among all Section 80C options. Nevertheless, it offers better scope for long-term wealth creation, people with more risk tolerance favour it.
How does ELSS scheme work?
Every ELSS fund invests at least 80\% of its portfolio in a diversified mix of equity and equity-related instruments. Funds are tailored to specific investment objectives and levels of risk. You must keep your money invested in an ELSS fund for at least three years. This period serves as the lock-in period.
Is ELSS better than NPS?
Even though NPS offers tax benefits of up to Rs 2 lakh a year, as opposed to the ELSS tax benefits of up to Rs 1.5 lakh, ELSS is still the better investment option. The latter provides flexibility and the opportunity to earn higher returns with a lock-in period of only three years.
Are ELSS funds good?
You can have good returns, but there are also chances of an investor making low to negative returns hence don’t invest in an ELSS if your time horizon is 3 years. Invest for the Long term….
| NIFTY 500 Index: 3-Year Rolling Return Range | |
|---|---|
| Minimum return | -21.7\% |
| Maximum return | +68.6\% |
| Median return | +12.5\% |
What are the benefits of investing in equity funds and what are the risks?
The advantages of investing include professional management, low risk, diversification, liquidity, economies of scale. The disadvantages of investing include the high fee, poor trade execution, tax inefficiency., etc.
Can I claim ELSS every year?
By investing in ELSS, you can claim a tax rebate of up to Rs 1,50,000 a year and save up to Rs 46,800 a year in taxes. An ELSS is the only kind of mutual fund eligible for tax benefits under Section 80C.
What makes ELSS different from other equity mutual fund schemes?
What makes ELSS different from other equity mutual fund schemes is that investment upto ₹1.5 lakh in ELSS is eligible for deduction from taxable income in a financial year. The scheme comes with a statutory lock-in period of 3 years for each SIP. It is the only mutual fund scheme that qualifies for tax deduction under Section 80 (C) of the IT Act.
What are the tax benefits of ELSS schemes?
ELSS allows you to save taxes, as investment upto ₹1.5 lakh in these schemes is eligible for tax exemption. Investment portfolio of ELSS consists of balanced allocation to different asset classes such as equity and debt securities.
What is the best ELSS fund to invest?
4. Top Performing ELSS Funds Fund Name 3-year Return (\%)* 5-year Return (\%)* Quant Tax Plan Direct-Growth 28.80\% 22.29\% Mirae Asset Tax Saver Fund Direct-Growth 20.52\% 21.94\% Canara Robeco Equity Tax Saver Direct- G 19.16\% 18.97\% IDFC Tax Advantage (ELSS) Direct Plan-Gr 15.94\% 17.60\%
What is equequity linked savings scheme?
Equity Linked Savings Scheme is an open ended mutual fund scheme with a statutory lock in of 3 years and which invests a minimum of 80\% of its assets in equities. It is the only mutual fund scheme in India which qualifies for tax deduction under Section 80(C) of the Income Tax Act.