Are you interested in saving through investing? Then, here is the perfect scheme suiting to your needs. ELSS (Equity Linked Saving Scheme) facilitates to save your taxes via investment. ELSS is a scheme which provides tax-rebate up to INR 1,50,000. The scheme falls under the Section 80C of the Income Tax Act. According to the budget declared for FY 2016-17, Mr. Arun Jaitley, the Finance Minister has not altered the income tax slab, which means that the individuals having an income above INR 2,50,000 are the ones who can opt for ELSS.
The income tax saving is a crucial part of the revenue-expenditure cycle. When you invest your revenue in addition to becoming eligible for a tax rebate, you will get growth of your money also. There is capital appreciation in ELSS fund because it is a type of diversified equity. Another factor that shows a green signal to ELSS scheme is the non-taxation policy on the long-term gains from the plan. Owing to its short lock-in period, ELSS mutual fund has gained popularity like no other tax-saving scheme.
There are many restrictions on the lock-in period as well as the maximum investment limit annually in other tax-free schemes. But, in ELSS scheme, there is restriction only in the lock-in period and that too for a short period. The targeted beneficiaries of the scheme are the investors with towering income. The investors having income above INR 2,50,000 are always on a quest for the schemes which can perform extraordinarily. The search for the investors will now end on one single name ELSS mutual fund.
Options under ELSS Scheme
ELSS scheme invests around 65% of the total fund in the equity instruments which are tax-free. Hence, there is a little risk factor involved in it. But, the capital gains are tax-free under the scheme which is the highlighting feature of the plan. The client has the twin option of growth and dividend. Under the growth function, the client will receive a lump sum amount after the lock-in period of three years. On the contrary to it, the dividend option allows the investor to enjoy a payback during three years whenever the dividend is declared.
Why ELSS?
ELSS fund wins over the other tax saving instruments because of the following reason:
ELSS is not a good choice for the risk averse investors. The investors who want to go in for capital appreciation, as well as tax saving, should go in for ELSS scheme. The dividend and growth options serve the basis for selection. The investors who can not afford to invest their money in the long-term schemes can choose ELSS fund. All in all ELSS mutual fund is the right choice for the investors who want tax-benefit with capital appreciation and have a short-term perspective.
ELSS mutual fund is a beneficial scheme providing a growth rate of 12-15%. The fund offers to invest in diversified equity. This will serve the benefit of growth as well as tax-saving in one go. Therefore, reducing the tautness of investing in two different schemes viz, one for capital gains and other for tax-saving. These all benefits can not be seen in any other tax saving scheme.
The income tax saving is a crucial part of the revenue-expenditure cycle. When you invest your revenue in addition to becoming eligible for a tax rebate, you will get growth of your money also. There is capital appreciation in ELSS fund because it is a type of diversified equity. Another factor that shows a green signal to ELSS scheme is the non-taxation policy on the long-term gains from the plan. Owing to its short lock-in period, ELSS mutual fund has gained popularity like no other tax-saving scheme.
There are many restrictions on the lock-in period as well as the maximum investment limit annually in other tax-free schemes. But, in ELSS scheme, there is restriction only in the lock-in period and that too for a short period. The targeted beneficiaries of the scheme are the investors with towering income. The investors having income above INR 2,50,000 are always on a quest for the schemes which can perform extraordinarily. The search for the investors will now end on one single name ELSS mutual fund.
Options under ELSS Scheme
ELSS scheme invests around 65% of the total fund in the equity instruments which are tax-free. Hence, there is a little risk factor involved in it. But, the capital gains are tax-free under the scheme which is the highlighting feature of the plan. The client has the twin option of growth and dividend. Under the growth function, the client will receive a lump sum amount after the lock-in period of three years. On the contrary to it, the dividend option allows the investor to enjoy a payback during three years whenever the dividend is declared.
Why ELSS?
ELSS fund wins over the other tax saving instruments because of the following reason:
- The lock-in period for the close competitor of ELSS, i.e., PPF (Private Provident Fund) is 15 years. Though the partial withdrawal can be made after 6 years, the full amount can be withdrawn after 3 years in ELSS.
- Where the maximum investment in PPF is INR 10,00,000, there is no limit on the maximum investment under ELSS mutual fund.
- The returns are in the form of rate of interest in PPF, which fluctuates around 8.5%. In contrast, to this, the returns from ELSS termed as equity gains or dividends hovers around 12-15%.
- In addition, to the lump sum withdrawal ELSS mutual fund provides the option of dividend earnings which are absent in PPF.
- As an equity-linked scheme, it provides an edge of capital gain to the investment which marks a prolific growth in the money.
ELSS is not a good choice for the risk averse investors. The investors who want to go in for capital appreciation, as well as tax saving, should go in for ELSS scheme. The dividend and growth options serve the basis for selection. The investors who can not afford to invest their money in the long-term schemes can choose ELSS fund. All in all ELSS mutual fund is the right choice for the investors who want tax-benefit with capital appreciation and have a short-term perspective.
ELSS mutual fund is a beneficial scheme providing a growth rate of 12-15%. The fund offers to invest in diversified equity. This will serve the benefit of growth as well as tax-saving in one go. Therefore, reducing the tautness of investing in two different schemes viz, one for capital gains and other for tax-saving. These all benefits can not be seen in any other tax saving scheme.
Good Post Keep it up thanks for sharing the information.
ReplyDeleteHow long do you plan to invest? How much do you expect to earn on this investment?
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