Invest in ELSS scheme if you want a good return with tax savings, it has returned up to 102% in last 1 year
These days if you are planning to make a tax saving investment, you can invest in an equity linked savings scheme i.e. ELSS. It would be beneficial to invest in a tax saving mutual fund to save tax and get a good return. This category has returned up to 102% in the last 1 year. We are telling you about ELSS.
Tax exemption under section 80C
You can avail tax exemption under Section 80C of the Income Tax Act on investments up to Rs 1.5 lakh in a financial year. That means you can get tax exemption on investments up to Rs 1.5 lakh in 1 financial year. In addition, the benefits of investing in ELSS and the proceeds from redemption (selling the investment unit) are completely tax free.
Investment can be started from Rs.500
Investment in ELSS can be started from Rs.500 through Systematic Investment Plan (SIP). As well as no maximum investment limit. Investors get two types of options in this fund. It comes with growth first and second dividend pay out. The money in the growth option is constantly in the scheme.
The lockin period lasts for 3 years
ELSS has a lock-in period of 3 years which means you will be able to withdraw the money you have invested in it after 3 years. This is a good feature of the scheme. Its lockin period is much shorter than other schemes. However, investors can continue after this lockin period is over. Investing in ELSS for a longer period of time is considered to be more profitable.
No tax up to Rs 1 lakh
Long Term Capital Gains (LTCG) up to Rs 1 lakh received from a mutual fund in a year is exempt from income tax. That means you don't have to pay any tax up to Rs 1 lakh. Excess income from this limit is taxable at the rate of 10%.
ELSS is a good option to get a good return with tax savings
According to Pankaj Mathpal, a personal finance expert and founder and CEO of Optima Money Managers, many ELSS funds have returned more than 70% in the last one year. In addition, by investing in it, you can avail tax exemption under Section 80c of the Income Tax Act on investments up to Rs 1.5 lakh in a financial year. So it is a great option to get a good return and save tax.
These ELSS funds have given good returns over the last few years
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