ELSS Mutual Fund: Equity Linked Savings Schemes are tax saving mutual funds, which help the investor to beat inflationary growth over a long period of time. This tax saving scheme is an equity mutual fund with a lock-in of three years with income tax benefits under section 80C of the Income Tax Act. Like any other equity mutual fund, an investor can invest in ELSS Mutual Fund in SIP mode with minimum monthly SIP. 500.
Sujit Bangar, Founder, TaxBuddy.com, while talking on ELSS Mutual Fund said, “ELSS Mutual Fund is a good instrument option for equity investors who want to save tax and grow wealth at the same time. Tax Saving Mutual Fund Investment instrument can claim tax exemption under section 80C as an investor: 1.5 lakh investment in a single financial year.”
Sujit Bangar of Taxbuddy.com has listed the following 5 reasons that make this tax saving mutual fund a good investment option for an earner:
1]Lock-in of three years: It comes with a lock in of three years. So automatically you stay invested for a long period to get good returns.
2]Direct Fund Option: Like any equity mutual fund, ELSS mutual funds also provide direct fund options to an investor. With a low cost ration, these mutual funds allow maximum investment as the expenses in such mutual funds are very less.
3]Exposure to Equity Investment: Sujit Bangar said, “ELSS is a good way to get exposure in the equity market. I think it is the first step towards building equities as an asset class in your portfolio.”
4]Provision of Tax Free Income: The profit you earn on ELSS is tax free to the extent of Rs. 1 lakh in a year. If the profit is more than one year, the profit will be taxed at 10 percent.
5]SIP Option: ELSS can be started with low monthly SIP: 500. So that makes it easy to start the habit of saving.