Mutual funds are gaining popularity in the country as it has given good returns in the last few years. However, you have to pay income tax on the income from mutual funds. Except in one category of mutual funds, you do not get tax exemption on investing in them. That category is known as Equity Linked Savings Scheme i.e. ELSS.
ELSS is considered a better option among mutual fund schemes. ELSS investment amount is invested in the equity market. ELSS offers tax exemption up to Rs 1.50 lakh under Section 80C of the Income Tax Act. Many ELSS funds have also given impressive returns in the last 3 years. For this reason ELSS is also called tax saving mutual fund scheme. ELSS also offers you tax exemption on long-term capital gains up to Rs 1 lakh.
Lock-in period of only 3 years
You can deposit money in ELSS in lump sum and can also invest through SIP. The best thing about ELSS is that it has a lock-in period of 3 years, unlike the 5 years lock-in period in schemes like NSC and tax-saving FD. The investor can continue with the Equity Linked Savings Scheme after the lock-in period of 3 years is over.
ELSS: You can start investing even with Rs 500
In ELSS mutual fund, you get the option to choose the scheme as per your budget and convenience. You can start investing in it with just Rs 500. There is no limit on maximum investment. According to experts, long term investment in ELSS can give better returns.
Top-5 ELSS Mutual Funds (Returns in 3 Years)
Quant ELSS Tax Saver Fund- 32.35 percent
HDFC ELSS Tax Saver Fund- 25.02 percent
Bandhan ELSS Tax Saver Fund- 24.94 percent
SBI Long Term Equity Fund- 24.71 percent
Bank of India ELSS Tax Saver Fund- 23.88 percent
(Disclaimer: The information given here is based on the performance of the shares. Since investing in the stock market is subject to market risk, please consult a certified investment advisor before investing. RightsofEmployees responsible for any loss you incur Will not done)
