ELSS scheme benefits: Equity Linked Savings Scheme is a great scheme to start investing. 80 percent of this scheme is invested in the stock market and 20 percent in the debt market. It is giving returns of 14-17 per cent on a yearly basis.
ELSS scheme benefits:: If you are doing financial planning then tax planning becomes very important. Financial experts recommend that everyone should start investing as soon as possible. Tax and financial expert Garima Bajpai said that your 20s is the right time to start investing. In the beginning, there is less responsibility on you, due to which maximum investment is possible for the future. You are new to the investment world, so choosing the right scheme is also important.
Tax benefits are also available on investment in ELSS
Chartered Accountant Garima said that ELSS ie Equity Linked Saving Schemes are a great option in terms of tax and investment. One should start investing with such schemes. Apart from tax benefits, there is also the benefit of growth in this. Let us know in detail about 5 special features of this scheme.
Lock-in period of 3 years
1>> ELSS is equity based mutual fund in which 80 percent is invested in stock market and 20 percent in debt. There is no maximum investment limit in this, but the minimum investment should be Rs 500. The lock-in period for this is at least 3 years. On investing in it, one gets the benefit of tax deduction under section 80C, which is limited to Rs 1.5 lakh.
Annual return of 14-17 per cent
2>> This scheme is capable of creating wealth in the long term. Looking at its performance, it has given an annual return of 14-17 per cent. Such great returns along with tax benefits are great for investors. If an individual falls in the 30 percent tax bracket, then by investing in it, he can save tax up to Rs 46800 on an annual basis. Talking about the tax on returns, then long term capital gains tax is levied on it. Capital gains up to 1 lakh are tax free. Thereafter, capital gains are taxed at the rate of 10 per cent.
SIP and lump sum investment option
3>> Investors have the option to do SIP in ELSS scheme or the facility of lump sum investment is also available. The SIP can be as low as Rs 500. There is no upper limit for lump sum investment.
Dividend option also available
4>>If an investor opts for dividend option then he will get the benefit of dividend on yearly basis even during the lock-in period of 3 years.
Compete with other schemes
5>> The expert said that the investment options under section 80C also include Public Provident Fund and Fixed Deposit. However, the returns on these schemes are fixed. The return on ELSS depends on the performance of the market. This is the reason why this scheme is more effective in creating wealth from medium and long term point of view. In the last five years, it has given excellent returns of 14-17 per cent on a yearly basis. Since this investment option is directly related to the market. In such a situation, the volatility of the market has a direct effect on your investment. To avoid this, investors are advised to invest for a long period.
