ELSS is a type of mutual fund that offers tax deduction up to Rs 1.5 lakh per year. They have the shortest lock-in period of three years among all investment options under section 80C of the Income Tax Act
Updated Feb 27, 2021 | 08:09 IST
Look at the portfolios of the ELSS schemes and ensure that the ones you have selected have varied allocation to different sectors and stocks Looking to invest in ELSS to save tax? Know things to keep in mind before choosing an ELSS
With the tax-saving season for this financial year coming to a close, several taxpayers zero-in on ELSSs due to its shorter lock-in and potential for high returns compared to most other tax savers which either have a longer tenure or are debt-oriented, and low returns over longer tenures.
Since ELSS is often the first equity fund category that young investors invest in, they should choose their fund carefully, so that their initial experience in equity investing is good and they get hooked to this asset class for the long term. ELSS is eligible for tax deduction under Section 80C up to Rs 1.5 lakh.
Updated Feb 12, 2021 | 08:50 IST
Keeping in view falling returns from fixed income products that also provide tax deduction under Section 80C, analysts say ELSS should be an integral part of one s retirement planning. Representational image
Key Highlights
ELSS funds primarily invest in equity products, in the long term these funds have the potential to generate superior returns.
Under section 80C of the Income Tax Act 1961, one can invest up to Rs 1.5 lakh every year in ELSS funds to get income tax deduction
Long term capital gains booked from ELSS above Rs 1 lakh per year is taxable at the rate of 10%
Read more about Looking for tax-saving options? Select ELSS with varied investment styles on Business Standard. This will ensure at least one of your funds performs in any market condition