Over the period of time, the government is making more regulations on the taxpaying for the country’s development. However, this is making a little bit difficult for the taxpayers and they are looking for some better investment for tax saving. For this particular situation the, mutual fund saving came as the best answer for the investors for saving money on tax. The Equity linked savings scheme lets the employees in saving tax up to 1.5 lakh. With the help of the ELSS, the investors can escape the more tax paying and saves their money in the returning funds. This is the best option to date that helps the people in saving a large amount of money into the taxes.
What is ELSS and how much can I invest in it?
ELSS or Equity linked saving scheme is the investment scheme that helps the people in saving tax. This scheme invests the money in different equities and lets the investors possess either from dividend or growth for their fund. Firstly, investing through the direct mutual fund route can help you save significantly on the charges. Secondly, you can invest up to 1.5 lakh in this ELSS to save tax. Some of the schemes let the investors choose higher returns with fund over the long period of time. Under this scheme, the people are given a fair chance to save their tax and invest in the higher return fund as well. This is the golden opportunity for taxpayers up to 1.5 lakh.
How can I invest in the ELSS scheme?
In order to successfully invest in the ELSS, the investor needs to be KYC compliant and ones the KYC is done he or she is ready to go. Then, the relevant form of the mutual investor needs to be filled along with writing a check. Both the form and the check will be a needed to invest the amount in the ELSS. The investors can also invest in the ELSS online using the different mutual fund websites and their portal to easily make the investment.
Why is ELSS better than other tax saving scheme?
The most advantageous feature of the ELSS is the lock-in period time over all the other mutual fund schemes. The ELSS offers only 3-year lock-in period where the Public Provident Fund or PFF has the 15-year lock-period and allows only some conditional withdraws. In comparison to ELSS all the other tax saving schemes or funds offer more years of lock-in periods. The National Saving Certificate has the lock period of five years and more for the investors. The National Pension Scheme also have the lock-in period of 60 years allows only the conditional withdrawal.
What after the lock-in period of 3 years in ELSS?
Under ELSS scheme the investors have the option to hold their fund units or redeem them after the three years of the lock-in period. The financial experts advise the investors to hold their units in the ELSS funds ever after the lock-in period and look for the opportunities to make a better return. They should be considered ELSS as the part of the equity in order to make sure the higher return.
All these benefits and advantages make the ELSS most suitable choice for the investors to avoid tax and save their money using the mutual fund. The short period of lock-in period serves the most demanding requirement of the investors. Three year is a very short period in comparison to another mutual investment scheme. This helps the investors in saving a huge amount in a very short period of time.