What are the benefits of ELSS?
One of the primary reasons to invest in ELSS is to save tax. Investments in ELSS qualify for tax deduction under section 80C of the income tax act of 1961. But any dividend or long term capital gain earned by the investor is exempted from income tax. Simply, your returns from ELSS become tax free.
What are the key features of mutual funds?
Features of Mutual Funds
- Managed by a qualified expert.
- Open-ended and close-ended funds.
- Lump Sum and SIP Investment.
- No fixed returns.
- Equities can make losses.
- Debt funds are relatively safer.
- Different ways of investing.
- Charges of mutual funds.
What is ELSS explain in details?
An Equity Linked Saving Scheme (ELSS) is an open-ended equity mutual fund that invests primarily in equities and equity-related products. They are a special category among mutual funds that qualify for tax deductions under Section 80C of the Income Tax Act, 1961.
How does ELSS scheme work?
Equity Linked Savings Scheme or ELSS Funds are open-ended Equity Mutual Funds that help you save and provide an opportunity to grow money. When almost all equity funds restrain you from paying long-term capital gains tax of 10.4\% up to an amount of Rs. 1 lakh, ELSS mutual funds offer tax benefits.
What is the difference between ELSS and SIP?
ELSS is an investment vehicle in itself while SIP is not, it is instead a way of investing not only in ELSS but also in any other mutual fund. Therefore, ELSS cannot be compared with SIP as it’s not an apple to apple comparison.
How do you identify ELSS funds?
An ELSS is a mutual fund class that offers tax deductions under Section 80C of the Income Tax Act, 1961. To check if a fund is an ELSS or not, you need to check for its details on the fund house’s website. If you are investing via a third party, the same information will also be available on their website.
What is small cap fund?
Small cap mutual funds are invested in companies that below top 250 stocks in the exchange as per their market capitalisation. Small cap mutual funds have turned out to be a popular investment option due to their high returns.
What is basic deduction 80C?
Income tax department allows reducing of the taxable income of the taxpayer in case the taxpayer makes certain investments or eligible expenditures allowed under Chapter VI A. 80C allows deduction for investment made in PPF , EPF, LIC premium , Equity linked saving scheme, principal amount payment towards home loan.
What is NAV in mutual fund?
Net asset value (NAV) represents a fund’s per share market value. NAV is calculated by dividing the total value of all the cash and securities in a fund’s portfolio, minus any liabilities, by the number of outstanding shares. The NAV calculation is important because it tells us how much one share of the fund is worth.
How do you identify ELSS?
What is the meaning of the name ELSS?
Meaning of ELSS is Equity Linked Savings Scheme; it’s a category of mutual fund which helps in saving taxes. ELSS offers you dual advantage of capital appreciation as well as tax saving under section 80© of Income Tax Act.
What is ELSS mutual fund?
Short for Equity Linked Savings Scheme, ELSS is the only type of mutual fund investment scheme that offers investment and tax-saving features. ELLS funds mainly invest in equity and equity-linked securities such as listed shares. It is the only mutual fund that is eligible for a tax rebate.
Is ELSS a good investment for conservative investors?
ELSS is equity linked investment; there is no way one can avoid exposure towards equity in so it’s not suitable for conservative investors. The money which you received after 3 years of lock in period will be taxable as per Long term capital gain tax. The returns are not guaranteed, any investment in mutual fund doesn’t guarantee returns.
What is the maximum limit for investment in ELSS?
There is no maximum limit for investment in ELSS even once you tax limit is exhausted , one can still invest in ELSS only thing is taxes can be saved up to Rs. 46,800*/-. ELSS is equity linked investment; there is no way one can avoid exposure towards equity in so it’s not suitable for conservative investors.