What happens if you redeem ELSS before 3 years?

What happens if you redeem ELSS before 3 years?

Equity-linked savings schemes, or ELSS funds are great option for tax saving investment plans, however, they come with a lock-in period of three years. The lock-in period are important as it helps investors secure their savings. The investors can not withdraw money before the end of lock-in period of three years.

What happens if I discontinue SIP?

Existing investment will continue to earn returns Investments done so far via SIP in the mutual fund scheme, will continue to remain invested even after you request to stop your SIP. The existing investment in the scheme will continue to earn returns. Stopping an SIP does not mean withdrawal from the scheme.

Can I pay missed SIP?

Missing one or two SIP payments will not have any adverse reaction to your corpus. However, there are two things that you must keep in mind regarding your missing SIP payments. They are: If an investor missed their 3 consecutive SIP payments, their SIP investment is terminated by the mutual fund house.

Is ELSS taxable after maturity?

The Long-Term Capital Gains on ELSS are tax-exempt up to Rs 1 lakh, and dividend received is tax-free in the hands of investors. You can continue to invest in this scheme even after the completion of the lock-in period of three years.

Can ELSS be lump-sum?

ELSS Funds A three-year lock-in is required for ELSS or tax-saving funds. With a lump-sum payment, your investment is unlocked all at once three years after purchase. For example, if you deposit Rs. 1.5 lakh in an ELSS on March 31, 2019, your money will be invested until March 31, 2022.

Is maturity of ELSS taxable or not?

The redemption proceeds of ELSS are not entirely tax-free. The long-term capital gains of up to Rs 1,00,000 a year are tax-free, and any gains above this limit attract a long-term capital gains tax at the rate of 10\% plus applicable cess and surcharge.

How can I invest in ELSS to save tax?

You can invest in ELSS the same way that you invest in any Mutual Fund. The easiest way is through an Online Investment Services Account. You can invest either as a lump sum or via the SIP (systematic investment plan) route.

What is the penalty for cancelling an ELSS SIP?

The fund then follows this instruction in about one month. There is no penalty charge for cancelling or stopping an SIP. The SIP investment can also be paused for a specific period of time. ELSS funds have a lock in period of 3 years, which means that the units of mutual fund that one purchased will become available for withdrawal after 3 years.

What is the maximum amount I can invest in ELSS?

You can save up to ₹ 1.5 lakhs a year in taxes by investing in ELSS, which is covered under Section 80C of the Income Tax Act, 1961. However, you can choose to invest more than ₹ 1.5 lakhs, but the excess will not qualify you to avail the tax benefits as per the provisions of Section 80C.

What is ELSS or tax saving mutual fund?

ELSS or tax saving mutual fund schemes help investors ( Individuals / HUF) save tax under Section 80C of the Income Tax Act, 1961. Investments in ELSS are subject to a lock-in period of 3 years and qualify for a tax deduction of upto Rs 1.5 lakh.

How does the ELSS SIP calculator work?

The ELSS SIP Calculator would require details like the amount of the investment, the tenure of the SIP and the expected rate of returns. The calculator, based on these details, will be able to generate an estimated rate of return for your investment.