How much tax does ELSS save?

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How much tax does ELSS save?

ELSS mutual funds are the only class of mutual funds eligible for tax deductions. You can save up to Rs 46,800 (tax deductions of up to Rs 1,50,000) a year in taxes by investing in ELSS, which is covered under Section 80C of the Income Tax Act, 1961.

How do you calculate tax on ELSS?

So this investor investing an amount of Rs 1.5 lakhs in ELSS will now have to pay a tax on the gains above Rs 1 lakh. His total gain is Rs 1.5 lakhs, out of which, after removing Rs 1 lakh, we are left with Rs 50,000. 10\% tax of this is to be calculated. 10\% of Rs 50,000 is Rs 5000.

Can I save tax more than 1.5 lakh?

The most popular tax-saving options available to individuals and HUFs in India are under Section 80C of the Income Tax Act, Section 80C includes various investments and expenses you can claim deductions on – up to the limit of Rs. 1.5 lakh in a financial year.

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How can I save tax over 150000?

Taxpayers can save additional tax by investing up to ₹ 50,000 in NPS. This is over and above the benefit, they can claim on contributions under Section 80c. They also have the option of utilizing NPS for the ₹ 1.5 lakh limit of Section 80c. This combination will take total deduction one can claim with NPS to ₹ 2 lakh.

How do rich save taxes in India?

Here’s a list of popular investment options to save tax under section 80C.

  1. Public Provident Fund.
  2. National Pension Scheme.
  3. Premium Paid for Life Insurance policy.
  4. National Savings Certificate.
  5. Equity Linked Savings Scheme.
  6. Home loan’s principal amount.
  7. Fixed deposit for a duration of five years.
  8. Sukanya Samariddhi account.

What income is tax free?

Individuals with Net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A i.e tax liability will be nil of such individual in both – New and old/existing tax regimes. Basic exemption limit for NRIs is of Rs 2.5 Lakh irrespective of age.

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Can I save tax by investing in mutual funds?

Mutual funds, also known as Equity Linked Savings Scheme (ELSS), are great tax-saving instruments under Section 80C of the Income Tax Act, 1961. This section allows you to claim benefits from your taxable income if you put your money into certain investments.

How much tax can I save by investing in ELSS funds?

How much Tax can I save by investing in ELSS funds? You can save tax upto Rs. 46,800 per year by investing in ELSS funds if you invest Rs 1,50,000 and you fall in the highest tax bracket of 30\%. Tax saving will be proportionately reduced subject to the taxable income and investments.

What is ELSS (an equity linked savings scheme)?

An Equity Linked Savings Scheme (ELSS), popularly known as a tax-saving mutual fund, is the only mutual fund which qualifies for a tax deduction of up to Rs. 1.5 lakh annually under Section 80C of the Income Tax Act. As the name suggests, it is a type of open-ended equity fund.

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What is the minimum amount required to start an ELSS?

One can start with a minimum amount of Rs. 500 in a SIP and there is no upper limit. However, the tax exempted amount is only Rs. 1.5 lakh in the financial year. One can also start with lump sum investment in ELSS.

What is ELSs and how does it work?

What is ELSS? An Equity Linked Savings Scheme (ELSS), popularly known as a tax-saving mutual fund, is the only mutual fund which qualifies for a tax deduction of up to Rs. 1.5 lakh annually under Section 80C of the Income Tax Act. As the name suggests, it is a type of open-ended equity fund.

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