What is ELSS and how it works?
An equity-linked savings scheme or ELSS is a tax-saving investment under Section 80C of the Income Tax Act, 1961. By investing in ELSS, you can claim a tax rebate of up to Rs 1,50,000 a year and save up to Rs 46,800 a year in taxes. An ELSS is the only kind of mutual fund eligible for tax benefits under Section 80C.
Is ELSS better than FD?
ELSS funds offer great tax benefits, and unlike FDs, the dividend earned on the investment will not be subject to tax deduction. Let us take a look at some of the key features of ELSS funds: ELSS funds have a comparatively shorter lock in period of 3 years, while tax saver FDs come with a lock-in period of 5 years.
What is the difference between ELSS and mutual funds?
An equity-linked savings scheme (ELSS) is a tax saving mutual fund. It is a fund in which you can invest like in the case of any other mutual fund. The only difference is that these funds are subjected to a lock-in period of 3 years and offer tax exemption under Section 80C of the Income Tax Act.
How do I invest in ELSS?
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.
Is SIP better than FD?
The money is typically invested in an equity mutual fund scheme. If you are new to the world of mutual funds, an SIP is one of the best investment options for you….SIP vs FD.
| Parameters | Fixed Deposit | Systematic Investment Plan |
|---|---|---|
| Liquidity | High | Low/Medium |
| Risk factor | Low | High |
| Returns | Guaranteed | Can’t be guaranteed |
How do I withdraw my ELSS mutual fund?
If you have made your ELSS Mutual Fund investment via the lump sum route, i.e., at one go, all your units will be allotted on the same day. And therefore, once the 3 year lock-in period is over, you can redeem your entire ELSS investment in one go.
Which app is best for SIP?
Top 5 Apps To Invest in Mutual Funds in India
- Coin by Zerodha. Download App: Android | iOS.
- Groww. Download App: Android | iOS.
- PayTM Money Mutual Funds App. Download App: Android | iOS.
- Kuvera. Download App: Android | iOS.
- ETMONEY. Download App: Android | iOS.
Is ELSS and sip same?
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.
Is ELSS a mutual fund?
ELSS or Equity Linked Savings Schemes are Mutual fund investment schemes that help you save income tax. That’s why they are also known as tax-saving funds. The Income Tax Act, under section 80c, allows taxpayers to invest up to INR 1.5 lakh in specific securities and claim it as a deduction from their taxable income.
What are the advantages and disadvantages of ELSS?
ELSS have the shortest lock in period of 3 years among the tax saving investments. Return: A person can receive an average of 13-14\% annual return on ELSS. On the other hand, FD and PPF gives only 7\% of return on investment. Disadvantages off ELSS. Risk: ELSS carries moderate risk since it invests in equities. However, the risk is diversified.
What does ELSS stand for?
ELSS stands for Equity Linked Saving Scheme. It is a tax saving tool where you can get tax benefits under section 80C. The only difference between an ELSS and a diversified Equity scheme is that ELSS have a mandatory lock in period of three years.
What is difference between ELSs and mutual funds?
Returns earned Every investor looks to invest in a scheme that offers them the best returns. Lock-in period ELSS funds have a lock-in period of three years. Tax implication As per the Section 80C, investors can avail tax-exemption up to limit of Rs. Risk factor Equity-linked investment schemes have a direct connection to the stock market.
What is the difference between ELSs and SIP?
ELSS is a mutual fund that invests primarily in equities, whereas SIP is a technique of investing in a mutual fund. SIP is applicable to all kinds of mutual fund investments, including ELSS.