Equity Linked Savings Scheme
An Equity Linked Savings Scheme, popularly known as ELSS, is a type of diversified equity scheme which comes, with a lock-in period of three years, offered by mutual funds in India.[1][2] They offer tax benefits under the Section 80C of Income Tax Act 1961.[3] ELSSes can be invested using both SIP (Systematic Investment Plan) and lump sums investment options.[4][5][6] There is a three years lock-in period, and thus has better liquidity compared to other options like NSC and Public Provident Fund.[7] Mutual funds are subjective to fluctuations in the market.
Features
[edit]- Investment Options: ELSS investment can be made in SIPs as well as on a lump sum basis.
- Lock-in Period: These have a lock-in period of three years which is much more flexible than NSC and PPF.
- Market Exposure: ELSS funds majorly invest in equity and related instruments, they are highly exposed to market risks hence very volatile.
- Tax Benefits: Investment of up to ₹1,50,000 every financial year is eligible for deduction under section 80C.
- Returns: A flat rate of 10% is charged on long-term capital gains exceeding ₹1 lakh.[8]
See also
[edit]References
[edit]- ^ T, Madhu. "Tax saving: Recycling your ELSS investments is a very bad idea". The Economic Times.
- ^ Five mistakes to avoid when investing in an ELSS fund
- ^ "Funds aimed at enabling investors to avail tax rebates under Section 80-C of the Income Tax Act".
- ^ Zaidi, Babar. "Investment in SIPs yields better returns than timing the market: Study". The Economic Times.
- ^ "What's a mutual fund SIP?".
- ^ "Should you invest a lumpsum in ELSS?". The Economic Times.
- ^ "Business News Today: Read Latest Business news, India Business News Live, Share Market & Economy News". Archived from the original on 21 February 2013.
- ^ "ELSS Funds for tax saving under Section 80C; know all the benefits". The Times Of India.
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