Every job person desires to save his tax. Everyone knows how to save tax but is not able to invest in a good scheme to save tax. Most investors consider saving tax as a good investment under the Equity Linked Savings Scheme (ELSS). Under section 80 C of the Income Tax Act, investment in ELSS funds provides tax exemption up to Rs. 1.5 lakh every year. If you have the ability to take more risks and you can invest for a more extended period of time, the ELSS fund is an excellent choice for you.
ELSS funds have the potential to deliver better returns in the long term, so if you can invest for five to seven years, you can choose the ELSS fund. Yes, but one thing must be kept in mind that the risk in equity schemes is high. If the risk-taking capacity is low, investment in ELSS fund will not be a good option. The level of risk when investing for a short period is high, so it can be invested in this fund for long-term goals. ELSS mainly has two kinds of benefits…
The most important reason for investing in ELSS funds is to save tax. Every investor invests in this fund to save tax. An investor can avail tax exemption up to Rs 46,800 per year on investment up to Rs 1.5 lakh. However, under section 80 C of the Income Tax Act, a total tax exemption of 1.5 lakh is approved, but there is no ceiling for investing in the equity-linked savings scheme. No matter how much you can invest in it.
The lock-in period in the fund is short:
The lock-in in ELSS funds has a period of three years. ELSS has the lowest lock-in period in the existing tax saving instrument. However, ELSS should not invest only because of a period of three years. ELSS is an equity mutual fund, so it should invest with an investment perspective of at least five to seven years. There must be an ELSS fund in the financial portfolio, which helps in getting long-term goals. In the Corona period, the market is continuing, the time is being described as good for investment. But because of the increasing cases of the corona, this decline may go down even further, so investors are not at the risk of putting money at this time.
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