Equity Linked Savings Scheme (ELSS) is a diversified, open-ended equity mutual fund scheme that offers high returns as well as excellent tax benefits as mutual funds come with the twin benefits of tax deduction and wealth accumulation over time which come under Section 80C of the Income Tax Act. Equity Linked Savings Schemes have a low investment limit with the minimum amount that can be invested being only Rs. 500. Equity Linked Savings Schemes lock-in period of just three years is the lowest among all tax-saving investments and has the highest return potential among 80C options.
Equity Linked Savings Scheme (ELSS) 2023 – Systematic Investment Plan, Notifications, Online Registration, Apply Form Online
ELSS is for those individuals who are at the initial stage of their career and are looking for a good investment option, Such individuals can invest in the scheme and get good returns as it has the highest return potential among 80C options. Individuals who want to invest in relatively low risk products can consider Equity Linked Savings Schemes (ELSS) and Apart from this, this scheme is also ideal for investors who make substantial earnings through any type of high-risk investment and need a means to save tax.
Equity Linked Savings Scheme (ELSS) 2023 Details – Key Features, Tax Benefits, Benefits And Advantages
Features of ELSS Mutual funds:
Dividend and Growth Options: under their Equity Linked Savings Scheme investor can choose either the dividend or the growth option. Under the growth option investor will receive a lump sum amount after the lock-in period and under the dividend scheme investor will receive a dividend regularly, during the lock-in period.
Tax Benefits: The applicant can claim tax exemption of up to Rs 1,50,000 per year and save up to Rs 46,800 per year in taxes by investing in ELSS Mutual funds as per the provision stated under Section 80C of the Income Tax Act.
Systematic Investment Plan: Under ELSS funds investor can use the SIP or Systematic Investment Plan to invest which helps to better plan and execute your tax savings.
Advantages of ELSS Mutual funds:
Tenure: the lock-in period of ELSS Mutual funds is set at just three (3) years which is much lower when compared with other Mutual funds options.
High Return: The returns offered by ELSS Mutual funds are considerably high.
Tax Exemption: Equity Linked Savings Scheme one of the most well liked tax-saving investments under Section 80C of Income Tax Act, 1961.
Investors get a good return as the power of compounding essentially helps investors multiply their principal amount and earn impressive returns.
Minimum investment: there is No maximum limit on investment.
Maximum investment: the Maximum investment in ELSS Mutual funds is only amount in Rs. 500.
Before Availing ELSS Mutual funds need to know following Factors:
- In order to get assured returns, the investor should ensure that the fund performs over a long period of time.
- The investor should have to be looked into other details pertaining to the fund such as the fund portfolio, volatility of the fund, the expense ratio of the fund, etc.
Applicants can redeem only those Equity Linked Savings Scheme fund units that have completed a lock-in period of three (3) years. To redeem ELSS mutual funds you need to log in to your investment account held with the fund house and place a redemption request. The applicant can claim tax exemption of up to Rs 1,50,000 per year and save up to Rs 46,800 per year in taxes by investing in ELSS, as per Section 80C of the Income Tax Act, investment in Equity Linked Savings Scheme up to Rs. 1, 50,000 will be exempted from tax. The Minimum investment limit in Equity Linked Savings Scheme (ELSS) is starts from only Rs. 500 and there is No maximum limit on investment.