Equity-linked savings scheme
Equity-linked savings scheme popularly known as ELSS are close-ended,lock-in period of 3 years diversified equity schemes offered by mutual funds in India. They offer tax benefits under the new Section 80C of Income Tax Act 1961. ELSS can be invested using both SIP(Systematic Investment Plan) and lump sums investment options. There is a 3 years lock-in period, and thus has better Liquidity compared to other options like NSC and Public Provident Fund.
Comparison between ELSS and other tax-saving methods
The comparative between ELSS and popular other tax-saving options in India:
|Investment||Returns||Lock-in period||Tax on Returns|
|5-Year Bank Fixed Deposit||6 to 7%||5 years||Yes|
|Public Provident Fund (PPF)||7 to 8%||15 years||No|
|National Savings Certificate (NSC)||7 to 8%||5 years||Yes|
|National Pension System (NPS)||8 to 10%||Till retirement||Partially Taxable|
|ELSS Funds||15 to 18%||3 years||Partially Taxable|
- 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".
- "Investment in SIPs yields better returns than timing the market: Study".
- "What's a mutual fund SIP?".
- "Should you invest a lumpsum in ELSS?".
- ClearTax. "ELSS Funds - Invest in Best ELSS / Equity Linked Savings Scheme Funds". cleartax.in. Retrieved 2018-11-04.
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