Equity Linked Saving Scheme (ELSS)- Overview

Today in Engineer's World, we are discussing a topic of Finance in very easy way. Posted By - +Nitin Gautam  +LIVE VIAR +ASP.NET SOLUTIONS 

Click
imagination hunt to read latest blogs.

Previous - Top Mutual Funds

What is Equity linked saving scheme(ELSS)?

ELSS is the part of Mutual Fund Investment. Equity Linked Saving Scheme(ELSS) directed as per the ELSS mutual fund guidelines issued by CBDT under section 80C of the Income Tax Act 1961. The purpose of recommending ELSS is to encourage investments in equities by providing tax rebate or exemption.
The maximum Tax amount up to Rs. 1.5 Lakhs (for the current financial Year), is to be exempted by investing in ELSS scheme.

Investors who invest in ELSS funds are investing in a fund where minimum part of their investment means 80% of the invested amount can be in equities and equity related securities. If we are comparing the return on investment(ROI), ELSS gives the higher performance than other tax saving instrument.
ELSS investments come with a locking period of three years, where the long-term capital gains and dividends are tax-free.

The lock in period is only of three years making it the best option with the shortest lock-in period in tax saving options/scheme.

Benefits OF ELSS Investment

1. Tax exemption: Investor by investing Rs. 1.5 Lakhs (current financial Year) in ELSS mutual funds are eligible for tax exemption under SECTION 80C.

2. Minimum Lock in period: ELSS mutual funds come with the lock-in period of three years. ELSS has the least lock-in period compared too other 80C options.

3.Tax-free Returns and dividends: It is the fact that there are the limited tax saving instruments like PPF, ELSS, ULIP and tax-free bonds. Each instrument has different benefits with some limitations.  Corporate Fixed Deposit, NSC, Bank FD, Post office scheme, etc. all these tax saving options’ returns are taxable based on individual tax slab that means whatever the interest you get in that year will be club in income slab. Let's have a look on the interest earn by Public Provident Fund(PPF); Returns are tax-free, but with a limitation that, there is 15-year lock-in period, means you cannot withdraw (apart from certain exemptions to withdraw in between). The best tax saving investment option that provides tax-free returns and high return on investment for a short period is ELSS Mutual funds.

4.Growth with Good Returns: Since an ELSS mutual fund invests in equity related instruments, so these schemes would help you to grow your invested money with better returns when the stock market grows over a period.

Top ELSS Mutual Fund (As on 21th July 2016)

1. Axis long term Equity(G): 
1 Year return- 3.5%, 3 Year return- 28.6%, 5 Year return- 20.3%.

2. Birla Sun life Tax Relief 96(G): 
 1 Year return- 4.8%, 3 Year return- 25.9%, 5 Year return- 16.0%.

3. Franklin India tax Shield(G): 
1 Year return- 4.0% Year return- 24.4%, 5 Year return- 16.8%.

4. Birla SL Tax Plan(G): 
1 Year return- 3.9%, 3 Year return- 21.5%, 5 Year return-   12.0%,

5. BNP Paribas long term Equity Fund(G): 
1 Year return- -1.7%, 3 Year return- 23.0%, 5 Year return- 16.7%. 

6. HDFC Tax Saver Fund(G): 
 1 Year return- 0.4%, 3 Year return- 21.5%, 5 Year return- 11.4%.



For any query, comment us below.

Click imagination hunt to read latest blogs.

Keep learning and sharing...

Comments

  1. Can the author get in touch with me? subha@fundexpert.in.
    You could write for us.

    ReplyDelete
  2. Thank you so much... your blog is giving very useful knowledge for all.i didn’t have the knowledge in this now i get an idea about this..
    thks a lot:-)To know more spot cash for card swipping

    ReplyDelete
    Replies
    1. what is spot cash?

      Delete
  3. Its good if you update returns on daily basis... and I want to know about ULIP, whether its good investment or bad?

    ReplyDelete
  4. You cannot compare ulip with other investments Ulip is for those who wants insurance plus investments for good return over the long duration.

    ReplyDelete
  5. Can any one update the Upcoming NCD details

    ReplyDelete
  6. useful for new users.

    ReplyDelete

Post a Comment

Popular posts from this blog

SSC CGL 2016 Tier-1 Marks / Result

DATA TYPES IN C#

Pattern printing program

IS STRING MUTABLE OR IMMUTABLE IN .NET?

Top Mutual Funds

SSC CGL 2017 TIER 2 RESULT OUT

JUST IN TIME (JIT)

Can we have multiple Main methods in one class

TOP 15 VISUAL STUDIO SHORTCUT KEYS

Top 10 Interview Tips and Questions