ELSS funds are equity funds. Any investor who invests in ELSS funds should understand that they are investing in equity funds before going into tax benefits associated with these funds. Within equity funds, ELSS funds are similar to large-cap funds with some mid/small cap flavors.
The ELSS or equity-related savings scheme is similar to another equity fund, with an additional benefit of Income Tax Act deduction U / s 80C, with a maximum amount of Rs.1.50 lakhs. An investor has all the advantages of investing in an equity fund by investing in ELSS funds. ELSS must have a portfolio of at least 80% equity securities. Investor investment has closed for three years. I am going to keep it very short and straight because the hype around ELSS is very high.
What is unique about ELSS funds?
Under Section 80C of the Income Tax Act, any investment in an ELSS equity fund is exempt from income tax. Before taxes calculate, it can deduct from your income. It is subject to a total investment limit of Rs 1.5. This cap is not limited to ELSS funds, but can also enjoy other expenses/investments.
There is also a 3-year lock-in to enjoy this tax benefit. Any benefit during this period is tax-free and the withdrawal amount after three years is also tax-free. One result ELSS list as EEE Investment – Investment Amount Tax Exemption, Return Tax Exemption and Withdrawal Amount Tax Exemption. Nevertheless, if you are investing for more than one year, you will get the last two profit-tax-free appreciation and tax-free withdrawals with any equity fund.
Should you invest in ELSS funds?
If you think you should invest in an equity fund, you should only invest in ELSS funds. Equities have the potential to produce double-digit returns but can show significant performance fluctuations in any one year, including negative returns. So, in general, you should consider investing in an equity fund if you can invest for a more extended time (7+ years, even if the lock-in is only three years) and also that you have a risk appetite for sitting and in the meantime.
If you do not invest in ELSS investment, can you still get 80C profit?
If you do not want to invest in an ELSS / equity fund or you do not want to invest the entire amount of Rs 1.5 lakh in an equity fund, then you are still under 80C through other expenses and investments and claim full tax benefits available.
Some of the common expenses covered by this act are life insurance premium payments, home loan principal payments, children’s education expenses, etc. PF and VPF contributions are also eligible for 80C. PPF and Sukanya Samriddhi Yojana are two other EEE investments that fall under this act. Both loans are in the flavor of debt investment — they pay each year continuously that tie to current interest rates —. They are suitable for building diversified portfolios / for risk-averse investors.
RELATED ARTICLES
Latest Articles
- Equity Trading in Global Markets: Key ConsiderationsIn TipsNovember 4, 2024How prepared are you to explore the possibilities that […]
- Crafting a Standout Resume and Networking Your Way to Jobs in CanadaIn TipsOctober 23, 2024When applying for jobs in Canada, the format of your […]
- How to invest in the future?In TechnologySeptember 27, 2024Who doesn’t want to build up some extra pension […]
- How to De-Stress While TravelingIn TravelAugust 7, 2024Traveling can be an exciting adventure, offering […]
- Online Gaming: A Revolution in Entertainment and Social InteractionIn EntertainmentJuly 16, 2024The world of online gaming has seen remarkable growth […]
- Dark Past Vehicle History Report Can RevealIn AutomotiveJuly 9, 2024The more well-maintained a used car, the harder it is […]
- Enhancing Your Craft: Advanced Techniques in Woodworking SpindlesIn TipsJune 27, 2024If you’ve been performing basic techniques on […]
- Ways To Create Unique Cosplay OutfitsIn FashionMay 7, 2024Cosplay is popular among fans of certain movies, TV […]
- Mastering the Art of Machine Vision: Choosing the Perfect Lens for Optimum PerformanceIn TechnologyMay 2, 2024Key Takeaways: Machine vision is a technology that […]
- Unlocking Success: Mastering Bank PO Interview PreparationIn EducationApril 24, 2024For banking careers, PO interviews stand as formidable […]
- The Strategic Value of Purchasing FontsIn TipsApril 18, 2024In today’s visually driven world, fonts are more […]
- Revolutionizing Business: How AI Transforms Customer Experience in the Inflatable IndustryIn BusinessApril 16, 2024Inflatable water slides are the epitome of summer fun, […]
stopie.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.
Clicking on an Amazon link from stopie.com does not increase the cost of any item you purchase.
We will only ever link to Amazon products that we think our visitors may be interested in and appreciate learning more about.