What is ELSS
?
ELSS stands for Equity Linked Saving
Schemes. It is very good option for tax saving and better return. It has better
potential returns and comes with 3 year lock-in period which is lower than
other available tax saving instrument under section 80(C).
ELSS schemes are mutual funds which
are professionally managed and invest major part of corpus in equity which have
potential to beat inflation.
In India, equity market has been
negative to range bound for more than 5 years. It make sense to invest in ELSS
due to the expected positive development in domestic market within next couple
of years.
Like other mutual funds it also comes
with two options growth and dividend. You can choose any one of these. Growth
plans gives you a chance for compounded growth with capital appreciation and
you can get it only minimum 3 year lock-in period. Dividend plan provides some
income in your hand during the lock-in period which is tax free in investor’s
hands.
After 3 year lock-in period investor
can reinvest again in ELSS schemes and claim again section 80(C) benefit. By
this method you can less the burden on your pocket for tax saving.
Apart from ELSS many other sections
and investment instruments available which we will discuss later.
For more detail and any
other query related investment, you can contact me through my email.
Warm regards,
Arvind Trivedi
Certified
Financial Planner
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