An Equity Linked Saving Scheme (ELSS) is an open-ended equity mutual fund that invests primarily in equities and equity-related products. They are a special category among mutual funds that qualify for tax deductions under Section 80C of the Income Tax Act, 1961.
The Long-Term Capital Gains on ELSS are tax-exempt up to Rs 1 lakh, and dividend received is tax-free in the hands of investors. You can continue to invest in this scheme even after the completion of the lock-in period of three years.
Tax-saver FDs are not as tax-efficient as ELSS as the interest is added to your overall income and taxed at your income tax slab rate. This is a great disadvantage if you fall under the highest tax brackets. This is where ELSS scores much better. Long-term capital gains of up to Rs 1 lakh a year are made tax-exempt.
Equity Linked Savings Scheme or ELSS Funds are open-ended Equity Mutual Funds that help you save and provide an opportunity to grow money. When almost all equity funds restrain you from paying long-term capital gains tax of 10.4% up to an amount of Rs. 1 lakh, ELSS mutual funds offer tax benefits.
Can ELSS be Withdrawn Within 3 years? The simple answer to this question is No. ELSS investments do not provide the option to withdraw the investment amount before the end of the 3-year lock-in period. In ELSS, investors are given fund units against their invested amount.
ELSS or Equity Linked Savings Schemes are also known as tax saver Mutual Funds as investors get tax deduction benefits under Section 80C of the Income Tax Act. ... And therefore, once the 3 year lock-in period is over, you can redeem your entire ELSS investment in one go.
To invest in an ELSS, an individual must be KYC compliant. The investment can be made by visiting the fund house's branch office or the registrar office with a duly filled physical form along with a cheque. One can also start investing online via the fund house's website or aggregators.
As compared to National Savings Certificate (NSC) and Public Provident Fund (PPF) which has a lock-in period of 6 years and 15 years, the ELSS provides very short lock in period of 3 years. Thus, the individuals who want to make a short term investment can also invest in ELSS.
ELSS is an investment vehicle in itself while SIP is not, it is instead a way of investing not only in ELSS but also in any other mutual fund. Therefore, ELSS cannot be compared with SIP as it's not an apple to apple comparison.
NAV or Net Asset Value is the unit price of a mutual fund scheme. Mutual funds are bought or sold on the basis of NAV.
What are the Disadvantages of ELSS Funds? High risk ELSS Funds: ELSS mutual funds have a huge exposure to equity markets. Equity related instruments are highly susceptible to market volatility. Hence, due to this ELSS mutual funds carry high risk.
Yes, since the ELSS investment has completed five years, you can withdraw the first year's investment and re-invest it. Long term capital gains tax would be applicable for capital gains of more than Rs 1 lakh in a financial year.
Under Section 80C of the Income Tax Act, the taxpayer can avail tax deductions from their gross total income. Individuals who have ELSS funds can avail deductions up to Rs1. 5 lakh on the amount invested by them in the ELSS fund.
Don't invest just for tax saving: ELSS schemes provide you tax benefits but in the end, they are equity schemes. So you should remember that they can be risky, but they can be extremely rewarding. Whenever you are picking a tax-saving instrument like ELSS, be careful about the risk, lock-in period, returns, etc.
Log in to coin, and under ' Dashboard ', click on ' Portfolio '. You can select the respective financial year and generate the ELSS statement. Note: If you're doing a SIP in the ELSS fund, then each instalment will be treated as a separate investment, and it will be locked for three years.
Many financial wizards believe it is a great idea to sell ELSS investments as soon as the lock-in period is over and invest the money again in an ELSS to claim the tax benefits under section 80C. As you know your investments in an ELSS qualifies for a tax deduction of up to Rs 1.5 lakh in a financial year.
A closed-end fund is a type of mutual fund that issues a fixed number of shares through a single initial public offering (IPO) to raise capital for its initial investments. Its shares can then be bought and sold on a stock exchange but no new shares will be created and no new money will flow into the fund.
ELSS mutual funds have a mandatory lock-in period of 3 years. You can switch from the regular plan of an ELSS mutual fund to the direct plan after the lock-in period of 3 years. This means that switches and redemptions are not permitted before 3 years.
You don't need a demat account to invest in a mutual fund
You can buy mutual funds, including Equity Linked Savings Schemes (ELSS), through an AMFI-certified mutual fund advisor or directly through a fund house's website. ... Earlier, a demat account was necessary to buy through an exchange.
An equity-linked savings scheme (ELSS) is a tax saving mutual fund. It is a fund in which you can invest like in the case of any other mutual fund. The only difference is that these funds are subjected to a lock-in period of 3 years and offer tax exemption under Section 80C of the Income Tax Act.
An ELSS or equity-linked mutual fund is an equity mutual fund. It invests a significant amount of its corpus in the stocks of listed companies. Just like other equity mutual funds it is subject to market risk. ELSS has the potential to deliver long term capital appreciation.