Why Invest in Tax Saving Funds (ELSS) ?

No comments

What are tax saving funds (ELSS) ?

Tax saving funds are the diversified equity schemes with a lock in a period of 3 years. Equity Linked Saving Scheme is a Tax saving tool. The main advantage of ELSS scheme has enabled tax benefits under section 80c upto Rs. 1.5 Lakh and has the growth potential of Equities.
Why Invest in Tax Saving Funds (ELSS) ?
1)      Earning Potential : Since ELSS mutual funds invest in equity related instruments, these schemes would help you to grow your money over a period of time. 
2)      Save Tax u/s 80C up to Rs 1.5 Lakh: By investment in ELSS mutual funds, you are eligible for tax exemption up to Rs 1.5 Lakh u/s 80C. 
3)      Shortest Lock-in period of 3 years: ELSS mutual funds come with the shortest lock-in period of 3 years with comparison to other tax saving investments. 
4)      Tax Free Returns : : None of the returns from tax saving investment options other than PPF are tax free. All the tax saving schemes returns are taxable based on individual tax slab. However, interest in Public Provident Fund is tax free, but that comes with a 15 year lock-in period.

How ELSS Scores over other Tax Saving Options?

PPF
NSC
Fixed Deposit
ULIPs
ELSS
Lock-in period (Years)
15
5 & 10
5
5
3
Minimum Investment
Rs. 1000
Rs. 1000
Rs. 1000
Rs. 1000
Rs. 1000
Historical Returns
@ 7.8%
7.90%
@ 7.0%
0-6%
14% -16%
Tax on gains
Tax Free
Tax on interest earned
Tax on interest earned
Maturity/claims proceed tax free
Dividends & Capital gains are tax free










Top Performing Funds with past returns:
Annualized Return(%)
Scheme Name
Min Amt
Min Sip Amt
3 Year Return
5 Year Return
ADITYA BIRLA SUN LIFE TAX RELIEF 96 - GROWTH
1000
1000
17.57
21.93
AXIS LONG TERM EQUITY FUND - GROWTH
1000
1000
13.19
22.57
PRINCIPAL TAX SAVINGS FUND
1000
1000
16.18
22.08
RELIANCE TAX SAVER FUND - GROWTH
1000
1000
13.67
22.46
SUNDARAM DIVERSIFIED EQUITY (ELSS) - GROWTH
1000
1000
13.91
17.02
TATA INDIA TAX SAVING FUND - GROWTH
1000
1000
17.73
20.82

Keep visiting www.bimahelpline.com

Be Informed | Be Educated | Be Updated

No comments :

Post a Comment