When it comes to investment options that save taxes, Equity Linked Savings Schemes (ELSS) are a particularly attractive option because they offer both tax advantages and the possibility of building wealth. A regular return, tax savings, wealth generation, and/or regular returns are what investors seek out in investment opportunities.
Investors who want to do tax planning and are looking for tax saving funds can get in touch with us at 7834834444.
Features of ELSS Mutual Funds
The following are some crucial characteristics of ELSS funds:
- Equity and equity-related instruments account for at least 80% of the entire corpus that can be invested.
- The fund makes diversified equity investments across a range of market capitalizations, industries, and themes.
- However, there is a lock-in period of three years.
- The invested amount is tax-exempt under Section 80C of the Income Tax Act.
- Income is treated as long-term capital gains and is governed by the present tax legislation.
How Do ELSS Mutual Funds Work?
The Equity Linked Savings Plan includes a variety of equity funds. The main asset class of these funds is listed company stock. The stocks are selected from a variety of industries and market capitalizations, including large, mid, and small caps. The long-term goal of these funds is to maximize capital appreciation. After completing extensive market research, the fund manager selects stocks in order to provide the best risk-adjusted portfolio returns.
What are the Tax Benefits of ELSS funds?
Section 80C of the Income Tax Act of 1961 provides tax benefits for investments made in an ELSS fund. There is no cap on the total amount that can be invested, but the IT Act permits a tax deduction of up to Rs. 1.5 lakh. One can reduce their annual tax liability by up to ₹46,800 by putting this money into an ELSS.
What are best elss to invest in 2024?
Here’s a list of the best ELSS funds for investors who might want to invest.
- Quant ELSS Tax Saver Fund
- HDFC ELSS Tax saver
- Bandhan ELSS Tax saver Fund
- SBI Long Term Equity Fund
- Motilal Oswal ELSS Tax Saver Fund
- Bank of India ELSS Tax Saver Fund
- Nippon India Tax Saver (ELSS) Fund
- Franklin India ELSS Tax Saver Fund
- Parag Parikh ELSS Tax Saver Fund
- DSP ELSS Tax Saver Fund
What are the Risks and Considerations of Elss Funds?
Market Risks
ELSS funds are subject to changes in the market. Investment values can increase or decrease in response to the performance of the equity markets.
Exit Load
Certain funds might impose exit loads on redemptions done prior to the end of a specified period. The fund’s exit load structure is something that investors need to know.
Tax Implications
Even though ELSS investments have tax advantages, capital gains tax is applied to the returns.
Final thoughts!
ELSS Funds have a special three-year lock-in period and function as tax-saving tools. They offer potential tax benefits along with exposing investors to the equity market. However, before adding ELSS funds to their portfolio, they can get in touch with us at 7834834444 to avail themselves of the best ELSS funds.
Disclaimer
Remember that the information above does not imply that RKFS recommends any specific other mutual fund; rather, it is provided solely for educational purposes. We accept no responsibility for any funds acquired or purchased as a result of investing in any of the aforementioned plans.
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