Every taxpayer wants to save tax as income tax for their income. There are many ways to save tax according to income tax act 1961. The most common way to save under section 80C up to 1.5 lac per annum, like Employee’s share of PF contribution, NSCs, Life Insurance Premium payment, Children’s Tuition Fee, Principal Repayment of home loan, Investment in Sukanya Samridhi Account, ULIPS, ELSS, Sum paid to purchase deferred annuity, Five year deposit scheme, Senior Citizens savings scheme, Subscription to notified securities/notified deposits scheme, Contribution to notified Pension Fund set up by Mutual Fund or UTI., Subscription to Home Loan Account scheme of the National Housing Bank, Subscription to deposit scheme of a public sector or company engaged in providing housing finance, Contribution to notified annuity Plan of LIC, Subscription to equity shares/ debentures of an approved eligible issue, Subscription to notified bonds of NABARD etc.
Today we will discuss about ELSS (Equity Linked Saving Scheme). An ELSS is allows an individual or HUF a deduction from total income of up to Rs. 1.5 lacs under Sec 80C of Income Tax Act 1961. If an investor may invest Rs. 50,000 in an ELSS, then this amount would be deducted from the total taxable income, thus reducing her tax burden. ELSS schemes have a lock-in period of three years from date of units allotment. After the lock-in period is over, investors are free to be redeemed or switched the units. ELSS offer both growth and dividend options. Investors can also invest through Systematic Investment Plans (SIP) or lumsum and investments up to ₹ 1.5 lakhs for a particular financial year are eligible for tax deduction.
let know about some ELSS schemes …
| Sr. No. | Scheme Name | Take Action | Inception Date |
|---|---|---|---|
| 1. | Mirae Asset Tax Saver Fund | INVEST NOW | 20 Nov 2015 |
| 2. | DSP Tax Saver Fund | INVEST NOW | 27 Nov 2006 |
| 3. | HDFC Taxsaver | INVEST NOW | 18 Dec 1995 |
| 4. | UTI Long Term Equity Fund | INVEST NOW | 01 Aug 2005 |
| 5. | Kotak Tax Saver Fund | INVEST NOW | 29 Sep 2005 |
| 6. | Aditya Birla Sun Life Tax Relief 96 | INVEST NOW | 06 March 2008 |
| 7. | Axis Long Term Equity Fund | INVEST NOW | 17 Dec 2009 |
| 8. | ICICI Prudential Long Term Equity Fund | INVEST NOW | 09 July 1999 |
| 9. | Canara Robeco Equity Tax Saver Fund | INVEST NOW | 02 Feb 2009 |
| 10. | SBI Long Term Equity Fund | INVEST NOW | 07 May 2007 |
Advantages to Invest in ELSS
- Save up to Rs. 46800 in a year as income tax.
- Lock in period of 3 years, the shortest option in all 80C OPTIONS.
- ELSS gives highest returns among all 80C options in long term.
- Invest with minimum amount as Rs. 100 only.
- Easy formalities to invest and withdraw after lock-in period.
- Invest as lumsum or recurring (SIP) basis.
Types of ELSS:
As an investor, you must be aware of the types of ELSS funds. These are:
- Growth Fund : This is a long-term wealth creation platform for investors, where the full value of funds is realized at the time of withdrawal.
- Dividend payout : Here you have two options: Dividend payout and dividend reinvestment. In case of dividend payout, you will receive the tax-free dividend, while in case of the latter, your dividends will be reinvested.
If you have any queries and want to invest in ELSS Contact us to kbkumawat@gmail.com.
