What is ELSS ?

what is ELSS

ELSS – Investment in Mutual Fund with Tax Saving. Save tax with investing in ELSS Mutual Funds.

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What is ELSS?

ELSS i.e. Equity Linked Savings Scheme Equity Linked Savings Scheme is a diversified diversified equity fund which invests its maximum corpus in equity. ELSS is a very popular scheme under Section 80C of Income Tax, which also saves tax and also increases the invested capital. This scheme has a lock-in period of three years. It is very important to understand this plan before investing.

Investment:

You must have known about Mutual Fund Mutual Fund. ELSS is such a mutual fund mutual fund in which you can save in tax along with investment. ELSS ELSS is a diversified equity mutual fund that invests the majority of its corpus corpus in equities. Diversified means that this fund invests in shares of companies of different industries and sizes so that the diversification remains in the fund. It is necessary to understand here that the more diversified to win the investment, the less will be the risk. Since it is an equity fund, the returns from ELSS Fund reflect the returns from the equity market. A better fund manager can give you better returns than the market.

Dividend and Growth:

Like all other equity mutual fund equity mutual fund schemes, dividend and growth options are also available in ELSS. Investors get a lump sum amount at the end of 3 years in the growth option. On the other hand, in dividend option, investors get regular dividend income, whenever the dividend is declared by the fund, even during the lock-in period.

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Lock-in period:

There is a lock-in period of three years on the investment under this scheme, that is, when you invest in this scheme, you cannot redeem your investment for three years. Since it is beneficial to invest in most of the stock market only for a long period, so there is a possibility of getting a good return in three years. You can also invest in ELSS through SIP, which makes it easy to invest and also reduces the risk of investment.

Tax exemption:

You can claim up to Rs 1 lakh of your ELSS investment as a deduction from your gross total income in a financial year under section 80C of the Income Tax Act. Returns from ELSS scheme are also completely tax free. All other investment schemes available for tax exemption such as bank deposit, NSC or PPF, ELSS is available with the shortest lock in period.

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