Mutual Fund- The Best Income Tax Saver

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    December the month of festivals, but for employees this is a month to collect proof of their investments to save more and more tax.
    The Tax could be saved by the investment of about Rs 1.50 lakh in equity-linked savings scheme (ELSS) under section 80C of income tax act, this makes it top mutual funds India. Let us discuss more about ELSS- its categorization, features, benefits, etc.

    ELSS- Equity Linked Saving Scheme this is a diversified equity mutual fund saving scheme, it gives the benefit of tax reduction as well as capital appreciation; it also has a locking period of three year which is by default.

    Reasons to invest in ELSS

    Generally, tax saving schemes come with the locking period of 3-15 years, but ELSS has come with minimum locking period of 3 years as compared to other tax saving instruments this period is much lower like Public Provident Fund that has minimum locking off period of 15 years, EPF, Employee Provident Fund locked until your employment, then we have NPS- National Pension Scheme which is locked money until your 60th birthday and allows to withdraw conditionally above all we have ELSS.

    Conditions after 3 years of locking period

    The investor has the option to continue the fund units after three years or may redeem them, fund managers suggested to investors to hold the fund for the longer period if it performs in the line of your objective of investment, as it satisfies all the financial expectations.

    Most importantly the capital gain in ELSS fund is tax free, no tax levied on the principal amount, interest and maturity amount. There are three major choices that can be selected according to goals and objectives:

    Growth plan: it allows the investment to grow until its withdrawal, benefits can be received only at the end of the tenure which helps is NAV that ultimately multiplies the profits
    Dividend plan: after the growth of Net Asset value, i. Should you liked this information in addition to you would like to be given guidance concerning collect tin certificate kindly check out our webpage. e., the NAV dividend plan provides some money back to you.

    The amount returned by dividend is not liable for taxation by the government and that amount is tax free.
    Dividend reinvestment plan: it allows the payout of dividend fund to invest further into some other plans for better returns.
    The benefit of investing top reported ELSS:

    Some of the major top performers of ELSS are Aditya Birla sun life tax relief 96 with the return of 19.78% when invested 5 years, axis long term equity fund with the interest rate of 20.54%, investing in one of the top 10 mutual funds gives confidence and strength.
    Returns are much higher as compared to FD and PPF.
    Easiest options are SIP to invest monthly in ELSS fund.
    The investment could be as low as RS 500, which says small changes make a big makeover.
    ELSS is helping many people, especially the younger generation accepting this change of investment in society and helping their parents to understand it in better ways and get higher profits from small capitals that save income tax too.

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