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How to save tax up to rs 46800 by investing in elss fund

Compared to Fixed Deposit or NPS, ELSS offers many tax saving facilities along with giving higher returns. Mutual funds earn more than FDs or NPS. Therefore, people who invest in ELSS funds or equities consider ELSS to be more effective.




How good it would be if with the accumulation of money, there is a bumper exemption on tax as well. Tax exemption also means a kind of savings. This savings money can be put to good use elsewhere. There is a similar scheme named Equity Linked Saving Scheme or ELSS, with the help of which one can save up to Rs 46,800.

ELSS is such a fund which gives maximum returns with minimum lock-in period. ELSS is actually a combination of large and medium size stocks. This fund has been designed in such a way that it is easy for the person taking it to save tax. There are many possibilities of growth and higher returns if this fund is held for a longer period of time. There are several features of this fund. For example, you can start it by investing at least Rs 500. Investment facility is also available in this through SIP. The minimum lock-in period of 3 years is available in this fund. That is, after 3 years, you can easily leave this fund and withdraw your money. The biggest feature is that with the help of this fund, a taxpayer can save up to Rs 46,800.

Fund’s salient features

There is a limit on the minimum deposit amount in this fund to save tax. In this fund, you get a minimum deposit of Rs 500 and a maximum of Rs 1,50,000. How much you will earn from this fund depends on your deposit amount and market conditions. If we look at the track record of the last one year, then the situation is satisfactory because mutual funds along with shares etc. have given good returns.

Multiple benefits at once

Actually, ELSS fund is a type of tax saving fund in which most of the funds are deposited in equity schemes. Equity funds are such schemes in which money is invested in the shares of companies. Companies are decided under equity according to the capital in the market and are invested in them. If a person deposits Rs 1.5 lakh in ELSS every year, then one can save tax of Rs 46,800 under section 80C of Income Tax. Also, it is allowed to invest more than Rs 1.5 lakh.

Why invest in ELSS

ELSS is considered to be much better than those who follow the traditional methods of tax saving. Compared to Fixed Deposit or NPS, ELSS offers many tax saving facilities along with giving higher returns. Mutual funds earn more than FDs or NPS. Therefore, people who invest in ELSS funds or equities consider ELSS to be more effective. The biggest thing is that the lock in period of ELSS is very less as compared to FD or NPS. That is, the possibility of higher returns in less time can be found in ELSS.

Who can invest

ELSS can be invested by any person who wants to reduce his income tax under section 80C by investing money in tax saving scheme. It is an equity investment, so those who invest money for a long term and expect returns, who are less concerned about market risk, can make the most of this fund. Since ELSS has a lock-in period of 3 years, this fund is taxed on the basis of long-term gains. If earning more than Rs 1 lakh then interest of 10% will have to be paid.

More work for less investment

There is no need to deposit a lot of money in this fund at once. That is, you do not need to take the tension that you will deposit a lot of money, only then you will be able to take advantage of this tax saving scheme. You can enter this scheme with very little money. By taking out the average of this fund every year, you can start investing with the same money. There is no need to make huge payments for each unit of the fund. If you want, you can start investing from 500 rupees. This also gives you discipline in investing.

Parvesh Maurya
Parvesh Maurya
Parvesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ praveshmaurya24@gmail.com
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