The Buyt Desk
Equity-linked Saving Schemes(ELSS) are suited for investors who do not hesitate to take risks for better returns. This is a kind of mutual fund which gives an exposure to equity(share market) with the benefit of tax saving. Therefore, it is called an equity-linked saving scheme.
If you are looking for reasons to invest in ELSS, we give you many. However, the main reason one should invest in ELSS is that this scheme has the potential to pay higher returns as compared to other traditional investments. This scheme invests corpus in stock and offers better returns in the long term.
It has a three-year mandatory lock-in period. However, compared to other options, it is the shortest time. Let’s check other benefits you get by investing in ELSS.
It Gives Tax Benefits – ELSS investment get a tax deduction under section 80C of Income Tax Act. If you invest in ELSS, it will reduce your tax liability by up to Rs 1,50,000. You can invest any amount in ELSS and enjoy great returns, however, 1,50,000 will be tax-free. On the maturity of ELSS, gains upto Rs 1 Lakhs is tax exempted.
You Invest In Equity With Saving – If the stock market has not been in your mind or you are hesitant about investing in it, then ELSS is the right way take the first step. Instead of investing in PPF, ULIP or any other plan that gives a return in the range of 7-8 %, use ELSS for a better post-tax return.Create a diversified portfolio with high-performing companies. Then, give it some time to grow. This way, equity will yield you higher returns.
Develop Investment Habits – You can reap benefits in ELSS when you invest in the scheme for the long term. So, when you are coming to ELSS, get in with a long term aim. If you do not want to invest in a lump sum, start with a small amount and invest in ELSS via SIP. You can start investing in ELSS via SIP with a minimum of Rs 500. Indeed, ELSS has a lock-in period, but that also has benefits to offer. By investing in ELSS for three years every month, eventually, you develop a habit of saving. After three years, ELSS will give you a return every month, and if you acquire a habit of saving from this, it will be a bonus for you.
How To Invest ELSS?
To invest in ELSS, the investor has to be mutual fund KYC compliant. One can choose to invest money online or offline. There are three methods present to invest in ELSS.
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Visit the website of the mutual fund company.
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Visit the RTA website. (Registrar and transfer agent)
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Visit the online mutual fund platform.
One can select any of the options on the website. On any of the above-mentioned websites enter primary details like phone number, email ID and PAN number. The PAN number will automatically confirm whether the investor mutual fund is KYC compliant or not.
For mutual fund KYC complaint investors, the process is simple. One has to select the scheme and payment option based on need. There are two options present to invest, lump sum and SIP.
After entering the required details, pay online using various options.
