Jan 01, 1970 2 min read

Why ELSS is the Best 80C Investment in India?

Here’s how ELSS overcomes all the other tax-saving instruments under section 80C.
Are you among those who are looking for such instruments which can help in building wealth along with saving taxes? Do you have any idea that there is the best tool for attaining such benefit? You must have heard about the Section 80C investment which provides the tax deduction up to Rs.1.5 Lakh from the total taxable income.

The instruments that offer the 80C deduction benefit include the Fixed Deposits (FDs), National Pension Scheme (NPS), Life Insurance Policy, and so on. Investing in any of these plans help in reducing the tax liability to a great extent. But among all, it is important to make the right choice. Your goal must not be tax-saving only when you can create wealth alongside. Yes, you heard it right!

ELSS Funds

The ELSS, i.e., Equity Linked Savings Scheme is the plan that fosters wealth building through equity investments and tax savings on a simultaneous basis. It has the edge over all the other tax saving investment options due to the benefits which it offers. Let’s have a look at the advantages of this fund over other investment options.

  • The minimum amount one can invest in the ELSS mutual fund is Rs.500 only, and there is no cap on the maximum that you can put in it.
  • The investments in these funds come with a three years lock-in period only which is quite less in comparison with other instruments, and one can withdraw the funds immediately after completion of the stipulated time.
  • An investment in the ELSS up to an amount of Rs.1.5 Lakh is eligible for tax deduction under Section 80C of the Income Tax Act. Moreover, the returns fetched by the investors in ELSS investments are further non-taxable.
  • The long-term capital gain fetched by the ELSS investors is also exempted from tax and because of the lock-in period of three years, the capital gain attained is in the long run only providing assured benefits.
  • ELSS Funds provide the dividend and growth options to the investors. In the case of dividend option, the investors are entitled to earn dividends even during the lock-in period. On the flip side, in the case of growth fund, one gains an accumulated corpus at the time of maturity.
  • The returns in the ELSS funds have been tremendous which can be analysed by the annual and SIP returns generated by the schemes. The ELSS plan, i.e., DSP Blackrock Tax Saver Fund has generated annual returns at the rate of 11.27% in the year 2016, which is much higher than the set benchmarks.
  • Moving towards the SIP returns of the schemes in ELSS category, it has been observed that some of the funds have given more than 60% in five years, and greater than 100% returns in the period of ten years.
  • The funds have notable performance record in the volatile markets as well where they have beaten the market benchmarks with great margins.

So, it is no way wrong to say that the ELSS mutual funds have much more than what is desired by the investors. Along with tax savings on your income, you get the best opportunity to earn tremendous wealth over time.

If you find the ELSS funds suitable for your investment requirements, then you must buy an ELSS fund online at MySIPonline. We have the best recommendations to help you attain the maximum possible advantage of the ELSS investment in India. Our advisors will further assist you in taking adequate investment decision for your future financial requirements.

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