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ELSS qualifies for tax exemption of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act. However when compared to other tax saving options like Mutual Funds, NPS, PF, Term Insurance, etc. these tax savings mutual funds have the shortest lock-in.
Equity-linked savings schemes ( ELSS ) are diversified equity mutual funds with two differentiating features - one, investment amount in them qualifies for tax benefit under Section 80C of the Income Tax Act, 1961, up to a limit of Rs 1.5 lakh a year and.
To accelerate this, and to get more money into equity mutual funds from the smaller cities, teething hurdles should be removed and investors should be incentivised. Signing up a customer is still daunting, mostly because of the amount of paperwork.
This tax saving scheme aims to generate regular long term capital growth from a diversified portfolio of equity and equity related securities in India. This mutual fund scheme is the top performer in the ELSS funds over five years time frame. This.
Here we will talk about tax-saving mutual funds that are also known as Equity Linked Savings Scheme (ELSS). Under the Section 80C Section 10(D) of Indian Income Tax Act, you can get exemptions up to a maximum of Rs 1.5 lakhs and the interest earned is also.
Let us assume that you invested Rs.100,000 in a mutual fund ELSS . You get a 30% exemption (for simplicity we will assume the tax rate to be 30%), which amounts to Rs.30,000. At the end of three years, if the NAV of the fund grows from Rs.10 to Rs.14.
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Otherwise, the gains are taxed as short term capital gains at the rate of 15.45%. Dividends declared by arbitrage funds are tax exempt. Short term bond funds on the other hand are subject to tax. For investments held more than three years, all gains are.
Why ELSS funds should be your Section 80C tax saver Financial Express.
Equity mutual funds are best suited for the individuals who are seeking for long term capital growth and can pursue higher risk. The risk and return vary from scheme to scheme under equity mutual funds as they are either actively or passively managed.