Want to save Taxes? Invest in the Mutual Funds.

If you are seeking advice on long-term investment, every second person with some knowledge of finances will be seen promoting for the tax- saving mutual funds. Wondering why? Why is everyone recommending ELSS these days? Here’s the reason-

ELSS also called as Equity Linked Savings Schemes are known to be an ideal instrument that can save your taxes and holds the capability to give you potential benefits from your market investment at the same time.

Before knowing about the detailed benefits from ELSS here are some short insights that might be favorable for the further read-

1.    ELSS allows you to invest in equity market where the lock-in period is ideally meant for 3 years

2.    It provides equity market capital gains along with the tax saving benefits

3.    Section 80C of the Income Tax Act, 1961 can be taken into control via tax deduction of up to 1.50 lakh

By now you must be getting curious to know more about these magical tax-saving mutual funds. Take a look-

1. High returns with less redemption worries- Investing in the equity market through ELSS makes you eligible for the potential benefits from the capital market and the 3-year lock-in period gives you the plan for long-term investment without much worries for the shorter redemptions.

2. Tax-Free Dividends- The interest generated through mutual funds in tax-free, hence saving you from paying any extra money as opposed to the traditional bank deposit schemes. So be it return, dividends or the capital gains, stay tax-free for everything with mutual funds.

3. Returns of 15 % *- As the investment in ELSS is directly linked to the market scenario it can give you returns as high as 15 % which is more than any other tax-saving avenues.

4. Indexation benefits- When investment is made through mutual funds, the real part of gains, i.e. capital gains are subject to indexation benefits.

5. Mutual Funds Tax-exemption under section 80 C- All the investments you did up to 1.50 lakh in ELSS are eligible for Tax-exemption under section 80 C. One can get exemption up to   46350 if he/she falls in the applicable tax slab of 30 percent.

6. A long-term investment for better goals- It provides you with the option to realize your long-term goals with the only condition of being reviewed at regular intervals for the ongoing performance.

7. Invest according to your choice- Lump sum or the SIP (systematic investment plan), you can choose any option to invest in mutual funds. However experts, generally advice for lump-sum investment for tax-saving purposes.

8. Professionals at your service- While being managed by professional fund-managers, with expertise in handling these investments, the ELSS gives you risk-less and tension-less investment option with the team dedicated to tracking the market diversification for your funds.

9. Counter Market Volatility with SIP- The changing and volatile market dimensions can be managed easily when you opt for SIP in ELSS. This the safest way to play this mutual funds game.

10. Invest as low as 500 - One can start investing though SIP with smaller amounts as low as 500 at regular intervals.
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