ELSS : Why Wait For The Year-End Scramble To Save Tax
ELSS is definitely the solution to your tax woes. Know how.
It is common among the salaried community to go through a rush for tax-saving around Jan-Feb each year. Company HR sets deadlines for submitting investment proofs. Some make a rushed investment in anything that carries a ‘tax-saving’ tag, others miss the bus altogether and regret later.
Here’s a way to hit not two, but three birds with one stone – avail tax benefits on the investment, earn great returns on your money, and even have the returns entirely tax-free.
Of all the tax saving options out there, the equity linked savings scheme (ELSS) is far and away the best:
- It is offered by the most trusted names in the market – including ICICI, SBI, HDFC, Birla, DSP BlackRock and other mutual funds
- It has the lowest lock-in period (3 years). Most others have 5 years or longer
- It provides the best returns. Equities return the most over the long term, not fixed deposits or post office schemes
- It has the lowest charges and commissions. Insurance schemes, in contrast, siphon a lot of your premium into agent commissions and hence get you less bang for the buck
Best of all, the ELSS is available as a monthly investment (SIP), to avoid the last minute rush that happens in Jan-Feb. From the comfort of your phone or laptop, you can now setup a monthly investment in the ELSS that takes care of your returns and tax-saving in one go.
You can invest upto Rs 12.5K every month from April through March to avail the full tax benefit.
- Your provident fund contribution counts towards this – a look at your salary slip should tell you how much that is. You can remove that from the above number
- If you have any home loan being repaid or have an insurance policy running, you can subtract that principal / premium as well
- If you are starting later than April, do adjust for the lost months!
Click Here to know what’s exactly the best way to go about with ELSS and Tax-Saving.