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Save Tax with ELSS

While you work hard to earn money, investing that hard-earned money to save tax and earn good returns is one of the mantras of financially independent future. Taxes tend to eat away at your earnings leaving you with lesser disposable income and further less money to invest.

An Equity Linked Savings Scheme (ELSS) can help you in such a scenario. ELSS is a mutual fund equity scheme. This scheme endeavors to offer wealth creation or capital gain over the long-term along with tax benefits under Section 80C of the Income Tax Act, 1961. ELSS also has a mandatory lock-in period of three years.

The key features of ELSS are:

  • You can invest up to Rs.1.5 lakh at one go or through SIP of as low as Rs. 500 (Systematic Investment Plan) during the financial year which provides deduction from your gross total income up to Rs.1.5 lakh. (U/S 80C of the Income Tax Act, 1961).

  • You can save up to Rs. 46,800* in taxes

  • Long-term capital gains are tax-free up to Rs. 1 lakh. LTCG more than one lakh rupees is taxed at 10% without indexation.

  • Different ELSS schemes invest in a diverse selection of stocks. This gives you the flexibility to invest according to your financial goals.

  • ELSS offers the shortest lock-in period among all the tax-savings schemes under section 80C of the Income Tax Act, 1961.

*Calculated at the highest tax slab rate for FY18-19 applicable on investments u/s 80c. Surcharge has been ignored for ease of calculation.

This is an investor education initiative

Mutual Fund investments are subject to market risks, read all scheme related documents carefully