Reasons You Should Include an ELSS Fund in Your Investment Portfolio

As soon as you hear the word ‘Tax,’ you experience an era of anxiety where you find yourself surrounded by concerns relating to tax filing and tax planning. Taxpaying is miserable, and everyone out there reading this write-up would agree with us at this point. Although there is no cure for paying such hostile tax amount, there’s always a method to reduce the liability. One such solution is investing in ELSS funds. To know more about them in detail, read this post to the end. Also, don’t forget to note down some of the best ELSS tax saving funds recommended by the experts at MySIPonline. So without further ado, let’s get started!

Before you dig deep into this topic, let’s understand the basics about ELSS tax-saving funds, and what makes them so important for an investor.

Why ELSS Funds?

ELSS or equity-linked savings schemes are open-ended and diversified schemes offered by Mutual Fund India. Investors have the benefit of parking their money in the best funds of ELSS category using both the methods- SIP(Systematic Investment Plan) and lumpsum. It has a minimum lock-in period of three years, and thus offers a better liquidity than other tax deduction options such as NSC and PPF. It is not wrong to state that ELSS tax-saving funds are one of the best tax saving instruments.

Some Key Benefits of Having Your Investments in ELSS Tax Savings Fund: 

1. The ELSS funds have a lock-in period of merely three years, which is the least among other tax-saving instruments under section 80 C of the Income Tax Act, 1961.
2. The investors can get the benefit of a tax deduction of up to Rs. 1,50,000 through ELSS investments under section 80C of the Income Tax Act, 1961.
3. Investors have the option to invest in equities and equity-related securities and get their funds managed by professional fund managers.
4. There is no tax liability on the long-term capital gains and dividends earned from a scheme of this category.
5. One can significantly reduce the stress of last minute rush by investing in the ELSS scheme through Systematic Investment Plan(SIP), and can also ensure the benefits of Rupee Cost Averaging. 

What Should You Check Before Investing in an ELSS Tax Saving Scheme?

The experts at MySIPonline suggest you to perform a thorough analysis of the scheme in which you want to invest in order to gain tax benefits. Also, don’t forget to check the long-term performance of the ELSS fund before stashing your money in it. Look at the fund details such as its current NAV, asset size, fund manager’s investment approach, the expense ratio of the fund, volatility, etc.

If you find the details mentioned above matching to that to your investment objective, then go ahead. In case you are someone who finds it hard to understand such complex terminologies related to finance, then contact our experts for seeking guidance and making the most favorable decision.

Some of the Top ELSS Funds That You Can Choose to Invest in:

• DSP BlackRock Tax Saver Fund (G)
• Reliance Tax Saver (ELSS)Fund (G)
• Axis Long Term Equity Fund (G)

Henceforth, if you’re looking for an investment portfolio as strong as a bull, then don’t hesitate in putting your hard-earned money in this tax saving instrument. To get more knowledge of the same or any other category of mutual funds, get connected with us at MySIPonline, and wave goodbye to all your investment-related worries.