Tax planning is one of the major tasks for some people. They were at the various stage of tax planning at any point in the financial year.
Some people want to invest as soon as possible and some people are looking for a very good tax savings option and some people want to know about the best tax-saving mutual fund scheme.
So in today’s article, I am going to tell you about the same, that is ELSS.
What is ELSS Mutual Fund?
The Mutual Fund Scheme or Equity Linked Savings Scheme (ELSS) is a very good way to save tax under Section 80C. You can invest up to Rs.1.5 lakh to save income tax in ELSS equity under above section mentioned. Like all the other tax saving options that come under Section 80C, ELSS also has a lock period of 3 years.
If you are thinking of investing in ELSS, it will be better this year to save your income tax that you start investing right now. Apart from this, this option provides financial discipline and also you get a lot of time to discuss in which scheme of ELSS you should invest.
Also Read: What is SIP
How can you invest in ELSS Mutual Fund?
Just go to the company website where you can invest in lump sum or you do not have to do more than just have to start a systematic investment plan that is SIP in ELSS Tax Saving Mutual Fund Scheme. As soon as you start a twelve-month SIP, your money is automatically invested every month in the tax saving scheme.
Also Read: How to Invest in Mutual Fund?
Is there any risk in investment in ELSS?
ELSS scheme is a type of equity mutual fund scheme that invests in the stock market. As we all know that the stock market is an unstable system that has fluctuations, so if you are ready to take the risk, then only you should invest in ELSS.
As mentioned, this scheme has a lock-in period of 3 years but I will suggest you if you have time for five to seven years only then you should invest in this scheme.
Most of other tax saving options offered by the government provide certain income, but the returns are very low. Investing in the stock market by ELSS is likely to get good returns in the long run.
What are the best ELSS Mutual Funds?
The following are the recommended ELSS in 2017 who have given a good performance in the last few years.
- DSP Black Rock Tax Saver
- Axis Long Term Equity Fund
- Birla Sun Life Tax Relief Ninety Six
- Franklin India Taxshield.
Also Read: Tax Saving Schemes in India
As it has been clearly said that “Mutual fund investment is subjected to market risk”. when some people heard this sentence they get feared but If you have researched well about the market and various scheme then you can earn good income in ELSS. But yes I will suggest you make an enough research then and then only invest in any fund because we all know that money cannot be earned easily.