5 reasons why you should opt to invest in ELSS Fund

5 reasons why you should opt to invest in ELSS Fund

5 reasons why you should opt to invest in ELSS Fund:

Lock in Period & Tax Saving Scheme:

5 reasons why you should opt to invest in ELSS Fund. There are many tax saving investment schemes, other than ELSS in the market. When compared to other tax saving options like PPF (Public Provident Fund), NSC (National Savings Certificate) and Fixed Deposit (FD) which has a lock-in period of 15, 10 and 5 years respectively. ELSS has a lock-in period of only 3 years.
One of the main reason to invest in ELSS is to save tax. ELSS help you to create wealth through equity and also save tax up to Rs. 1.5 lakh per annum, which you can claim for deduction under section 80C of Income Tax Act.

Start Investing with Least Amount & SIP:

ELSS allow you to start an investment with a low amount of 500 Rupee per month. There is no maximum amount limit to invest. If you can not invest a bulk amount in one go, you can start your lump-sum monthly investment.
You can also opt a monthly investment through Systematic Investment Plan (SIP). SIP reduces the burden of investing a huge amount. It will automatically transfer the amount from your bank account to the Mutual Fund. In one year, the minimum amount to be invested is Rs. 5000.

High Return on Investment:

Under ELSS scheme, the investment is primarily in the equity market. When compared to other tax-saving investment options available in the market, ELSS has given a higher rate of returns in past.
However, the returns totally depend on market and they are not guaranteed. But it is recommended that investment in ELSS Funds be made for the long term to get maximum returns on your investment.

Funds Categorised and Capital Gains are Tax-Free:

Asset Management Companies categories ELSS on the basis of large-cap, mid-cap, and small-cap. These categorizations are depended on the risk and returns. It depends on you how much risk you take while investing in ELSS.
Most of the tax saving investment options offer TDS (Tax Deducted at Source) while making a redemption. When you make an investment through ELSS related schemes, it makes your return totally tax-free.

Protects from Inflation:

Over a period of inflation, PPF and Fixed Deposit offer an in-line rate of return. But in reality, the returns are quite low. ELSS is an equity-based fund and its return is totally tax-free.
So at the time of inflation, schemes related to ELSS give you a higher rate of return as compared to other investment options.

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