The ELSS Fund One kind of mutual fund is called an equity linked savings scheme, or ELSS. Investors love this mutual fund because it offers millions of rupees in tax exemptions (Tax Saving Scheme). It also provides a strong return because it is a mutual fund. Let’s discuss it in more depth.
The end of the current fiscal year is just a few days away. On April 1, 2025, the new fiscal year 2025–2026 will begin. You still have a chance if you want to reduce your taxes.
The ELSS Fund can be a better choice if you want to improve your returns while also saving money on taxes. It provides higher returns because it is a mutual fund. You can also save lakhs of rupees in taxes in addition to this.
By investing in certain instruments, you can save up to Rs 1.5 lakh in taxes under Section 80C.
ELSS Fund: What is it?
Another name for ELSS is the Equity Linked Savings Scheme. This kind of mutual fund saves taxes. All of your funds are invested in shares under ELSS. This raises the danger.
However, there is a good probability of receiving higher rewards in addition to the risk. However, it does not guarantee returns, in contrast to other tax-saving plans like National Savings Certificate, PPF, or bank FD.
What is your rate of return?
ELSS Returns: You can invest for a long time and build a sizable portfolio under ELSS. According to ELSS, you can expect a 16–18% return on your investment after 10 years. Nevertheless, this return is contingent on market swings.
In addition, other secure plans like PPF, Sukanya Samriddhi Yojana, and NPS do not offer this return. These strategies yield returns of about 6 to 8 percent.
ELSS investment amount: Rs 500 is all you need to start ELSS. The mutual fund SIP option is also included in this. This implies that you can make installment deposits as well.
Lock-in period: In addition, the lock-in period begins on the day you begin making investments under the ELSS plan. For three years, your money is deposited into the system; you are not permitted to withdraw it during this period, but you are free to do so after the three years have passed.
You can make installment deposits under SIP. For three years, the date you choose to make the installment payment is locked in.
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