saving mutual funds benefits
Investments in tax-saving mutual funds, also known as Equity Linked Savings Schemes (ELSS),
can get you a tax break of up to ₹1.5 lakh under Section 80C of the Income Tax Act.
- How much should I invest to save
You can invest up to ₹ 1.5 Lakh under section 80C. When you invest money in Tax Saving
funds during the year, the amount of tax you have to pay in the year is decreased. Also,
you keep earning returns in the amount invested.
- What are the different tax saving
You have many options like PPF, Insurance, Tax Saving FDs, Tax Saving Mutual funds (also
called ELSS) etc.
- Do ELSS funds have an additional
Tax-saving mutual funds come with the dual benefit of tax saving and wealth creation. They
help you not only save taxes but build wealth over the long-term as well, because these
mutual funds invest primarily in equities and earn higher returns than traditional
tax-saving investments like PPF, FDs and NSC
- Lock-in period for ELSS funds
Not only ELSS funds, but all tax-saving investments come with a lock-in period. But
mutual funds have the lowest lock-in period of only 3 years. In comparison, PPF has a
lock-in of 15
years, while NPS and EPF require you to be invested till you retire.