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Equity Linked Savings Scheme: Tax Exemption
Equity Linked Savings Scheme: Tax Exemption
Equity Linked Savings Scheme: Tax Exemption
Tax Exemption
Under Section 80C of Income Tax Act, you have the option to invest
a sum of Rs.1,00,000/- and avail exemption. The Equity Linked Saving
Scheme (ELSS) is one such investment option.
Investment in ELSS
has gained returns as high as 22% – 26% in the past 5 years
It is an established fact that in the long run equity gives a much higher inflation
adjusted returns when compared to any other investment.
Returns
The top 5 ELSS funds have given returns from 30
22 per cent to 26 per cent compounded 25
annually over the past 5 years. This is again
20
higher than the market (Nifty) returns over
Returns
the past 5 years which is at 19 per cent. 15
10
0
ELSS NIFTY
Lock-in period
as compared to other Tax saving schemes
Tax benefits.
Earning potential is very high as it is equity linked
scheme.
A lesser lock-in period
Investor gains money during the lock-in period
and he also have the option of dividend.
Systematic Investment Plan is a part of ELSS.
Benefits of investing in ELSS
over other tax-saving instruments
Investments in ELSS enable an investor to claim deductions under section 80C
upto Rs 100,000. Since this is an equity-linked scheme, the earning potential is
very high (although at a higher risk) as compared to other tax-saving
instruments.
The lock-in period is the shortest, three years, as compared to other tax saving
instruments. The maturity period for NSC and PPF is six years and 15 years
respectively.