Why is ELSS better than other tax saving instruments?
Equity exposure You might already know the potential of the stock market and how it can help you generate excellent returns on a long-term basis. Apart from ELSS funds, no other tax saving instrument under 80C offers such high exposure in equity. Thus, with an ELSS fund, the chances of capital appreciation are higher.
Which option is best for tax saving?
Investment options under Sec 80C
Investment | Returns | Lock-in Period |
---|---|---|
National Pension System (NPS) | 12\% to 14\% | Till Retirement |
ELSS Funds | 15\% to 18\% | 3 years |
Unit Linked Insurance Plan (ULIP) | Varies with Plan Chosen | 5 years |
Sukanya Samriddhi Yojana (SSY) | 7.60\% | N/A |
Is investing in ELSS a good idea?
Conclusion. ELSS funds are a good option for investors with a long-term investment horizon looking to seek exposure to the stock markets and save taxes. There are various ELSS funds available.
Is NSC or ELSS better?
Even though ELSS funds offer better returns, they are subject to market risks. Also, in unforeseen market events, the investment could fall back offering no returns. On the other hand, NSC offers fixed returns regardless of external factors. ELSS funds have a 3-year lock-in period while NSC has a 5-year lock-in period.
What is the benefit of ELSS?
Tax Benefit One of the primary reasons to invest in ELSS is to save tax. Investments in ELSS qualify for tax deduction under section 80C of the income tax act of 1961. But any dividend or long term capital gain earned by the investor is exempted from income tax. Simply, your returns from ELSS become tax free.
Is Fd better or ELSS?
ELSS funds offer great tax benefits, and unlike FDs, the dividend earned on the investment will not be subject to tax deduction. Let us take a look at some of the key features of ELSS funds: ELSS funds have a comparatively shorter lock in period of 3 years, while tax saver FDs come with a lock-in period of 5 years.
How can ELSS save tax?
An equity-linked savings scheme or ELSS is a tax-saving investment under Section 80C of the Income Tax Act, 1961. By investing in ELSS, you can claim a tax rebate of up to Rs 1,50,000 a year and save up to Rs 46,800 a year in taxes. An ELSS is the only kind of mutual fund eligible for tax benefits under Section 80C.