Invest in Mutual Fund's ELSS Scheme for better returns and tax savings, more than 10% profit in 1 year
There is a lock-in period of 3 years on investing in this
Up to Rs 1.5 lakh tax exemption can be availed on investing in it
If you want to invest your money somewhere where you also get the benefit of tax exemption along with better returns then you can invest in a tax saving mutual fund. This scheme belongs to the same category of mutual funds. This is also called Equity Linked Savings Scheme i.e. ELSS. Under the Income Tax Act 80C, tax exemption can be availed on investments of up to Rs 1.5 lakh on investments in this scheme of mutual funds.
This has a shorter lock-in period
ELSS has a lock-in period of 3 years. This means that the money you invest in it can only be withdrawn after 3 years. This is a very good feature of the scheme. This is much shorter than the lock-in period of other schemes run by the government. PPF has a lock-in period of 15 years.
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Investment can be continued even after completion of lock-in period
Investors of ELSS have the facility to continue investing in it even after completion of 3 years and withdraw money when required. Such an option is not found in other schemes.
The investment can be made from Rs.500
A systematic investment plan (SIP) can invest up to Rs 500 in ELSS. There is no maximum investment limit. Investors in this fund get two types of options. It has the first growth and the second dividend pay out. The money in the growth option stays in the scheme continuously, while the companies in the dividend option continue to benefit from time to time. Dividends can be availed once a year in the scheme with dividend option. However, some schemes have received dividends more than once a year.
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These ELSS funds gave good returns
Name of Fund Return in 1 year (%) Return in 3 years (%) Return in 5 years (%) Return in 7 years (%) Return in 10 years (%)
Mira Asset Tax Saver 10.46 6.63 - - -
Invesco India Tax Plan 9.76 5.53 9.19 16.10 11.19
Aditya Birla Sun Life Tax Relief 96 8.96 3.71 8.88 16.13 10.12
Axis Long Term Equity 5.44 5.75 9.14 17.78 14.25
Kotak Tax Saver 5.24 2.64 8.11 14.51 8.59
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