Equity linked savings scheme.

Equity linked savings scheme

Equity linked Savings Scheme(ELSS). Friends, today I am going to give you detailed knowledge about The ELSS, in this article. The questions like, What is ELSS? Why is it so important for you?, will be discussed in this article.

Equity Linked Savings Scheme.

What is ELSS?

As I have already written above ELSS stands for Equity Linked Savings Scheme. ELSS is a type of Mutual Fund that gives tax benefits also. You can invest up to Rs 1.5 lac in ELSS schemes and claim for tax rebate accordingly, under section 80C of Income Tax Act 1961. It is a very important investment option for salaried Government Employee.

What is difference between ELSS and Mutual Fund.

There is no fundamental difference between them. Both are Mutual Funds.The only difference between them is tax benefits and lock-in period. You can avail the facility of tax benefits in ELSS. There is a three year lock-in period in ELSS. Your money is invested in stock market in both items. After three years lock-in period you can exit any time from ELSS. You have not to give capital gain tax on it at the time of redemption of your Fund. If you want to continue after three year lock-in period, you may continue. Mutual Funds on the other hand are liquid in nature, it means you can exit from it at any time. Mutual funds are taxable.

How One Can Invest in ELSS?

There are two methods of investment are available for you. You may invest by Lump Sum amount or you may opt for SIP option. Here SIP means Systematic Investment Plan. If you invest in a Mutual Fund in one go, it is called Lump Sum amount, and if you invest a certain amount every month in a Mutual Fund, it is called SIP. It will help you spread the risk and give you the benefit of cost averaging. You can take the help of Any investment adviser of ICICI, kotak Mahindra, SBI, Tata, ABSL, Quantum Mutual Fund. For investing in a Mutual Fund you should have a bank account with Cheque facility and a Pan Card.

So friends if this information is any use for you give your comments and like this article.