If you are a tax payer in India and are looking for a good method to plan your taxes efficiently in India, you must be familiar with ELSS mutual funds. ELSS is a great tool that can be used to plan your taxes systematically and legally. It is a great investment with great returns and as a bonus will offer you with sufficient tax deduction.


What is ELSS?

ELSS is Equity Linked Savings Scheme is a tax saving mutual fund that you can invest in to receive up to 1.5 lakh rupees deduction from your taxes. It is a legal tax-planning tool under section 80C of the Indian Tax Act.


How much can you invest?

Well, there is no limit to the sum that you may invest in ELSS mutual funds. You may deposit large amounts of money into these funds. However, you will be able to receive tax deduction only for a maximum amount of 1.5 lakh rupees and no more. This is the legal upper limit that is to be followed in India.


How to Invest in ELSS mutual funds?

Investing in mutual funds takes some amount of knowledge and research. The following steps shall help guide you through the process as simple as possible.


  1. Choose a advisor

Since Mutual Fund Selection and portfolio building excersice is a difficult task You can take help of advisor who are specialist in Helping you build a Suitable Portfolio based on Your Risk Profile ,Life Goals and Priorities.Choose an Experienced Professional advisor with Proven Track Record.he will also help in choosing ELSS Funds also and map them with your goals.


  1. Select the mutual fund that suits you the best

We all look for highly efficient ELSS plans that give us the best returns but we have to figure out the purpose of investing whether we are investing for long term like retirement than we can choose Retirement ELSS Funds and if we are planning to fund other objective we can choose simple ELSS Funds.

  1. Choose the plan

There are two plans that you can avail in ELSS mutual funds, growth and dividend. The growth funds continue to accumulate returns till the time investor doesn’t withdraw whereas Dividend Plans give you a regular cash flow based on schemes.


  1. Choose How to Invest

There are two methods that shall help you invest in mutual funds and they are lump sum investments and SIP.

Now that these steps are known, you will be able to plan your taxes with ease.

SIP is a popular method of Investing Regularly small amount of Money on a monthly basis via Bank Ecs.it is an effective way of building a good portfolio with suistainable growth as it also has advantage of rupee cost averaging.

Lumpsum on other hand is one time investment as and when money is available with the investor.

Other things you must know

Before investing in ELSS mutual funds you must be aware that the lock-in period of ELSS mutual funds are 3 years and you would be able to withdraw your money only after these three years. You must also know that ELSS mutual funds can be risky as they depend on the equity market.


Why choose ELSS?

ELSS mutual funds have several benefits over PPF and FDs. Some of these benefits are-

-The lock in period is comparatively smaller when compared to other investments.

– The performance has been recorded to be a lot higher than that of PPF and FDs.

– The amount that you receive as interest is actually tax-free.


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