The saying “Money cannot buy everything” is partly true. The current situation is one in which all materialistic items require money. Only those items that are truly priceless will be able to keep the above statement true. Money is the only thing that can bring happiness and peace of mind. It’s not surprising that we all spend large amounts of money to purchase what we need. Because we work hard to earn it, the money we spend on things that do not give us value or worth is of great importance. The same holds true for taxes. We don’t want to waste our hard-earned money on taxes, especially when there are better ways to save it.
What can you do to save taxes on your income? How can you save income taxes? ELSS (Equity Linked Savings Scheme) is the best way to save income taxes. These equity mutual funds provide tax savings under section 80C. They can save taxes up to Rs.1,50,000 This is not just a saver but also an income booster. You heard it! The ELSS is an equity investment plan that can greatly increase the income of investors. To build long-term wealth, it has invested the pooled capital from investors in securities and stocks of different companies. Let’s now examine all elements of the ELSS mutual fund and why you should invest in them.
- Minimum Lock-In Period – ELS funds are not the only investments that provide tax savings under Section 80C. There are many other options, such as the National Pension Scheme, Public Provident Fund and Life Insurance Policy. The best thing about this fund is its three-year lock-in period. This is a significant advantage over other options. This means that you only need to lock your investment for 3 years, and then you can redeem the capital as needed.
- Section 80C Deduction This mutual fund has the greatest advantage. This mutual fund allows for a maximum income deduction of Rs.1,50,000, which reduces tax liability. This deduction is allowed by Section 80C under the Income Tax Act 1961.
- Growth & Distribution Options – There are two ways to invest in ELSS funds: the dividend and the growth. You can choose from any of the two options. Dividend funds pay dividends on shares while growth options tend to create wealth without paying dividends.
- Large-Yielding Capacity These funds’ performance is directly related to market movements. The stock value of companies is increased when the market moves higher. This means that ELSS funds are also affected by the market. These schemes offer exceptional returns, so it is worth making an investment.
- There is no maximum investment limit – The ELSS programs have no cap on capital. This allows you to achieve financial goals and enjoy tremendous growth.
- Minimum investment with Rs.500 – You read that right! You can still invest in the ELSS plans even if your income is low. The minimum amount you must put in is Rs.500.
- Creates a Saving Habit – Regular savings are also available with ELSS mutual funds. An SIP can be easily started with a specific amount, which will help you build a regular savings habit.
The equity-linked savings plan allows you to achieve multiple financial goals with one investment. ELSS funds can help you save taxes and make money. Get started investing today to reach your goals.