It is last few days to save tax. It’s time to submit investment proof, please do not confuse yourself with wrong choice of Investments. I would recommend ELSS as tax saving instrument because of following reasons-
Lowest lock-in period
When you make any investment, the next thought is how and when you will be able to redeem it. With the lowest lock-in period of three years, ELSS funds do better than fixed deposits (FDs), public provident fund or national savings certificates that have a lock-in period of 5-15 years.
With ELSS funds, it is two birds in one stone compared with other schemes in Section 80C of the Income Tax Act. Investing small amounts in every scheme will help you save on taxes, but no more. Conventional savings schemes will only save your money and pay you an interest when you withdraw your money. Invest a small amount every month in ELSS funds through a systematic investment plan (SIP) and watch your money grow regularly. Simultaneously, you will be able to reduce your tax bill by Rs. 15,450, Rs. 30,900, or 46,350, depending whether you are in the 10%, 20% and 30% tax slab, respectively.
As seen earlier, conventional savings schemes just save your money and pay you some interest at the end of the tenure. What’s more, you have to pay tax on this interest you earn. With ELSS funds, be tax-free. When you redeem ELSS fund, the money is all yours. All investments in equity are tax-free if you hold on to them for a year. And an ELSS fund holds your money for three years.
In my early days, I stayed away from ELSS funds as I thought I would need huge money. So untrue! You can start investing in an ELSS with as little as Rs. 500 via a systematic investment plan (SIP) that will deduct a fixed amount from your bank account every month.
Of course, there aren’t any guaranteed returns in ELSS as they’re linked to the stock market, but if you’re looking to pay less tax and grow your money as well, ELSS is the best choice for you!
For getting analysis of various tax saving funds. Call 98678 35465 or write to [email protected]