Usually, equity investors tend to be cautious about losing money in the market. On the contrary, smart investors are cautious about saving their money and investing them with a long-term perspective. ELSS mutual funds are ideal for investors wishing to save tax. ELSS is a mutual fund scheme which invests most of its corpus in the equity or equity-linked products.

One could invest in online tax saving schemes such as equity-linked savings scheme by visiting a fund house’s website or from AMC websites, broker platforms or from another aggregator/online marketplace. The main purpose of ELSS or equity-linked savings scheme is helping individuals in availing income tax deductions under Section 80C along with continued growth of fund. Fundamentally, equity investments are subjected to market risk. However, since these funds invest money in equity, one has chances of better returns along with tax exemption.

ELSS - Equity Linked Savings Scheme

ELSS is best recommended for individuals who are starting their career. When earnings are modest, no one would like to go for high risks and hence, it’s best suited to beginners. However, in the same way, for people earning good but don’t like putting all the eggs in one basket, equity-linked savings scheme is good too. Hence, there aren’t any specific stages where ELSS is the best investment option. ELSS suits everyone wishing to earn good returns and simultaneously saving taxes too.

In a nutshell, it’s not wrong to say that ELSS is one of the best investment tools for everyone for the distinct benefits which it offers to the investors. It’s a smart way of using one’s savings for financial growth and tax exemption at the same time. If the investments are done properly under the instructions of experienced professionals or aggregators which are available online, one could easily build a good portfolio by including good performing ELSS mutual funds.

ELSS schemes also allow you to do systematic investment with as low as INR 500/month. Your savings would turn into investments. This inculcates the habit of saving and investing continuously. Since there is a 3-year lock-in period, if you begin your SIP in ELSS, the returns for the SIP amounts would be generated every month after the lock-in period of 3 years. SIP in ELSS allows an investor to average his investments. Moreover, there’s no additional taxation on the SIP. SIP doesn’t burden the wallet by offering the option to invest in small amounts rather than investing a lump sum.

It typically takes 1-2 working days for investment to complete. Also, there are few specific nuances involved with the process and knowing them in advance would make the experience of investing in online tax saving schemes better. For instance, any fund house or an online marketplace like will assist you in choosing the fund of your choice and making your journey of investment an easy, quick and empowering one.

Before picking the online tax saving schemes, you must keep in mind that you shouldn’t invest your money in something just for saving tax at the last hour. Make sure your investments are in sync with the financial plans -you wouldn’t want to end up with a worthless investment, right?

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May 2021