The first thought that dawns on us as soon as we start earning is tax-saving. If we fall under the tax slab, then we try to take the tax rebate that is applicable to us under our slab. But, various questions are linked to the taxation policy. Where to invest to save tax? How much should I invest? Which schemes fall under the tax saving category? Are mutual funds tax-free? The answer to all your questions is Equity Linked Saving Scheme (ELSS). MySIPonline brings to your doorstep the best of the ELSS schemes. You can select from our chart-buster schemes to save tax.

What is ELSS?

An ELSS is a type of mutual fund specifically designed to provide tax relaxation under the Section 80C of the Income Tax Act. There is a minimum lock-in period of 3 years in an ELSS scheme. The lock-in period implies that you will have to keep your money invested in an ELSS mutual fund for at least a minimum period of three years. Along with the tax saving feature ELSS, mutual fund provided the benefit of capital appreciation also. Therefore, ELSS is good from the viewpoint of both growth and tax saving. An ELSS is the best scheme for the clients who are new to investment and also for the investors whose annual income is more than 2.5 lakhs annually.

There are a lot of companies providing ELSS scheme; you can compare different schemes on MySIPonline and then select the one which suits your requirements.

“ELSS has emerged as the best tax saving option as compared to its other competitors like PPF. The reason is dual benefits of growth and tax rebate”, conveys our expert team. It is true that ELSS mutual fund provides better options for investing than the other tax saving schemes sponsored even by the government.

PPF (Personal Provident Fund) v/s ELSS

The PPF is a government sponsored scheme. It has a minimum lock-in period of 15 years with a maximum investment limit of Rs. 1 lakh (maximum) yearly. The amount cannot be withdrawn before the maturity period, but a loan can be opted on this sum. In contrast, to it, ELSS mutual fund carries a lock-in period of only three years. The maximum amount that can be invested in ELSS scheme annually is Rs. 1.5 lakh. The amount can be withdrawn from the plan after the period of 3 years expires. Along with the other benefits ELSS provides an additional benefit of the dividend. If the client has opted for the dividend, he gets it during the term of three years whenever the dividend is declared. Thus, in every aspect ELSS, mutual fund is the best option available under tax saving schemes.