Is tax planning a tedious and hectic job for you? Tax planning can more efficiently help you to save your hard earned money. You can put money in selection of traditional tax savings instruments, which are safer than other instruments such as Mutual Funds. But, did you know, you can also save tax by investing in ELSS funds, Equity Linked Savings Schemes that comes tagged with bundle of lucrative benefits.
What is ELSS?
Simply put, ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act and offers the twin advantage of capital appreciation and tax benefits. It comes with a lock-in period of three years.
Why should one invest in an ELSS?
ELSS funds are one of the best avenues to save tax under Section 80C. This is because along with the tax deduction, the investor also gets the potential upside of investing in the equity markets. Also, no tax is levied on the long-term capital gains from these funds. Moreover, compared to other tax saving options, ELSS has the shortest lock-in period of three years.