I have invested in ELSS (Equity Linked Saving Schemes) funds as it is a perfect way to save taxes in comparison with other investment options available under the Income Tax Act, 1961 (Section 80C). ELSS comes with the benefits of professional fund management and a shorter lock-in period, which leads to wealth accumulation. Let me tell you about the ELSS tax saving benefits in this answer:
Experienced finance professionals known as fund managers manage ELSS mutual funds. They are provided by almost every fund house in our country. ELSS mutual funds are the only type of mutual funds that are eligible for tax deductions.
A person can save up to Rs 46800 (tax deductions of a maximum of Rs 1.5 lacs) a year in taxes if they invest in ELSS covered under the Income Tax Act, 1961 (Section 80C). However, you can invest more than this chosen amount, but the amount over Rs 1,50,000 won’t qualify you to avail the tax benefits as per Section 80C’s provisions. The returns generated from ELSS are taxable with the DDT (dividend distribution tax) and taxes on LTCG (Long-term Capital Gains).
Now you know how much tax can be saved in ELSS.
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Types of ELSSThere are mainly two types: Growth funds and Dividend funds
Dividend PayoutIt has 2 sub-categories:
Dividend Payout: Under this, you’ll receive tax-free dividends
Dividend Reinvestment: Under this, your dividends will be reinvested as a new investment.
It is a long-term wealth creation platform for people where the fund’s full value is realised at the redemption’s time.
Now you know how much tax does ELSS save.
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Read more:
How to save tax for salaried employee?
How to save tax on salary?
How to save tax apart from 80C?
How to save tax on home loan?
I hope you liked my answer on ELSS tax saving benefits.
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Authors Of The Question
How much tax can be saved in ELSS?
Ratan
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2 Year
2022-06-14T18:42:58+00:00 2022-06-14T19:08:19+00:00Comment
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