Taxes are levied on everything and everyone is bound to pay it within the due date or else he or she can face severe penalties or even troubles in future. But almost all of us want to give the least amount of money as tax and thus look out for several schemes and ELSS is one of them. If you want to know What is ELSS funds? Let me tell you everything I know about it.
Equity Linked Savings Schemes or ELSSELSS are a type of mutual fund investment scheme that helps one to save income tax. They are thus also called tax-saving funds. It has been stated under Section 80C of the Income Tax Act 1961. If one invests in ELSS, the person can claim a tax rebate of up to Rs 1,50,000 per year and can save an amount of Rs 46,8000 a year in taxes.
How does ELSS work?ELSS have a mandatory lock period of 3 years and the total amount of income saved at the end of the three year period is treated as a long term capital gain and is taxed at 10% if the amount is over INR 1 Lakh. One can continue to invest in ELSS even after the period is over.
Also do remember that one can redeem the ELSS investments either partially or in full after the three year period is over.
Difference between Mutual Fund and ELSSELSS is a tax saving mutual fund where one can invest like any other mutual fund but there is only one difference. ELSS is subject to a 3 years lock-in period and also offers tax exemption as per Section 80C of the Income Tax Act and hence is a bit different than an ordinary mutual fund.
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Hope you have got an idea about what is ELSS funds and some other details related to it.
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Authors Of The Question
What is ELSS?
Ritesh Singhania
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2 Year
2022-05-17T16:55:52+00:00 2022-06-01T14:09:20+00:00Comment
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