Disclaimer : Mutual Fund investments are subject to market risks. Take an expert's advice before investing.
DISCOVER ELSS AND ITS ADVANTAGES
What is ELSS?
ELSS is a diversified Equity Mutual Fund that qualifies for tax exemptions under Section 80C of the Indian Income Tax Act, 1961. It allows you to reduce your taxable income by up to ₹ 1.50 lakh.
Advantages of ELSS
- Lowest lock-in of 3 years
- Save up to ₹ 45,000/- (plus applicable cess) depending on your tax slab
- Attractive equity returns over long-term
- Invest in small portions monthly / quarterly through SIP
- There is no age bar to invest in ELSS
| How much tax can you save in ELSS? | ||
|---|---|---|
| Your current tax slab | Tax you can save under Sec 80C | |
| 30% | ₹ 46,350/- | |
| 20% | ₹ 30,900/- | |
| 10% | ₹ 15,450/- | |
Though ELSS has the lowest lock-in period of 3 years among the tax-saving options available under Section 80C, it doesn’t mean you should invest with a view of 3 years in mind. Since they are equity mutual funds, you should invest in them with a time horizon of above 5 years, as it may go through some short-term volatility. Ideally you should make them a part of your financial plan to achieve your long-term goals like retirement, child’s future needs etc.
| Average Returns of SEBI ELSS (Tax Saver) Funds. | ||||
|---|---|---|---|---|
| Category Name | 3 Years | 5 Years | 7 Years | 10 Years |
| Equity: ELSS | 18.37% | 16.52% | 12.55% | 17.10% |
| Disclaimer: Mutual fund investments are subject to market risks, Take an expert's advice before investing | ||||
4 Reasons to Choose Ara Financial Services
Professionalism
We value your time & trust. We maintain high service standards and provide equal attention to all our clients. And you will find the entire team at Ara displaying this quality.
Integrity
We operate in the most transparent manner possible. The Investments products that we recommend are strictly based on the suitability of our clients’ investment objective.
Knowledge
Our eagerness and hunger for knowledge always keeps us on the edge and helps us to deliver the best to our clients. We invest considerable time in acquiring knowledge and keep our clients updated.
Simplicity
We believe in making the investment journey of our clients simple and pleasant. Our knowledge, processes and hand holding reflects it all.
Ganesh KG
Success Manager at an IT company
Ara is literally a one-stop-shop for all your financial planning needs! My friend and advisor Pratik is tremendously knowledgeable in every aspect of financial planning / investments. Be it long term or short term, Ara was able to guide me and help me plan my investments based on my requirements and income. Apart from being our personal financial advisors, Ara very promptly keeps us updated about any changes we need to be aware of and periodic personalized statements helps us keep a track of our investments.
Mou SenRoy
SR HR Lead in an IT Company
Well I have been investing through Ara for few years and I would say that this has been always a hassle free journey with them. Timely updates, monthly statements/reports, current market updates as well as a great advisory whenever I had reached out to seek inputs for current or additional investment plans. There inputs are valuable and at par to the current market. I am very happy and satisfied with the way they have been professionally catering our requirements and their efforts are commendable.
Frequently Asked Questions
How much should I invest in mutual fund ELSS to save tax?
You can invest up to ₹ 1.5 lakh in ELSS per financial year for tax saving purposes. Ideally, you need to calculate the gap after calculating the EPF deduction and any other investment for the financial year that qualifies under Section 80C of the Income Tax Act to arrive at the additional amount to be invested.
What is the lock-in period for ELSS tax saving?
The lock-in period for ELSS mutual fund is three years from the date of investment. In the case of monthly SIP Investments, the period of three years gets calculated separately for each monthly SIP Investment.
Can I withdraw the investment before the lock-in period ends?
No. The option of withdrawal before the end of lock-in period isn't available.
What is the risk involved in ELSS Funds?
ELSS funds invest in Equity Markets. Returns from equity investments are subject to market risks. Like any other equity funds, one need to invest in ELSS with a long-term view (minimum 5 years) to get the best out of it.
Is there any tax during withdrawal?
Long-Term Capital Gains (LTCG) tax is applicable on withdrawal from ELSS funds after the lock-in period of 3 years. As per the prevailing tax laws, gains of up to 1 lakh rupees in a financial year are tax-free. Gains over 1 lakh rupees are taxed at 10%.
I’ve never invested before. Is an ELSS fund a good way to start?
It would be natural for someone who has just started to earn and has never invested in equities before to get nervous about the ups and downs of the stock markets. Yes, equities are volatile; but they’re volatile in the short term, and ELSS funds are not short-term investments. Equity markets tend to be less volatile if one stays invested for longer periods, ideally greater than 5 years. For most 3–5-year periods, the best ELSS funds have managed to deliver lucrative returns.
So, what’s the best way to start investing in ELSS?
First-time investors need to complete a one-time KYC to start investing in mutual funds. You need is a PAN card and an address proof. All you need to do is just fill in your details in this enquiry form, and one of our team members will get back to you with the next steps to start your investment.
ARA can help you make prudent financial investment decisions – Contact us today
ARA Financial Service Pvt.Ltd
AMFI - Registered Mutual Fund Distributor | ARN - 76035
Bangalore
S-05, Concourse,
Lower Ground Floor,
ITPB, Whitefield,
Bengaluru – 560066
Ujire
Shop No. 2-3/11,
Sankarshana Commercial
Complex, Main road,
Ujire – 574240
Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in future