Tax Saving Mutual Funds, also known as Equity Linked Saving Scheme (ELSS), is a mutual fund scheme that invests in equity-linked bonds.
- Save as much as ₹46,800 in tax saving funds.
- In the last three years, the average return is about 15% better than fixed deposits or PPF.
- The locking period is three years only.
- Invest in these funds up to Rs 1,50,000 as per Sec 80C C
Benefits of investing in tax saving mutual funds
A diversified mutual equity fund is an equity-linked saving scheme (ELSS). It invests your cash in the company’s equity shares through market capitalization, i.e., large-cap / mid-cap / small-cap. Such diversification allows you to navigate through turbulent markets and maintain your yield to your expectations.
Lowest Lock-in period- ELSS has the shortest lock-in period of 3 years compared to other tax-saving options. Being an equity fund, it would be appropriate to stay invested for a more extended period.
Best Tax Saving Investment Under 80C – This enables you to use tax deduction in EEE format under Section 80C, namely tax exemption, accumulation of assets and zero exit charges.
Monthly Investment Options – By using a SIP of less than Rs 1000, you can start investing. Also, there is no upper limit on the investment amount.
Higher returns than FD / PPF – Compared to standard FDs, ELSS offers higher returns to beat inflation efficiently.
Comparison with other tax-saving investments
Many different savings schemes are available, which help in some money development like FD, PPF and NSC. But the yield of these schemes is taxable. It is where ELSS (Tax Saving Mutual Fund) stands out with its dual benefits – typically higher yields and tax-free returns. It is combined with a lock-in period of just three years, which you are now investing in ELSS (Tax Saving Mutual Fund). Here’s a quick look at how ELSS is superior to other tax-saving investments that are often used: –
5-Year Bank Fixed Deposit- Return is 6% to 7%, Lock-in Period is five years and it is a tax on the return.
Public Provident Fund (PPF) – return is 7% to 8%, Lock-in Period is 15 years and no tax on the return.
National Savings Certificate (NSC) – return is 7% to 8%, Lock-in Period is five years and it is a tax on the return.
National Pension System (NPS) – return is 8% to 10%, Lock-in Period is till retirement and partially taxable.
ELSS Funds – return is 15% to 18%, Lock-inn Period is three years and partially taxable.
As a tax-paying citizen, the Indian Tax Act Section-80 allows you to take a little breather – a deduction of up to Rs. 1, 50,000 from your total annual income.
Why invest in a tax-saving fund with Cleartex
Easy to invest- It is easy to invest in the highest performing mutual fund.
Easy to track – It is easy to track your investments or monitor them 24/7
Easy to withdraw – Easy to withdraw at any time with 1-click without any required documentation
Paperless Signup – Sign up online, finish your KYC and invest in 10 minutes online.
Bank protection – Bank hierarchical security Data security is the bank’s priority and all of you are entirely safe.
Proof of investment for HR – Get instant confirmation of your 80C investment and send it to HR.