Equity Linked Saving Scheme, which is also known by the acronym ELSS, refers to a diversified Equity Mutual Fund, which not only renders one with an ability to save tax, but furnishes them with a probability to increase their wealth as well. Under 80C investment section of the Indian Income Tax Act, ELSS entities an individual and HUF with 1.5 lakhs amount from tax exclusion. ELSS funds are perfect for those who’re looking for long term wealth creation by investing in Equities.

Advantages of ELSS:

MINIMUM LOCK-IN DURATION – ELSS funds, unlike the conventional investment schemes such as NSC and PPF under the 80C investment section of the Indian income tax act, comes with a reduced lock-in period of three years, post which one is allowed to withdraw the whole sum.

INCOME TAX ADVANTAGE – Going by the 80C section of the income tax act, a deposit in ELSS funds enjoys a deduction from your income upto Inr 1.50 Lakhs.

TAX EFFICIENT – Tax on ELSS Funds, being Equity Funds, henceforth shall only be 10% per annum as against marginal rate of Tax in FD’s, NSC etc.

DIVIDEND OPTIONS – ELSS funds are also available with dividend choices in which an investor can procure the dividends even during the lock-in spell.

FLEXIBILITY – You also have investment option availability of making either a lump sum or SIP investment.

PROBABILITIES OF INCREASED RETURNS – A substantial portion of money is ploughed in equity by the ELSS funds that regardless of the short-term volatility possess the capacity of increasing wealth in the long run, as compared to other tax saving options available such as PPF,NSC, FD’s etc