Benefits Of Investing in ELSS Fund

If we talk about the investing arena, it involves deep research, and one must look for benefits as well when they invest in a particular fund. One such fund is called the elss fund which is called the Equity Linked Savings Scheme. It is a special category of mutual funds designed to combine wealth-building benefits with tax benefits. These are the special types of funds that aim to promote long-term equity investing and have a unique three-year lock-in period that sets them apart from other tax-saving instruments. As we go further in this article, we will discuss why investing in an ELSS fund is a good idea.

Tax benefits

Investing in ELSS funds offers numerous benefits and what sets them apart is the tax benefits that they offer. Investment in ELSS funds offers significant tax benefits under Section 80C of the Income Tax Act. An investor can get a tax benefit of up to Rs 1.5 lakh by investing in an Equity linked savings scheme (ELSS). This is what makes it a popular fund to invest in. Moreover, the tax exemption benefit is quite appealing to investors and that is why you will find more and more people investing here.

Higher returns

Whether you are a beginner investor or a pro-investor, you will look for a fund that will allow you to have higher returns. Isn’t that the truth, though? Investors often prioritise higher returns funds. It should be noted that since ELSS funds invest in equity schemes, they offer higher returns (15-20%) compared to other tax saving options (usually 7-10%). And it is no wonder, with such returns in the picture, investors are keen on investing in the ELSS funds. Although it might be risky, if you want to expect such higher returns, you need to take this risk. In addition, ELSS typically offers returns in the range of 15-20%.

Short lock-in period

We also have one special advantage of investing in ELSS funds which sets them apart. If we talk about the other funds or schemes, they generally have longer lock-in periods, such as the Public Provident Fund (PPF)’s 15-year lock-in period. However, when it comes to ELSS, it provides flexibility to investors. After three years, investors are free to make a choice. They can redeem or continue if they are happy with their financial goals. It helps them to take full advantage of the market opportunities that they come across without having to confide in longer commitments for so many years. This is what sets them apart from other funds or schemes.

Conclusion

In conclusion, investing requires a deep and thorough search and with practice and skills one becomes a pro. Here in this article, we have discussed the benefits of investing in ELSS funds. If you are someone looking for a partner who will guide and help you throughout your investing arena, 5paisa is your saviour! With them, you can easily invest in funds like nippon india tax saver fund, with their guidance, you are all set to look for funds that are worth investing in.