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Mutual Funds | 06 Jan 2020

5 Advantages Of ELSS Mutual Funds

Financial planning is extremely important, and in modern times, it has become an essential requirement. Regardless of how much money you earn, saving and investing are significant steps to achieving your financial objectives and goals in life. ELSS (Equity Linked Savings Schemes) is an ideal scheme for you to save taxes and gradually create wealth as well. When it comes to investments, an investor would definitely go for the best option available. If you consult a mutual fund advisor in Aurangabad or any other city, you will get to understand these funds better and learn about their various aspects. There are multiple advantages that ELSS mutual funds offer to the investors, find some of them listed below -

A chance to invest in equity while saving -

ELSS helps you to monitor the growth cycle of your ELSS portfolio with the advantages of equity mutual funds schemes. While savings are able to generate about 8% of returns, equity investments can generate higher returns in favorable stock circumstances. A strong portfolio of quality stocks will generate higher yields in a growing economy like India.

Develops a habit of saving money -

The ELSS schemes allow you to invest with amounts as low as Rs. 500 per month systematically. With ELSS funds, your savings can successfully turn into investments, and for longstanding benefits, you can prolong your investment as well. This whole process instills the habit of saving and brings a lot of discipline to your financial life as well.

Long term value growth -

The lock-in period of ELSS is normally three years, but still, you can extend your fund's continuous growth or redeem it after three years as well. Capital investments are potentially subject to market risk. And, because these funds invest your money, you have potential chances of higher returns along with tax exemption.

Tax benefits -

Saving tax is one of the most significant advantages ELSS funds offer to an investor. ELSS investment provides tax benefits as per the 1961 Income Tax Act, under section 80C. Nevertheless, the shareholder is exempt from tax on the income of any dividend or longer-term capital gains. To decrease your tax liability, you can invest in ELSS mutual funds and save up to INR 1,50,000/- from your taxable income.

Lock-in period -

Good mutual fund portfolios are built for long-term investments, but they are not constrained by the periods of lock-in. However, the money is locked into a minimum of three years in the case of ELSS funds. In other terms, you have to remain invested for three years or more at the ELSS Fund to exclude you from return-related income.

So, if you are looking for an excellent investment option, you must consider ELSS funds seriously. In the fast-paced life today, paying attention to our future plans and targets holds the utmost significance. If you want to go ahead and begin your investment journey with ELSS funds, it is highly recommended that you get in touch with a financial advisor in Pune or any other city. Financial experts will guide you through the entire process and will help you understand everything about ELSS as well.

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