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ELSS Tax Saving Funds
At a Glance
At DBS Treasures, you can invest in Equity-linked Savings Schemes and get a tax benefit under section 80C of the Income Tax Act.
Under an ELSS, your funds are handled by fund managers and also have tax benefits. Under Section 80C of the Income Tax Act, you can invest up to Rs. 1.5 lakh in a financial year for tax benefits.
Things to remember
- You can invest any amount in ELSS, but only up to Rs. 1.5 lakh will be exempt under the Income Tax Act under Section 80C.
- An excellent investment option that can offer both high returns as well as a tax-saving option.
- Long-term capital gains on ELSS are tax-exempt up to Rs. 1 lakh if held for greater than 1 year.
- If you finish your three-year lock-in period, you have two options: continue investing or withdraw the amount.
- You may be taking a higher risk by investing in ELSS compared to other tax-saving instruments, but you can expect higher returns.
- While ELSS has the ability to give you higher returns, you need to be realistic about your expectations. In case you want better returns, you need to stay invested for a longer period of time.
How to Apply
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Frequently Asked Questions
- An opportunity to compound money
- Tax-free long-term capital gains up to Rs. 1 lakh
- Three-year lock-in period compared to longer lock-in period in other tax-saving instruments
- Ability to invest through SIPs
While you can invest a lumpsum amount, it’s always advisable to invest in SIPs, as investing in a SIP gives you an advantage of rupee cost averaging, as well as reduces the stress of arranging a huge sum at one go to save tax.
Anyone who wishes to reduce income tax payment by investing under Section 80C of the Income Tax Act. However, it's advisable to invest in ELSS only if you are open to risk.