Of all the investment options that save money on taxes, Equity Linked Savings Schemes or ELSS Funds are especially desirable because they provide both a tax benefit and the possibility of building wealth. Investors look for a consistent return, tax savings, wealth creation, and consistency in return on investment opportunities.

Investors can contact us at 7838077767 if they would like to do tax planning and are searching for funds that save taxes.

Features of ELSS Funds

Some essential features of ELSS funds are as follows:

• At least 80% of the total corpus that can be invested is made up of equity and equity-related instruments.
• Investing in a variety of market capitalizations, industries, and themes, the fund offers diversified equity opportunities.
• There is, however, a three-year lock-in period.
• According to Income Tax Act Section 80C, the invested amount is free from taxes.
• Income is treated like long-term capital gains and is governed by the current tax laws.

How Does ELSS Funds Work?

There are numerous equity funds available in the Equity Linked Savings Plan. Stocks of publicly traded companies make up the majority of these funds' assets. Large, mid, and small-cap stocks are among the many industries and market capitalizations from which the stocks are chosen. Capital appreciation maximization is the long-term objective of these funds. The fund manager selects stocks to offer the best risk-adjusted returns on the portfolio after conducting in-depth market research.

What are the Tax Benefits of ELSS funds?

Investing in an ELSS fund offers tax advantages under Section 80C of the Income Tax Act of 1961. The total amount that can be invested is not limited to Rs. 1.5 lakh in tax deductions are allowed under the IT Act. Contributions to an ELSS can lower an individual's yearly tax liability by as much as ₹46,800.

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What are the best ELSS Funds investments for 2024?

If you would like to invest, here is a list of the top ELSS funds.

• UTI ELSS Tax Saver Fund
• Bank of India ELSS Tax Saver
• Baroda BNP Paribas ELSS Fund
• Sundaram ELSS Tax Saver Fund
• Tata ELSS Tax Saver Fund

What are the Risks and Considerations of ELSS Funds?

Market Risks

Variations in the market can affect ELSS funds. Investment values are subject to change based on how the equity markets perform.

Exit Load

Some funds may charge exit loads if a redemption is made before a certain amount of time expires. Investment professionals should be aware of the fund's exit load structure.

Tax Implications

A capital gains tax is applied to the returns, even though investments in ELSS have tax advantages.

Final thoughts!

ELSS Funds are designed to save taxes and come with a unique three-year lock-in period. In addition to introducing investors to the equity market, they may provide tax advantages. However, it is always advised to understand the risks and considerations before investing.

To take advantage of the most outstanding ELSS funds, they can contact us at 7838077767 before including ELSS funds in their portfolio.

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