Here�s Why You Need the Best ELSS Mutual Fund in 2019

Equity Linked Saving Schemes (ELSS) have emerged as a popular investing option in India over the past few years. While most investors choose to invest in ELSS for their tax benefits, others know quite well why it is one of the best investing options. An ELSS is a kind of mutual fund, in which a major portion of the corpus is invested in equity-related products.

Here are some important reasons why you should consider investing in the best ELSS mutual fund in 2019.

1. You can get huge tax benefits

Most people invest in ELSS to save on taxes. Under Section 80C of the Income Tax Act of 1961, investments made in ELSS are exempt from taxation. With ELSS investments, you can get tax deductions of up to ?1,50,000 on your taxable income.

2. ELSS offer the lowest lock-in period

Generally, almost all tax-saving investment instruments have a minimum lock-in period of five years. For instance, a pension fund has a lock in period of 15 years, while fixed deposits have a lock-in period of five years. However, ELSS has only 3 years of lock-in period. With ELSS, you need to invest only for 3 years and this inculcates a good habit of saving.

3. It provides higher returns

Although you need to invest for 3 years in an ELSS, you can also extend the period of investment. With the lowest lock-in period, you gain higher returns and a higher possibility of continuous growth. You can gain up to 15% to 20% returns, which is higher than any other mutual fund investment. Moreover, it provides investors the benefit of compounding.

4. ELSS is a transparent and secure investing option

People might hesitate to invest in mutual funds, since they are subject to market risks. However, ELSS aim at both saving and investment. While savings can get you up to 8% returns, investing in equity funds may provide higher returns. Also, it is a safe and transparent investment option, since all ELSS providers are required to make the key disclosures, if they come under SEBI. 

Other than the above stated benefits, ELSS also come with Systematic Investment Plan (SIP) options. This helps salaried individuals invest a fixed amount of their income regularly. Although ELSS offer multiple benefits, it is advisable to research well and learn all you can about a scheme to make an informed investment decision.

About This Author

Shaheen Shaikh http://www.adrclinic.co.uk Joined: April 29th, 2018