The funds that can bring you benefits of tax saving also
For those who fall in the bracket of paying income tax, it becomes big trouble to find different options that can help to save tax. The tax slabs in the country are high, and many times one feels that he needs to save tax as takes away a major component of his earnings. In such a case, one can find various options that are approved by the government to save income tax. Among all such tools, the ELSS can be considered as one of the tools worth investing in. It is known as the Equity-linked saving scheme with the help of which the amount is invested in the market via a mutual fund by a particular Asset Management Company.
In the market, one can find several companies dealing in mutual funds which can help one save the income tax up to 150000 under section 80C. However, one needs to understand certain facts about this tool and invest in it only after proper knowledge. Those who do not know about this tax-saving option in the market can check with some of the companies and know about different ELSS funds. In the present mutual fund market, there is hardly any company that does not deal in ELSS.
What is ELSS?
As per the income tax act, the ELSS is a tool approved by the government where an investor can have an exemption to the amount invested in ELSS up to the limit of 150000 per annum. This provision is made under section 80C, and one who invests in this option cannot withdraw the amount for the next three years. Hence it is an option though seems lucrative one, it needs to be used wisely.
In ELSS also one can find several options when it comes to investing. One can invest in this fund in a single shot or instalment. There are also funds that invest the amount in the shares of the listed companies. The market may go up and down during the tenure of the investment in ELSS funds but with the increase in the market the unit value gets increased, and one can have a good rate of return after three years.
The process for investment in ELSS:
Those who are interested in investing in ELSS, it is important to know the investment process here. The investor can opt for any of the options such as online or offline. The companies in the market offer an online option where the process is self-explanatory and easy to enrol. One needs to provide a few of the documents such as ID proof, PAN card and also an Address proof as well as a cancelled cheque for the bank details of the investor. After providing the documents, one can go for the online fund transfer to the concerned AMC, and the amount gets invested in the market. The investor is also provided with a folio number as well as a statement. One can also get to a broker or agent who deals in a mutual fund to invest in it in an offline mode.