How much should I invest in ELSS to save tax?

How is ELSS tax calculated?

So this investor investing an amount of Rs 1.5 lakhs in ELSS will now have to pay a tax on the gains above Rs 1 lakh. His total gain is Rs 1.5 lakhs, out of which, after removing Rs 1 lakh, we are left with Rs 50,000. 10% tax of this is to be calculated. 10% of Rs 50,000 is Rs 5000.

Should I invest all my money in ELSS?

If you have a high risk appetite and investing for a long period of a five to seven years, you may consider investing in ELSS funds. However, if you do not have the necessary risk appetite and want safer options that offer assured returns, you should stick to government-backed PPF, NSC, tax-saving 5-year bank FD, etc.

Which ELSS should I invest in 2021?

List of Top ELSS Funds to Invest in 2021

  • Mirae Asset Tax Saver Fund.
  • Canara Robeco Equity Taxsaver fund.
  • DSP Tax Saver Fund.
  • Axis Long Term Equity Fund.
  • ICICI Prudential Long Term Equity Fund Tax Saving.
  • SBI Magnum Long Term Equity Scheme.
  • BNP Paribas Long Term Equity Fund.

How does investing save tax in ELSS?

ELSS (Tax Saving Mutual Funds)

THIS IS INTERESTING:  Do dividends affect cash flow?

Equity Linked Saving Scheme (ELSS) or a tax saving mutual fund schemes helps investors to save taxes under Section 80C of the Income Tax Act 1961. The investments in ELSS are subject to a lock-in period of 3 years and qualify for a tax deduction of up to Rs 1.5 lakh.

Can I withdraw ELSS after 3 years?

You always have the option of investing in Public Provident Funds or Fixed Deposits if you want to reduce your taxable income. … An ELSS investment has a lock-in period of just 3 years, which means that you can withdraw your funds from the scheme after the three year term of your investment is completed.

How can I reduce my taxable income in India?

Here’s a list of popular investment options to save tax under section 80C.

  1. Public Provident Fund.
  2. National Pension Scheme.
  3. Premium Paid for Life Insurance policy.
  4. National Savings Certificate.
  5. Equity Linked Savings Scheme.
  6. Home loan’s principal amount.
  7. Fixed deposit for a duration of five years.
  8. Sukanya Samariddhi account.

Are ELSS high risk?

ELSS is the only kind of mutual funds covered under Section 80C of the Income Tax Act, 1961. ELSS funds have the shortest lock-in period among all Section 80C options. Nevertheless, it offers better scope for long-term wealth creation, people with more risk tolerance favour it.

How do I redeem my ELSS after 3 years?

If you have made your ELSS Mutual Fund investment via the lump sum route, i.e., at one go, all your units will be allotted on the same day. And therefore, once the 3 year lock-in period is over, you can redeem your entire ELSS investment in one go.

THIS IS INTERESTING:  Frequent question: What is the minimum amount to invest in mutual funds?

How do I get ELSS investment proof?

Investment Proof: You can get investment proof for mutual fund investments by getting your statements from your distributor. Alternatively you can get a consolidated email statement for all your mutual fund investments, including your ELSS funds emailed to your inbox.

Who should invest in ELSS funds?

Any individual or HUF looking to save up to Rs 46,800 a year on taxes can consider investing in ELSS. However, these funds are suitable only for those who are willing to take some risk and can stay invested for at least the mandatory lock-in period of three years should invest in ELSS.