INCOME TAX All about the Equity Linked Savings Scheme & its Returns

All about the Equity Linked Savings Scheme & its Returns

All about the Equity Linked Savings Scheme & its Returns

5 Golden Tips to Maximise ELSS Fund Returns

ELSS or Equity Linked Savings Scheme is a type of diversified equity-oriented scheme which comes with a lock-in period of 3 years. By investing in this type of scheme, one will get tax exemptions u/s 80C of the IT Act 1961. A key interesting feature of this investment scheme is that it has the shortest lock-in period among all the other tax-saving instruments.

In this blog, we will walk you through 5 golden tips on how to maximise ELSS fund returns while highlighting more such interesting features associated with the scheme.

What Are the 5 Tips to Increase ELSS Fund Returns?

Predicting ELSS returns can be a bit difficult for an individual as it is closely linked to the market. However, there are a few tips which one can consider for increasing their ELSS fund returns rate. Keep reading to discover these 5 golden strategies.

  1. You must make use of its short lock-in period of 3 years. In comparison to other tax-saving options, equity-linked savings schemes provide higher returns. Besides, you can choose to invest in such a scheme as part of your tax planning management.
  2. One looking for a long-term savings scheme opts for SIP in an ELSS. After completing the lock-in period of three years, you can start SWP (Systematic Withdrawal Plan). You can change the withdrawal plan from one ELSS scheme to another.
  3. One must try to invest in the best ELSS mutual fund to benefit from maximum returns. You must note that these returns are based on less than 5 to 10 years of historical data on previous track records and the expertise of the fund manager.
  4. You must opt for ELSS to avail the tax benefits. If you invest ₹1,50,000 in an ELSS fund, there will be a tax exemption. Among the other mutual fund schemes, it is the only scheme which enables investors to save tax along with getting higher returns.
  5. One can align their equity-linked savings scheme with their mid-financial goals because this way you can maximise your profits. An investor should plan their investment strategy plans as per their future financial goals and needs.

How to Use an ELSS Calculator?

One can use  ELSS calculators free of cost and as many times as they want to get an estimated value of their investment. This online financial tool will provide you with quick and precise outputs in return, once you set minimal inputs. Refer to the below step-by-step guidelines on how you easily use this online tool.

Step 1: Navigate and open an online ‘ELSS Calculator’ tool.

Step 2: Adjust the slider to set the monthly instalment amount.

Step 3: Enter the expected rate of return.

Step 4: Use the slider to set the tenure.

You will get the results instantly on the screen.

Who Should Invest in ELSS Funds?

Below you will get an idea regarding who should consider investing in ELSS tax-saver mutual funds.

  • Salaried person
  • First-time investors
  • Personnel having a long-term investment horizon
  • Risk-tolerance investors
  • Investors seeking to save tax
  • Investors looking for equity exposure

Factors to Consider While Investing in ELSS Funds

You must consider all the below-stated factors before you decide to invest in ELSS tax-saver funds.

  • Reviewing Fund House
  • Fund Returns
  • Financial Parameters
  • Expense Ratio
  • Fund Manager

The Bottom Line

Although an attractive investment option, every individual must chalk out proper strategic planning before prioritising this scheme. For this, you need to assess your risk tolerance, future financial goals and requirements to get maximum ELSS fund returns.

Disclaimer: The content of this post isn't considered to be professional or legal advice, We aren't responsible for any damages arising from your access to the location content & must not be relied on or used as a substitute for legal advice from a lawyer professional in your jurisdiction. CARajput is among India's big digital compliance services platform which committed to helping people have started & developed their businesses. We had started with the goal of creating it easier for start-ups to start out their business. Our main aim is to assist the businessman with applicable laws & regulations compliance and providing support at each & every level to make sure the business stays compliant and growing continuously. For any query, help or feedback you may in touch on or Call or what’s-up on 9-555-555-480

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