How To Make The Best Of ELSS For Saving Taxes And Meeting Your Long Term Goals

With few months left to save income tax for this financial year 2018-19, if one has not yet started one’s tax planning, no more procrastination is advised.

- Sanjeev Puri

Spend some time to plan and select the right investment option to save tax rather than repent later by choosing a wrong one.

Of all the tax savers, equity mutual funds provide an efficient way to not only save tax but also create wealth over the long term. And, of the various mutual fund schemes, equity linked savings schemes popularly known as ELSS helps an investor reduce one’s taxable income by the amount invested and thereby reduces tax liability.

Importantly, link your investments in ELSS to a long term goal like children’s education, marriage, home buying or one’s own pension needs. Let us now see what ELSS schemes are and how they help in tax planning and cut your taxes for this financial year 2018-19.

What are they?

As the name of the scheme very clearly suggests, it is a savings scheme that’s linked to equity. Investment avenues for your savings can be a mix of various asset classes like equity, debt, gold, real estate etc. ELSS is a type of mutual fund, which similar to any diversified equity mutual fund routes investments into the equities.