TOP 5 ELSS FUNDS

ELSS or Equity Linked Saving Schemes are mutual funds which enjoy a tax-saving benefit under Section 80 C of the Income Tax Act, 1961. Investments in ELSS can be made up to a maximum limit of Rs 150,000 every year. This amount can be claimed as deduction from the total taxable income, providing a relief of up to Rs 46,800 in tax for taxpayers in the highest tax bracket. The article explains in detail the working of the ELSS and provides a pointer some of the best in the market

Meet Raj Mehta, a young professional working with a multinational IT company. While sipping his coffee and checking his emails one morning, a message from the Human Resource Department caught his eye. It was a notice – a reminder for submitting his investment proofs under Section 80 C. Faced with the familiar options of Public Provident Fund (PPF), fixed deposits, ULIP and such tax-saving investment channels, Raj felt that it was time to explore more options. And that is how he stumbled upon the Equity Linked Saving Scheme (ELSS). As he delved into the domain of ELSS, he discovered that it was not just another tax-saving instrument but something quite different from the rest.

The biggest factor in favour of ELSS is that it has the shortest lock-in period of just three years. Unlike the 15-year commitment of PPF or five years for fixed deposits, ELSS provides the freedom to access funds sooner. It’s like having a superhero that responds to your call without making you wait. Then comes the second best part: the potential for significantly higher returns. Traditional options may offer guarantees, but they struggle to keep up with inflation. ELSS, fuelled by the dynamism of the stock market, has the potential for robust growth. It’s like having a superhero that not only saves but also multiplies your wealth. And the ultimate perk? The first ₹1 lakh of ELSS returns are completely tax-free.