ELSS Funds are Prominent Tax Saving Investments Option- G Bajpai & Associates

• Investment in Equity Linked Savings Scheme can help you save up to Rs.46,800 a year in taxes.

• ELSS funds are tax-saving equity mutual funds that invest a major portion of their corpus into equity or equity-linked securities such as listed shares. They may have some exposure to fixed-income securities as well.

• The investment is eligible for deduction u/s 80-C up to 1.5 lakhs.

• There is no limit on the maximum amount of investment, while the minimum investment can be as low as Rs.500

• The Mandatory lock-in period is 3 years

• Income earned on maturity will be taxed under LTCG @10% (above Rs.1,00,000)

• Factors To Consider Before Investing in ELSS Funds: 


1. Fund returns: Before you go for a fund, compare the fund performance with its competitors & benchmark to know if it has shown consistent performance in the past. If a fund outperforms its benchmark or competitors, then the fund delivers high returns.

2. History of fund house: It is recommended to choose fund houses that have performed consistently over a long period, say about five to 10 years.

3. Expense ratio: The expense ratio depicts how much of your investment goes towards managing the fund. If a fund has a lower expense ratio, it means you can have higher take-home returns - so it's always better to go for such funds.

4. Financial parameters: You can also consider several parameters such as Standard Deviation, Sharpe Ratio, Alpha, and Beta to analyze a fund's performance. A fund with a higher standard deviation and beta is riskier than one with a lower deviation and beta. Choose funds with a higher Sharpe ratio.

5. Fund manager: The fund manager is another factor to consider because he/she is the person who plays a key role in the management of your funds. The fund manager must be competent and must have great experience in picking the right stocks and creating a strong portfolio.

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Location: 11th Floor, Wing A, Summit Building, Vibhuti Khand, Gomti Nagar, Lucknow, Uttar Pradesh 226010, India

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