Forums Extreme

Top Menu

  • Home
  • Send Us Email

Main Menu

  • Business
  • Education
  • Finance
  • Health
  • Home
  • Travel
  • More
    • Auto
    • Law
    • Real Estate
    • Sports
    • Shopping
  • Technology

logo

Forums Extreme

  • Business
  • Education
  • Finance
  • Health
  • Home
  • Travel
  • More
    • Auto
    • Law
    • Real Estate
    • Sports
    • Shopping
  • Technology
  • Simple Strategies for Playing Online Slot Machines

  • How to Find Reliable Land Surveyors in Melbourne

  • How global events affect the Australian forex markets

  • Finding A Reputable Supplier For All Your Vaping Requirements

  • The Best Places To Find Cycle Frontier CheatsAimbot And Wallhacks

Finance
Home›Finance›WHAT ARE TAX SAVING MUTUAL FUNDS?

WHAT ARE TAX SAVING MUTUAL FUNDS?

By Kely Mark
April 24, 2020
1003
0
Share:

If you earning, chances are you are looking out for ways to save on taxes. The more you save on taxes, the more you can take your earnings home. Section 80C of the Income Tax Act, 1961 offers tax benefits to investors with its varied options of tax-saving investments. Although these investments provide tax deductions to its investors, they prove slightly inefficient when you consider theaverage returns provided in the context of the period your money is locked-in with them.One such investment avenue is tax-saver mutual fund – Equity Linked-Savings Scheme or also known as ELSS.

What are tax-saving mutual funds or ELSS mutual funds?

ELSS funds are like any other mutual funds that pool money collected from various investors and further invest it in various stocks of several companies. This creates a basket of equities for the investors, minimizing the risk exposure experienced due to the market volatility. ELSS funds invest at least 80% of their corpus in equity and equity-linked securities. Investments in these tax-saving mutual funds are eligible for tax deductions of up to Rs1.5 Lakhs u/s 80C. As an investor, you can save up to Rs46,800 per year by investing in ELSS funds. The amount you invest in ELSS is subtracted from your taxable income which further lowers the amount of income tax paid by you. ELSS mutual funds are accompanied by a 3-year lock-in tenure, shortest lock-in period among all other Section 80C investments which experience a minimum of 5-year lock-in tenure. Thus, ELSS funds act as a mutual fund tax saver scheme that also aids in wealth creation.

Distinct ways to invest in ELSS

There are 3 ways to invest in these tax-saving mutual funds:

  1. Growth option: This is a long-term wealth creation platform wherein the investor does not receive any benefits in the form of dividends. In this option, the true value of the fund is only realized at redemption. This aids in appreciating the total Net Asset Value (NAV) of the fund and thus the profits multiply over time.
  2. Dividend option: Under this option, an individual receives benefits in a timely manner in the form of completely tax-free dividends. The dividends are announced only when the fund enjoys excessive profits.
  3. Dividend reinvestments option: Under this option, the investor reinvests his dividends received as a new investment to add to the NAV of the fund. This option can work in your favor when the market witnesses an upsurge and is predicted to continue the same way.

Although ELSS funds are mandated to be invested for a period of 3 years, mutual fund experts often advise their clients to stay invested for a longer duration, say 10 to 15 years. They ask their clients to link their ELSS investments with long-term financial goals. This would help to focus on their financial goals rather than fretting over the performance of the stock market. That being said, tax-saving mutual funds can be a great way to boost your wealth in the long-term and help you to meet your financial goals.

Previous Article

Before You Buy A New Garage Door, ...

Next Article

Ways To Keep Yourself Entertained While in ...

Share:

Related articles More from author

  • Finance

    Home Based Business Finance

    September 10, 2019
    By Kely Mark
  • Finance

    Which points must be considered while buying Critical Illness Insurance?

    December 24, 2019
    By Kely Mark
  • Finance

    How global events affect the Australian forex markets

    May 31, 2022
    By Kely Mark
  • Finance

    A Few Important Aspects that make Evergreen Wealth Formula Suitable for you

    December 28, 2020
    By Kely Mark
  • Finance

    5 Simple Steps to Retirement Planning

    September 11, 2020
    By Kely Mark
  • Finance

    Ask These Questions to Your Mortgage Lender Before Finalizing on The Loan

    February 17, 2020
    By Kely Mark

Comments are closed.

  • Business

    How To Hire A Reliable Structural Engineer For Your Building Project

  • Health

    The Best Ways To Avoid Burnout In Online Modeling

  • Food

    Healthy Food Can Help You Burn Off Fat

  • Recent

  • Popular

  • Comments

  • Simple Strategies for Playing Online Slot Machines

    By Kely Mark
    June 16, 2022
  • How to Find Reliable Land Surveyors in Melbourne

    By Kely Mark
    June 10, 2022
  • How global events affect the Australian forex markets

    By Kely Mark
    May 31, 2022
  • Finding A Reputable Supplier For All Your Vaping Requirements

    By Kely Mark
    April 8, 2022
  • The Best Places To Find Cycle Frontier CheatsAimbot And Wallhacks

    By Kely Mark
    March 25, 2022
  • Simple Strategies for Playing Online Slot Machines

    By Kely Mark
    June 16, 2022
  • Ford Auto Parts

    By Kely Mark
    January 12, 2019
  • Auto Parts, Who Understood – Oil Viscosity Makes A significant Difference!

    By Kely Mark
    January 20, 2019
  • Discount Auto Parts – 4 Methods to Save!

    By Kely Mark
    January 25, 2019
  • Auto Part Blues – Just Lucky I Suppose

    By Kely Mark
    February 10, 2019
  • Casino

    Simple Strategies for Playing Online Slot Machines

  • Business

    How to Find Reliable Land Surveyors in Melbourne

  • Finance

    How global events affect the Australian forex markets

  • Health

    Finding A Reputable Supplier For All Your Vaping Requirements

  • Casino

    The Best Places To Find Cycle Frontier CheatsAimbot And Wallhacks

Recent Posts

  • Simple Strategies for Playing Online Slot Machines June 16, 2022
  • How to Find Reliable Land Surveyors in Melbourne June 10, 2022
  • How global events affect the Australian forex markets May 31, 2022
  • Finding A Reputable Supplier For All Your Vaping Requirements April 8, 2022
  • The Best Places To Find Cycle Frontier CheatsAimbot And Wallhacks March 25, 2022
  • Don’t Forget To Follow These Points If You Are A Beginner March 23, 2022
  • Comfortable office furniture should fit your body – A guide to choosing the best December 16, 2021

2022

  • – June (2)
    • Simple Strategies for Playing Online Slot Machines
    • How to Find Reliable Land Surveyors in Melbourne
  • + May (1)
  • + April (1)
  • + March (2)

2021

  • + December (1)
  • + November (4)
  • + October (2)
  • + September (2)
  • + August (3)
  • + July (1)
  • + June (1)
  • + May (1)

2020

  • + December (5)
  • + November (2)
  • + October (7)
  • + September (5)
  • + August (2)
  • + July (1)
  • + June (2)
  • + May (3)
  • + April (4)
  • + March (7)
  • + February (6)
  • + January (3)

2019

  • + December (7)
  • + November (2)
  • + October (1)
  • + September (7)
  • + August (6)
  • + July (6)
  • + June (7)
  • + May (8)
  • + April (5)
  • + March (8)
  • + February (4)
  • + January (4)
  • Send Us Email
© 2020 Forums Extreme- All Rights Reserved.