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Investment tips to give you better returns

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In things to know while investing in elss
In things to know while investing in elss

Investment tips to give you better returns

Investment tips to give you better returns

3 Things to know while investing in ELSS

Equity-linked savings scheme (ELSS) is a designated scheme under mutual fund (MF) schemes that qualify for deduction under Section 80C of the Income-tax Act. The act outlines the various parameters under which tax benefits accrue to the investor.

The list below emphasizes 5 important facets of ELSS investment you must know.

  1. Out of your ELSS investment, up to Rs 1,50,000 deduction allowed under Section 80C

Remember that MFs offer ELSS as an equity oriented fund. You can invest in this fund purely on the merits of the fund in line with your investment strategy for mutual funds. Apart from achieving your investment goals, the ELSS fund offers substantial tax savings. For instance, if you have invested Rs 3,00,000 in an ELSS fund, Rs 1,50,000 of this qualifies for deduction from income. The effect of this deduction is to reduce your tax liability by as much as Rs 46,350 (30.9 percent of Rs 1,50,000).

  1. Investment in ELSS can provide better returns

The MF fund manager has more flexibility in managing the assets without having to worry about redemption from investors. In addition, this allows the fund manager to handle market volatility better which can enable better returns and growth opportunities for the investor.

  1. ELSS investment allows you flexibility for your investment strategy

Investment in ELSS provides you flexibility for planning your investment strategy. Since ELSS, an equity oriented scheme, offers tax saving benefits tagged with a lock-in period, you have the flexibility to continue with the scheme after the lock-in period is over. If your ELSS investment is performing well you can continue to stay invested and reap the benefits.

If you keep the above in mind, then you can reap rich benefits from your investments in ELSS.

Tax saving calculations shown are for illustrative purposes only. Actual benefit will vary from person to person. The user/investor needs to verify all the facts and circumstances with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time.

Standard Chartered Bank does not provide any investment advisory services under the wealth proposition. Standard Chartered Bank in its capacity of a distributor of mutual funds or while referring any other third party financial products may offer advice which is incidental to its activity of distribution/referral. Standard Chartered Bank will not be charging any fee/consideration for such advice and such advice should not be construed as ‘Investment Advice’ as defined in the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 or otherwise. Mutual Fund Investments are subject to market risk. None of the schemes mentioned herein provide guaranteed returns. ELSS returns are linked to the performance of the market and can vary over time. Please Read scheme related documents carefully prior to investing.