Equity linked savings scheme mutual funds are way more advantageous if you invest in equity market. Also, it can give you better returns compared to other asset classes over a long term. It offers the twin-advantage of capital appreciation and tax benefits. It can be opened with a mere amount of 500/-. It has got superior returns for equities. Moreover, returns from ELSS are tax free and you can save income tax of up to Rs 1.5 lakh. The lock up period though is 3 years only which means the invested amount can be withdrawn only after 3 years. Any individual and a person belonging to the category of HUF can invest in these funds.
However, the returns wholly depend on the earnings from the investment. Through the years, ELSS has proved to beat inflation by the investment in equities. That is considered to be quite an advantage to investors. By sending the quarterly statements, the investors will come to know of the balance and performance of their investments. The only negative side to this is that the risk involved is high.
There are two options to choose from:
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