DON’T WAIT FOR THE LAST MINUTE – A Rupee Saved is a Rupee Earned
Invest in ELSS (Equity Linked Savings Scheme) at the beginning of the financial year. Not only will it help you avoid the last minute panic to save taxes, you could also benefit from returns on your Equity investments throughout the year!
What is Equity Linked Savings Schemes (ELSS)?
Equity linked savings schemes (ELSS) are mutual fund investments that also provide tax savings. ELSS funds are invested entirely into the equity markets, thereby providing good opportunities for growth. However, ELSS schemes also carry the risks associated with the equity market, and there’s no guarantee of any fixed returns.
Benefits of Systematic Withdrawal Plan
Money when you need it.
Systematic Withdrawal Plan allows account holder to access their money exactly when they need it. This helps individuals to achieve their financial goals.
It allows investor to withdraw money on a periodic basis. Thus, investors do not need to withdraw everything at once. This way, Systematic Withdrawal Plan helps achieve a higher average sales price. Also, timing the market is not necessary to ensure that best sale price is available.
In Equity Oriented Mutual Funds – Withdrawals done after 1 year qualify for Long Term Capital Gains which is completely Tax Free. Withdrawals done before 1 year qualify for Short Term Capital Gains which is Taxable @ 15%.
Other than Equity Oriented Mutual Funds – Taxed as per individual investors Tax Slab if Withdrawals done before 1 year (Short Term Capital Gain) and with 20% indexation if withdrawals done after 1 year (Long Term Capital Gain)
- Tax Savings under section 80C of Income Tax Act, 1961
- Shorter lock-in period of 3 years as compared to NSC & PPF
- Tax Free Gains : Both the returns & dividends are tax free (as per prevailing tax laws)
- Exposure to equity results in high earning potential
Investing through SIP.
- Investing small amounts regularly helps reduce burden
- Stock markets fluctuations help to average the unit cost
- Buy more units when the markets are bearish & sell less units when the markets are bullish
- No entry load & other charges
Why choose ELSS over other available Tax Saving Investment Avenues?
Partial withdrawals are allowed from 6th financial year. However, the full amount can be withdrawn after 15 years. Source: www.indiapost.gov.in for PPF and NSC. Source: www.sbi.co.in for Bank FD. *Returns are subject to market risks.
Don’t just aim for Saving Tax, aim for Creating Wealth by beating inflation at the same time!