Wish to invest in ELSS? Sharekhan tells you about the best schemes to save Income Tax
Under Section 80C with the Equity-Linked Saving Scheme, wherein there is a lock-in period of 3 years, wherein LTCG is tax-free if it falls below Rs 1 lakh.
Best ELSS Plans, Scheme: When it comes to investment, there are many tools through which an individual can avail gains and in turn strengthen their wealth. Among the plethora of schemes are public provident fund (PPF), fixed deposits (FD) and National Savings Certificate (NCS). Equity Linked Saving Scheme (ELSS) is one such investment tool wherein the investor not only gets the benefit of a higher return, but also the gains are generally partially taxable. In other words, the investor's pockets get heavier with investments made through ELSS.
Under Section 80C with the Equity-Linked Saving Scheme, wherein there is a lock-in period of 3 years. Here, the long term capital gains or LTCG is tax-free if it falls below Rs 1 lakh. If the LTCG exceeds the said amount, it is taxed at the rate of 10%, devoid the benefit of indexation.
As said by ClearTax, with ELSS mutual funds get the dual benefit of saving on taxes and a higher return on investment compared to bank FD, PF, NSC and other tax saving investment options.
Returns are taxable at a concessional rate of 10% if gains are over and above Rs. 1 lakh. This coupled with a mere lock-in period of 3 years is all the more reason for one to invest in ELSS, ClearTax's report further adds.
Sharekhan, in their best ELSS picks for the month of May 2019, pick out the following ELSS mutual funds to invest in, wherein the investor can get higher return range and also, reap the benefits of Section 80C.
IDFC Tax Advantage (ELSS) Fund - Reg - Growth:
This scheme has a compound annualised percent up to 5 years of 17.1. It has a net value price of Rs 57.
Aditya Birla Sun Life Tax Relief 96 - Growth:
The net value rate of this fund is Rs 32. The compound annualised will be 18.4%, up to 5 years.
Axis Long Term Equity Fund - Growth:
Here, the scheme will have an annualised compound of 18.2% up to five years, with the net value rate at Rs 44.
ICICI Prudential Long Term Equity Fund (Tax Saving) - Reg - Growth:
This scheme will witness a compound annualised percent of 15.3%, up to 5 years. Here, the net value rate is Rs 381.
Franklin India Taxshield - Growth:
The annualised compound per cent will be 15.7% up to 5 years., with the net value rate at Rs 575