ELSS: An easy way to earn and save tax
In the modern administration states, there are certain aspects as per which the tax is levied on the citizens. For many people, it can be a burden as the income is not that high and still tax has to be paid. There are various schemes also offered by the authorities that can help one save the tax. One of such options is named as an equity-linked saving scheme where one has to invest a certain amount in the specific scheme of a mutual fund,and the concerned amount is blocked for a definite period. One cannot withdraw the same for a specific period and hence on the invested amount one can have the benefit of saving tax as well as fetching a good return in terms of rate when the price of the units increases.
For a common man, the most important question is how to invest in ELSS. Obviously, everyone likes to see his investment growing and get the tax benefit on the same also. There are companies in the market direct mutual fund appwhich are permitted by the government to bring ELSS in the market and get the investment in them from retail investors as well as institutes. There is a specific scheme number allotted to the concerned company for specific ELSS scheme. Usually, each company is offered the ELSS once only. It is a tool which can help one save income tax up to 150000 annually with the help of investment in it. The tax is exempted under section 80 C of the income tax act.
The process for investing in this tool is simple. One needs to get the form of the concerned company and fill the same with his details. One can go for a lump sum investment or one-time investment as per his choice. As soon as the form is filled and the amount is transferred the investor can have receipt of the same which can work as investment proof also. Due to such investment, the amount which is investedis locked for 3 to 5 years as per the scheme,and one can have tax reduced to that extent of the invested amount. Not only that, the amount that is invested in the ELSS can also grow which means after concerned period one can have amount with an increment.
Why invest in ELSS?
This scheme is specifically for tax saving only. The transaction here is transparent,and hence one does not need to worry about the safety or growth of his money. One can also monitor the increase or decrease in the value of units as they are regularly published. One can check several ELSS options offered by different companies and go for the one that is best suitable to him. The best part of this investment option is one can also go for the SIP that is systematic investment plan when he wants to save tax and also invest good amount for a better tomorrow. Hence ELSS can prove a vital tool in the financial goals of an individual who loves to invest and earn.