ELSS (Equity linked savings scheme) is an equity fund which comes under section 80C income tax. It is a very good scheme to invest in for all those who are new in the market. It does not just provide us assured returns but also it is a tax-free scheme. It doesn’t have any age limit. So a person can start investing in this scheme once they start earning.
ELSS comprises of a lot of features.
Features of ELSS scheme:
This scheme provides tax benefits up to Rs. 1, 50,000 under section 80C of income tax.
It provides two options for the investors: Dividend and growth option.
In growth option, a single payment at a particular time is done to the investor after completion of the lock-in period and under dividend option fixed amount paid in installments during the lock-in-period.
An investment up to Rs1, 50,000 can be made per year.
It comes with a lock-in period of 3 years.
The return of ELSS depends on the performance of the market.
Advantages of ELSS:
ELSS offers tax-free gains. There are many other advantages of ELSS:
3-year lock-in-period: ELSS provides a very short lock-in-period of 3 years. Thus this scheme is very much beneficial for all those who want to invest for a short time.
Dividend and growth option: It comes with two fund options which are growth and dividend. I growth single payment is made at a particular time to the investors and in dividend option fixed amount is paid in installments.
Provides high returns: In this scheme, the amount is invested in equity-oriented instruments. Those investors who are having a good portfolio can earn a good amount of returns.
No minimum limit: Also in ELSS (Equity linked saving scheme)the minimum investing limit is very low. You can also start by investing just Rs. 500. So you can also invest in this scheme although you are earning low.
Where you can open an ELSS account?
The ELSS account opening option is provided by many national and private banks. You can invest money in ELSS funds both by online and offline method.
The basic requirement of online and offline methods to invest money in ELSS:
Requirements of offline investment: KYC documents such as Aadhaar card, PAN, etc are the basic requirements while investing offline in ELSS funds. Filled bank forms are mandatory.
The requirement of online investment: you can also open ELSS account online. For online investment, the investors have to complete the online registration procedure properly. Aadhar-based eKYC is required to complete the registration process. After the completion of online registration, the investor will get an email of pre-filled bank mandate on their registered email id. KYC documents such as PAN, Aadhaar card, etc can be used to complete the process of registration.
ELSS (equity-linked saving scheme) is the shortest scheme among all the tax-saving schemes. It is a tax saving scheme which provides high capital benefits.