There are various investment options available under Sec 80C of the Income Tax Act that allow an individual to claim deductions from their Taxable Income by investing and declaring investment in these options. These instruments include the Employee Provident Fund, Public Provident Fund, Life Insurance Policies, Long Term Fixed Deposits and Tax Saving Mutual Fund Schemes also called Equity Linked Savings Schemes (ELSS).
We looked at various parameters to compare ELSS over other investment options and summarize below why ELSS may be a better investment than other options.
|Description||Mutual Fund Schemes that invest in Diversified Equity||Public Provident Fund||National Savings Certificates||FDs of greater than 5 years|
|Pre-mature withdrawals||Not permitted||Conditional||Not allowed||No tax benefit if withdrawn before 5 years + premature withdrawal penalty|
|Provider||Asset Management Companies||GOI||Department of Post||Commercial Banks|
|Minimum Amount that can be invested||500||500||100||Variable|
|Lock In for Tax Exemption||3 years||15 years||6 years||5 years|
|Taxation||None||None||Interest Taxable||Interest Taxable|
|Returns||Market Linked||8.5%||8.0% (NSC VIII)||6.5% (SBI)|
As you can see from the above table, ELSS schemes have the potential to offer higher returns(though not guaranteed), have shorter lock-ins and all elements including Principal and Capital Gains if any are tax free.
If you have not invested in ELSS schemes before, please do consider them for tax saving this year. They have proved to be a smart way to save taxes as well as earn returns higher than inflation. And when you use Kuvera to make these investments, there are no commissions paid on your investment by Mutual Funds as we are a Direct Plan Only platform. This puts even more money in your pocket over the course of your investment.
So Invest Smart and save taxes and commissions today by Investing in ELSS Schemes through Kuvera.
Please visit www.kuvera.in to invest in Direct Plans of Mutual Funds and save BIG on commissions!!!
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