Why is ELSS better than other tax saving investments?

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.

	ELSS	PPF	NSC	Fixed Deposits
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Pre-mature withdrawals	Not permitted	Conditional	Not allowed	No tax benefit if withdrawn before 5 years + premature withdrawal penalty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
Risk	High	Low	Low	Low
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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