Want to save some tax while investing?

Want to save some tax while investing?

For every individual, the saving for tough times is a must. There are many areas where people keep their saved amount. However, each of these options is not safe enough to be trusted, and that is why, in many cases, people have to bear the loss when they go for the wrong option.

For the people who earn well, the tax burden is also a serious concern. Nowadays, one can find an option where he can invest the amount and save tax on the invested amount. It is possible with the help of investment in ELSS. This fund is specifically designed for saving of tax only.

The fund and option:

This fund is known as an equity-linked saving scheme where one can invest his amount in one shot or in instalment. The instalment investment is known as SIP. As per the income tax act, the amount invested in ELSS is exempted from tax to the amount of 150000. One may want to know what is ELSS investment.  It is an option where the investor needs to keep the amount for at least three years. That means the amount invested in this fund cannot be withdrawn for the next three years. Hence one can see the growth of the amount in this period.

The investment:

Every company that has ELSS has a special strategy as per which invests in various options available in the share market. The fund managers have leverage here as the fund is close-ended, and the investors cannot ask for money back till three years. The fund managers can rotate the amount of the investment in various companies and segments where they can get maximum return and as the period of the investment is large enough it also helps them to earn well and offer a good return to the investors.

One can go for one shot investment in ELSS or save tax with the help of instalment also. Hence if one needs to invest 150000 in ELSS, he does not require to pay all the amount together. He can go for a small amount such as 12500 a month and can save a good amount of income tax on the same. Hence for one who has to pay income tax to a good extent, this can be the best option for saving tax and earn a handsome return on the same. There are many companies that have got ELSS funds in their portfolio.

How to find the right ELSS?

Finding the right option in ELSS is not a big task. One can check some of the options from various companies in the market and compare their performance for the past some years. This can help the investor get the best return in the coming days also. One can also go for the options where the amount is invested in the market to get more returns. For an average investor, the saving tax can be a huge benefit which can be offered by the ELSS only. The best thing here is one can save tax and get a huge return on the invested amount also.

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