What are the benefits of investing in mutual savings funds?
Investments in tax-saving mutual funds, also known as Equity Linked Savings Schemes (ELSS), can get you a tax break of up to ₹1.5 lakh under Section 80C of the Income Tax Act.
Why should I choose ELSS over other tax savings investments?
Compared to other investments that save taxes, ELSS funds come with the lowest lock-in period of only 3 years. In addition, these are mutual stock funds, which means they have the ability to obtain high long-term returns.
Do ELSS funds have additional tax benefits?
Mutual funds that save taxes have the double benefit of saving taxes and creating wealth. They help you not only to save taxes but also to accumulate wealth in the long term because these mutual funds invest mainly in stocks and obtain higher yields than traditional tax savings investments such as PPF, FD, and NSC.
Will my money be blocked when I invest in ELSS funds?
Not only ELSS funds, all investments that save taxes come with a blocking period. But mutual funds that save taxes have the lowest blocking period of only 3 years. In comparison, PPF has a 15-year lock-in, while NPS and EPF require it to be invested until it retires.
What is SIP?
SIPs are systematic investment plans in which the money is deducted from your bank account and automatically reversed. With a SIP, you can buy units of funds at different levels of the market and benefit from the average cost of rupees.
Why is it said that SIPs are better than lump-sum investments?
With a SIP, you can invest regularly every month. By distributing your investment in this way, instead of investing the entire amount once, you can cushion the increase in the market. In addition, SIPs also provide the benefit of acquiring the habit of saving and investing each month.
How should I select mutual funds to invest?
After rigorously modeling, we choose the right mix of funds that best suits your needs. We analyze the past performance of the fund, the performance of the fund manager, its consistency, performance against its peers, among other things, to select the funds.
How much should I invest in mutual funds?
There is no fixed amount that you must invest each year in a mutual fund. Most funds have a minimum investment of $ 1000, but the annual accumulated investment may be at your convenience.
How to exchange the investment?
You can withdraw your investments at any time from your Investment Dashboard. After the redemption, the money is usually transferred to your registered bank account directly within 3 business days. The fiscal savings funds (ELSS) have a blocking period of 3 years after which you can exchange them.
How can I pay fewer taxes?
When you invest money in Tax Savings funds during the year, you reduce the amount of taxes you must pay in the year. In addition, you keep earning returns on the amount invested.
How much should I invest in tax savings?
You can invest up to Rs.1.5 Lakh under section 80C.
How long can I finish my tax savings?
You must finish all your tax savings investments before March 31 to reduce the amount of taxes you pay this year.
What are the different tax saving options?
It has many options such as PPF, Insurance, FD Tax Savings, Mutual Tax Savings funds (also called ELSS), etc.
Should I do KYC to invest in mutual funds that save taxes?
Yes. Compliance with Know Your Customer (KYC) is mandatory to invest in ELSS funds. But unlike what you would think, KYC is not a difficult process.