Why ELSS funds are tax free?

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In India, tax-saving mutual funds called Equity Linked Savings Scheme (ELSS) Funds are intended to provide investors with the dual advantages of wealth building and tax efficiency.  

In India, tax-saving mutual funds called Equity Linked Savings Scheme (ELSS) Funds are intended to provide investors with the dual advantages of wealth building and tax efficiency.   

ELSS funds are tax-free. Because they meet Section 80C of the Income Tax Act and have a strategic allocation to equities, funds under the Equity Linked Savings Scheme (ELSS) are exempt from taxes. ELSS funds allow investors to deduct up to Rs 1.5 lakh from their annual taxable income.  

ELSS funds provide investors with a long-term opportunity for substantial wealth appreciation since they focus primarily on equity investments. ELSS mutual funds offer a chance to create wealth through exposure to the dynamic equity markets, in addition to providing a means of reducing taxes. Regarding tax-saving options, ELSS is unique since it can yield higher returns than other options like public provident funds (PPF) or fixed deposits.
Investors should undertake comprehensive due diligence and seek guidance from financial professionals to identify ELSS funds that align effectively with their investment goals and risk appetite.

 

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