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What is Tax Saving Fund

Tax-saving funds serve to the investors' need of minimizing tax burden on the returns from investments.<br>

Nidhimehra
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What is Tax Saving Fund

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  1. What is Tax Saving Fund

  2. Tax Saving Fund: Tax-saving funds serve to the investors' need of minimizing tax burden on the returns from investments.

  3. About ELSS Fund: With dual advantage of Tax-saving & potential for better returns than traditional Tax-saving Investment Products, this category of Mutual Fund Schemes is must have for every investor. These funds also have the lowest lock-in period of just 3 years amongst all the options available in Section 80c

  4. Why invest in ELSS funds? ● High returns: Given the investments in ELSS are made in diversified equity portfolio, the returns are much higher than most investment options with tax saving benefits in the long run ● Tax efficient: Long term capital gains (LTCG) realized from ELSS mutual funds is taxed at only 10% if your total capital gain in the year of withdrawal is over 1 lakh. There is no capital gain tax imposed on you if your total profit is less than Rs 1 lakh in a Financial year.

  5. ● Shortest lock-in period: While Traditional tax-saving investments have longer lock-in periods, ELSS funds come with a lock-in of just three years. ● Convenience: If you don’t have enough lump sum amount to invest in ELSS for tax-saving, you might begin investing in ELSS mutual fund through systematic investment plans (SIP).

  6. What sets ELSS apart from the rest of the tax saving options? ELSS funds invest in stocks and have diversified equity allocation among tax-saving investments. They are well-placed to earn inflation-beating returns. Over a protracted period like 15 years, inflation will eat up the returns that conventional debt-oriented investments earn (PPF, NSC, TAX SAVING FD). Equity as an asset class holds the capability to conquer inflation

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