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Mutual Funds: There are many investment options available to people in modern times. Some invest money in government schemes without risk, while some people invest in places like share market and mutual funds. If you want to invest in mutual funds and also want to save tax, then Equity Linked Savings Scheme or ELSS is a better option for you.
According to AMFI data, more than 22 lakh folios have been added to the ELSS category in the last two years. During December 2020, the total folios in this category were 1.23 crore, whereas during December 2022, the total folios in this category increased to 1.46 crore. Bumper returns and tax savings are also available under ELSS funds.
Benefits under ELSS Fund
Under this category of funds, you can invest in the long term. Under this, the lowest lock-in period is 3 years and under this the benefit of tax exemption is given under section 80C. You can invest in this fund category in lump sum or you can also invest in it under SIP.
Benefits of investing through lump sum and SIP
If you choose the lump sum option, then you have to keep in mind that invest in this fund at a time when there is no risk in the market. Apart from this, it is necessary to do research about this category of funds as well. You can invest in lump sum by choosing the right fund. On the other hand, if you invest under SIP, then you can get good returns according to the market by investing for long term.
Good returns in the long term of ELSS funds
Equity Linked Mutual Funds have given good returns in the long term. Such funds have given an average return of 15 per cent to investors while schemes like PPF and NSC give returns of around 7 per cent.
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