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ELSS Vs PPF Vs ULIP Which is Better: If you are planning to invest. So this news can prove to be very useful for you. We are going to give you information about some investments that give excellent returns in this news. There are 3 such investment options, Equity Linked Savings Scheme (ELSS), Public Provident Fund (PPF) and Unit Linked Insurance Plan (ULIP). Know which option will prove to be better for you.
Tax exemption is available in all three
If you ELSS comes under equity category, PPF comes under loan category and ULIP is an insurance product. It is necessary to compare these 3 investment products, because all three of them get the facility of tax exemption under Income Tax Section 80C. That’s why investors have to face trouble in the decision to invest. Which of these three is the best option for taxpayers? Understand the whole thing like this..
ELSS Vs PPF Vs ULIP
ELSS, PPF and ULIP all three investment options provide good returns to investors under Section 80C of Income Tax as well as tax exemption benefits of up to Rs 1.5 lakh annually.
- Liquidity :- ELSS offers the lowest lock-in period of only 3 years as compared to ULIPs and PPF. Whereas, ULIP and PPF have a lock-in period of 5 years and 15 years respectively.
- Expense :- ELSS gives the advantage of low cost and professional management. There is a cap on the expense ratio from SEBI, but there is no such cap for ULIPs. The charges for ULIP plans can be very high as compared to mutual funds. For PPF, the investor has to pay only one time fee of Rs 100 in addition to his investment amount.
- Risk Cover :-ULIPs come with an in-built insurance plan that provides an assured amount to the family in case of death of the policyholder within the term of the policy. In the case of mutual funds and PPF, there is no risk cover through insurance.
- investment return :-The returns on PPF are fixed, guaranteed and tax free, whereas in case of ELSS and ULIP returns are not guaranteed as both the investment options are market linked. The current interest rate in PPF is 7.1 percent per annum. The average returns on ELSS for 3 years and 5 years are 17.19 per cent and 11.10 per cent respectively.
- taxation :- If you withdraw PPF money on maturity, it will not attract any tax, whereas in case of ELSS gains, after the lock-in period, 10% tax is levied with a rebate of Rs 1 lakh. In case of ULIPs, the maturity amount remains tax-free only till the total annual premiums are up to Rs 2.5 lakhs per annum and if, the annual premiums exceed Rs 2.5 lakhs, one is liable to capital gains tax on any income. has to be paid. Interest is earned at the rate of 10% if held for more than 1 year and at the rate of 15% if held for less than 1 year.
Understand the special things of the news at a glance
risk :- ELSS- Equity Linked; PPF- Government Backed, Safest, ULIP- Relies on combination of Equity/Debt/Hybrid.
Lock in period :- ELSS- 3 years, PPF – 15 years (partial withdrawal allowed after 7 years), ULIP- 5 years.
Taxation :- ELSS – 10% on profit exceeding Rs 1,00,000 in any financial year. PPF- Tax free, ULIP-returns can be availed under section 10(10-D).
Disclaimer: (The information provided here is for information only. It is important to mention here that investing in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com It is never advised to invest money here.)
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