Building wealth and shaping your financial objectives are of paramount significance. It’s imperative to devise smart strategies that will help you earn huge returns. Looking for an effective, unique, and profitable investment avenue is crucial to fetch you impressive returns. When it comes to taking the investment decision, investors have to analyse and assess quite a few factors. Choosing the most profitable investment channel will be the first thing to do, as that will determine the success of your investments.
Determining the investment
If you are investing in ELSS funds, you will have the chance to achieve tax savings. An amount of Rs. 1.5 lakh happens to be the maximum amount allowed for deductions under Section 80C. It’s a rule under the ‘Income Tax Act.’ Even if you belong to the highest tax bracket, you will have the opportunity to save a whopping amount of Rs. 46,350.
So, what are the reasons that make ELSS investments so popular and crucial? You need strong reasons to invest in this particular scheme, and here are some of them.
Identifying the reasons
Every individual wants to accumulate wealth and gather a decent amount of savings. While making financial investments, they are always on the lookout for profitable avenues. When it boils down to securing the future, no individual would like to fulfil short-term objectives. Financial planning always encompasses long-term goals, and elss funds are highly popular in this regard.
- Capital growth
ELSS ranks amongst the most popular tax saving mutual funds that give you the opportunity to grow your capital. You can link and align the funds with your long-term financial plans and reap the benefits of compounding. That will help you build capital over a certain period. Although the process is gradual, it will help you create the expected corpus.
- Minimum lock-ins
Any scheme under this particular category has the minimum lock-in period. With a lock-in period of 3 years, ELSS happens to be the perfect option for investors. Compared to its counterparts like PPF, which has a lock-in period of 15 years, ELSS is more flexible, comprehensive, and profitable.
- Tax savings
The ‘tax saving’ factor happens to be the highlight of this particular fund. If you are investing a sum of Rs. 1.5 lakh, you can save Rs. 46,350. However, it’s imperative to fall under the 30% tax bracket. If you belong to the 20% tax group, your savings will be around Rs. 30,900.
- SIP plans
Investing a huge sum of money can be difficult. It isn’t that easy as you need to have the cash ready at hand. Step-by-step and monthly investment through SIP will prove to be the best option. You will have the opportunity to make smaller investments and reap the benefits of rupee-cost averaging in the long run.
- Tax-free maturity proceeds
After the completion of the lock-in period, your returns through this particular fund will be tax-free. It is indeed a crucial benefit you receive under this particular scheme.
These features of ELSS will give you enough reasons to invest in this particular scheme. Make sure you determine the sum and plan the investment soon.