Important aspects to know before investing in ELSS Mutual Funds

About ELSS Mutual Funds

ELSS Mutual FundsEvery year diligent salaried employees get busy to plan their tax savings. Most of them are in the process of finalizing oaths to invest under Section 80 C. Under this section, a person can get a tax deduction of Rs 1 Lakh. To get this rebate, most people have started investing in ELSS (Equity Linked Savings scheme) or in mutual funds coming under Section 80 C.

If you are really interested in investing in these ELSS Mutual funds, you should consider some of the important points.

Invest for long term view:

Most of the stock pundits claim that ELSS Mutual Funds have become a medium to invest in equity funds or investments. If your monthly salary contributes mostly in EPF (Employee provident fund) and term insurance plan scheme, you can invest in ELSS with whatsoever left amount.

Performance of these funds:

The performance of ELSS has been a cause of serious concern of most of the people. According to a research ELSS mutual funds have produced a mere 1.28 % since last 3 years. Even if you are not satisfied with the performance of these funds, you can opt for other tax saving products.

Stagger your Investments:

According to financial investors, while investing in ELSS funds one should follow the SIP (systematic investment plan) as the market is likely to go choppy this financial term. Instead of investing a huge lump sum for the sake of income tax, you should start stagger your investments right from the beginning of the financial year.

Possible returns:

ELSS Mutual Funds provide you the best possible returns after a long term performance record. For instance, you have done a lump sum investment of Rs 30,000, you can get an annualized return of 9.66%. Some of the funds that are rated as 5 stars are Private Prudential Tax Plan Franklin India tax shield and many more.

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