Hello Readers!
ELSS (Equity Linked Saving Scheme), an equity mutual fund scheme, that not only gives you the option for good wealth creation but as per Section 80C of the Income Tax Act, investors of these funds also get the benefits of saving tax on their investments.
Simply ELSS offers dual benefits, Wealth creation + Tax saving returns.
Many investors have been investing in ELSS funds, some of them also shared many positive things that they learned about ELSS mutual fund while investing in these funds. They say, “Investing in ELSS is like a practical lesson that one learns only while investing in ELSS and not just by talking about them with experts or by reading about them.”
ELSS investors often share their experiences and benefits while investing in ELSS, to make it helpful to other investors who are looking forward, investing in tax saving mutual funds.
Here are some experiences or lessons shared by ELSS investors that might be helpful to you in case if you are planning to invest in ELSS mutual funds.
It’s Most Convenient
Investors of ELSS share that starting investment in ELSS mutual funds was much fast and easy. A PAN card, a bank account, and some form fillings, and they were all set to invest in ELSS mutual funds. They say, once you are done with your KYC registration, you can start investing in ELSS fund of your choice.
Through your investment journey in ELSS, only you have to keep your SIP installment ready in your bank amount before the due date in case if you are investing through SIP in ELSS mutual funds. If you are investing through lump-sum, then invest the money whenever you have it.
An Effective Way to Participate In Equity And Enjoy The Experience Of It
Most of the ELSS funds are long-term oriented multi-cap funds, that invest in companies with market capitalizations keeping in mind the long-term growth of companies. Thus, not only for tax saving purposes but ELSS tax saving funds can be a good step for those who are looking towards building an equity portfolio.
ELSS funds being a tax-saving fund is associated with a three year lock-in period, but investors of ELSS funds take this lock-in period in a positive way. They say that this lock-in period in ELSS, kept themselves detached from short term market fluctuations, they were helpless during short-term fluctuation as they cannot do anything with their locked investments.
One of the investors shares that “In these four years of my investment, I saw the BSE Sensex do its seemingly erratic climb from 28,000 to 40,000.”
He further adds that during his investment in ELSS (in 2018, when the Sensex lose almost 4000 points in a few months), he saw many ups and downs, and at many instants, he had seen his ELSS portfolio in the red.
He shares that during his initial years of investment, at many times he got nervous after seeing the negative returns, but he wasn’t able to do anything as his investment was locked for three years. And now after he has passed that phase, he completely understands, the nature of the asset class and how stock prices grow over time.
He says that the best thing about the ELSS fund is its lock-in period that helped me stuck to my ELSS investment during the market’s ups and downs and prohibited me to take any drastic step for my investment.
Returns from ELSS Funds
ELSS funds offer returns that are tax-efficient, helps to create wealth, and are above the prevailing inflation rate as well. Investor shares that ELSS funds are better than traditional fixed income tax saving options.
Investors say although ELSS funds are similar to Equity in nature, but still they are a good way for the new equity investor to learn how the asset class behaves. As per SEBI, investment in ELSS up to Rs 1.5 lakh per annum avails the option of tax saving to investors. It means that investors who don’t have much money can go investing in ELSS, in their initial years of investment. However, there is no upper limit, on how much you can invest in tax saving funds.
Well, these are the experiences shared by investors of ELSS, and if we conclude then with these experiences, we can say that investing in ELSS funds for these investors was much beneficial. For those who are planning to start investing in mutual funds, we advise do start your journey with ELSS funds. They can be much helpful to you in achieving your long-term goals, along with tax-saving benefits.
For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).