An ELSS or Equity-Linked Savings Fund offers investors a great way to save taxes while earning profits. These equity-focused mutual fund investments are known to give returns ranging from 10% to 20% annually.
Since ELSS comes under Section 80C of the Income Tax Act of India, it can save you up to Rs.1.5 lakh in taxes. Moreover, since there is a three-year lock-in period, earnings up to Rs.1 lakh are classified as long term capital gains and are tax-free. Profits above this range are taxed at a flat 10%.
With such features, you might think investing in them is a time-consuming process. But it’s not. In fact, investing in ELSS is so easy that you wouldn’t even have to leave your room! Let’s explore ELSS and learn how to invest in ELSS mutual funds in India.
What are ELSS mutual funds?
ELSS is a mutual fund scheme that focuses on equity investments. It’s portfolio will have at least 65% equity investments and diversification is offered through the choice of equity investments.
There are two main classifications here. ELSS funds could focus on large cap, mid cap or smallcap companies. There are funds that focus on different sectors as well.
How to choose the best ELSS fund for you?
ELSS funds provide you with a lot of options and it is extremely important to choose something that will work for you. The first step is to compare the risk and return potential of different ELSS funds. This will give you an idea about what will work for you the best. If you have a hard time figuring out your investment horizon, you can always take the help of an investment expert.
How to invest in ELSS online?
The online investing process is easy. To begin with, you will need an account with a broker or an AMC. If you are already invested in a mutual fund, you should be already registered.
But if you are new to this and haven’t registered before, follow the below steps to get registered and invest. If you are already registered, log in to your investor account and skip to point no.5.
- Go to an AMC or a broker website. Choose a service that you trust after thoroughly doing your research. Always look at their history and see how they have handled tough economic times. Enquire about their customer service as well.
- Sign up using your basic details. You will need your name, phone number or email ID for this step.
- Do a mandatory KYC. For this step, you will need identification and address proof. PAN is also mandatory. The whole process becomes easier if you have a mobile number linked with your Aadhaar.
- Once the KYC is done, it’s time to choose an ELSS mutual fund of your choice. Refer to the information above to know how to choose one.
- Choose the amount you want to invest and do the transaction. If you have chosen the SIP route, it is a wise idea to set up autopay as well.
That’s it, now you are invested in an ELSS mutual fund!
There is no reason to stay away from ELSS mutual funds when it is feature-rich and investing in ELSS MF online is simple and hassle-free. Do your research and invest in one now!