We are making money and we are also investing it in many dimensions in order to secure our future. But seeing the trend in the finance sector, there are some fraudulent cases, which might put you in a loss instead of making more money. But one thing to keep in mind s that, come what may, you should not let your investment suffer. The best way of doing it is investing the money in ELSS. There will be many people who are familiar with the term, but if you are one of those who has no idea of what it is but wants to know more about this great investment funds then worry not. After reading this article, you will be able to make money using this technique which will help you a lot in the future. So we will start by knowing what it is and how to start investing in elss?
What is ELSS?
The full form of ELSS is equity linked saving scheme. The investments which come under this are mostly driven by tax-related saving schemes. It is a type of an equity mutual fund in which the person makes an investment of at least 80% of all its total assets in equity and also the equity-related instruments. The major ELSS comes with a statutory lock-in period of 3 years and then it becomes qualified for a tax exemption under section 80C of the Income Tax Act. With this section, it allows a maximum tax exemption which is close to Rs. 1, 50,000. The returns on ELSS funds are subject to a long term capital gains tax (LTCG) which is at 10%. But also, the long term capital gains up to Rs. 1 lakh per year are also exempted from tax.
How to invest in it?
Selecting the scheme
The foremost thing is to select the type of scheme which suits. Surely, it will a hard task for the beginners, but soon it will become a cake walk, once you are familiar with the market trends. The scheme is based on the returns it offers and you can choose it according to the type of returns you are expecting. This is one of the major points which one have to focus more while making an investment in ELSS funds.
Choose between the options
The ELSS mutual funds investment majorly offers two types of plans which are regular mutual funds, or tax saving mutual fund schemes. The person has to make a choice from them and which one they find it suitable.
Opening a bank account
In these types of investments, one needs to have a bank account in his or her name as the dividends are needed to be credited somewhere. So you need to open a bank account for that.
Pick your intermediary
There are many people who act as an intermediate between the company and the investor. While you can directly invest in the company, but it is best advisable to choose one, hey will help to take the burden off your shoulder. You can look for a mutual fund distributor online as well.
Well, these were some major steps which you need to keep in mind before making an investment in ELSS funds to make the money making fun and secure.