What are ELSS and are FMP better than ELSS? Please suggest top three ELSS

What are ELSS and are FMP better than ELSS? Please suggest top three ELSS

You can declare earnings tax deduction upto Rs. 1.50 lakh beneath Section 80 C for investments made within the tax saver mutual fund schemes popularly generally known as ELSS (Equity Linked Saving Schemes). The funding in ELSS is locked for three years. Since ELSS is mainly an fairness product, the returns are not assured and rely on the efficiency of the fairness market on the whole and the scheme specifically throughout that interval. I’d advise you to not put money into ELSS at one go and quite go for Systematic Investment Plan (SIP) to put money into an ELSS. The earnings on redemption of ELSS models are absolutely tax exempt upto Rs. 1 lakh in a year together with long run capital features on listed shares and different fairness schemes and past which it will get taxed at flat rate of 10% with out the good thing about indexation.

Tax saver scheme and FMP are not comparable funding merchandise. Against ELSS, FMPs are mainly money owed schemes of mutual funds which have a set time period and due to this fact fastened maturity date. FMPs are tax environment friendly as in comparison with financial institution fastened deposit attributable to advantage of indexation obtainable and concessional long run capital features tax rate in case the funding has been made for FMP with a maturity interval of past 36 month. Please be aware there are no tax advantages obtainable for making investments in FMP in contrast to in ELSS scheme.

Presently top three ELSS tax saver funds schemes are Mirae Asset Tax Saver Fund, IDFC Tax Advantage (ELSS) Fund and Axis Long Term Equity Fund primarily based on efficiency of the scheme, asset beneath administration and ranking given by unbiased businesses.

Balwant Jain is a tax and funding skilled and could be reached on jainbalwant@gmail.com and @jainbalwant on Twitter

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