The month of March is going on, which is the last month of the Indian financial year. In this, most taxpayers invest in many options for tax benefits. Equity Linked Savings Scheme (ELSS) is the most preferred among mutual fund schemes of similar tax benefits. This not only reduces the tax liability of the investors but also increases their savings in the long term. The ELSS investment amount is invested in the equity market as per the name.
Experts believe that one should not hesitate to invest in mutual funds for fear of market fluctuations. If you are an investor who wants to earn in short term market changes, then there is a better chance of investing all the time.
There is a lock-in period of 3 years in ELSS. However, after this lock-in period ends, the investor can continue it if there is a lot of decline in the market at that time and the returns are getting less. According to financial planners, when the market gets stronger and the net asset value (NAV) increases, then the investor can think of an exit. It should be noted here that investors get a huge benefit in the form of tax savings with higher returns if they invest for a longer period of time.
Keep these things in mind before investing in ELSS
- One can invest in ELSS through any fund house or mutual fund distributors.
- It is very important to choose better ELSS. In such a situation, instead of making the decision yourself, seek the advice of an expert. This is because usually, investors are not able to study all the points in choosing mutual funds.
- Historical data ie how mutual funds have given returns before and should not choose any mutual funds through star ratings because successful returns in previous years do not guarantee better returns in future also.
- Better returns can be achieved if help is taken from any expert or advisor who has a good track record.
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