Tax Saving Investment With Elss- How Can You Save Tax & Create Wealth At The Same Time?

By Author: QuantumAMC
Total Articles: 80
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As the year ends with all the festivities, we are also coming an inch closer to the tax saving season. The year 2020 might have impacted our savings and financial wellbeing, so this time choosing a prudent tax saving instrument becomes not just important but rather imperative.
Look beyond the Ordinary
Through the years, you've been saving taxes with Public Provident Funds (PPFs), National Savings Certificates (NSCs) and Bank Fixed Deposits (FDs). Sure, these are good and "safe" options but have you ever considered another option which has the potential of generating returns linked with market earnings along with saving taxes?
Equity Linked Savings Scheme (ELSS) is one such option.
ELSS = Tax Benefits + Potential Long Term Capital Appreciation
ELSS is more than just a tax-saving instrument:
ELSS gives you the opportunity to invest in equities
ELSS funds invest 80% in equity and equity related instruments. Historical data shows that equities have the potential to earn higher returns (higher risk) as compared to other asset classes over a longer period of time.

Lowest lock-in ...
... period:
While the maturity period of other tax saving instruments vary between 5 to 15 years, ELSS has the shortest lock-in period of 3 years under the Section 80C category. While this period too can seem lengthy, it is a blessing in disguise since this leads to less portfolio churning and potential to generate good returns after the lock-in period.

SIP option:The Systematic Investment Plan (SIP) option is probably the best feature while investing in ELSS since you can invest a small amount (as low as Rs. 500) every month for a specific period. With an SIP, you receive the benefits of rupee cost averaging and adopt a disciplined approach to investing.

Long Term Capital Gain exempt upto Rs. 1 lakh:
The Long-Term Capital Gains on ELSS are tax-exempt up to Rs 1 lakh. When you sell your ELSS units, the profits (long-term capital gains after the 3-year lock-in period) exceeding Rs 1 lakh a year is taxable at the rate of 10% without indexation.

Reap double benefits:
Investment in an ELSS fund should not be looked at only from the purpose of saving tax. You should also consider it as an investment option to build your corpus for the future. With an ELSS, you achieve both the twin objectives - effective tax saving and capital growth in the long run.
And while you are looking for an ELSS fund to save tax, maybe you should consider adding the Quantum Tax Saving Fund (QTSF) - an open ended Equity Linked Savings Scheme with a 3-year lock-in period to your portfolio. With all the features and advantages of an ELSS fund, it’s time you experience the benefits of investing your money with an aim to achieve risk-adjusted returns through QTSF.

5 Reasons why you should invest in the Quantum Tax Saving Fund:
1. It follows a disciplined research and investment process.
2. Consists of a well balanced portfolio - typically 25 to 40 stocks, across various sectors.
3. It has a lock-in period of 3 years which helps to reduce portfolio churn as the fund manager does not need to re-adjust the portfolio to meet frequent redemptions.
4. Minimizes risk by pursuing a bottom-up stock selection approach.
5. Holds cash when stocks are overvalued - no derivatives and no hedging is included.
So, make the most of the time you have. Do your research & consider investing in the Quantum Tax Saving Fund to save tax under Section 80C and aim to achieve long term capital appreciation.

It’s time to not just save but give your money the opportunity to grow.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Quantum Mutual Fund has over 14 years of experience into mutual funds and puts the needs of investors like you first. Invest in different types of schemes & start an SIP with Quantum Mutual Funds today! Quantum Mutual Fund believes in sustainable growth built with integrity & transparency and are trusted by over 50,000 active investors to achieve their wealth creation goals. Our aim is to generate sensible, risk returns for your investment horizon.