123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

Why Elss Tax Saving Mutual Funds Are Suitable For Long Term Financial Goals

Profile Picture
By Author: Quantum Mutual Fund
Total Articles: 49
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Tax planning is usually done during the last three months of the financial season. Nevertheless, it is good if you plan it during the beginning of the financial year and avoid the rush of last-minute tax savings. Several options qualify for a deduction u/s 80C of the income tax act. One such option is the ELSS tax saving mutual fund that offers twin benefit of tax saving and wealth creation due to the equity component.
Equity-Linked Saving Scheme (ELSS), also referred to as the tax-saving funds, falls under the diversified category of mutual funds. As per SEBI categorization, they invest a minimum of 80% of the total assets in equity and equity-related instruments.
ELSS tax saving mutual funds have a relatively better long-term wealth-building potential than other range of tax-saving instruments such as life insurance premiums, PPF, NPS, NSC and others. Along with being one of the popular tax-saving instruments among the 80C tax-saving provision, ELSS (Equity Linked Savings Scheme) can also be an efficient investment option to achieve long-term financial goals, provided you invest for atleast 3-5 years.
Another ...
... advantage that ELSS tax saving mutual fund offers over other tax-saving avenues is the lowest lock-in period of three years from the date of investment. This gives the flexibility to investors to redeem or switch from their investments should they need. However, it must be noted that to enable the potential of wealth creation, investors should not redeem as soon as the lock-in is complete and stay invested for a longer term until his financial goals are achieved.
How much tax can ELSS tax saving mutual funds provide? While the actual tax benefit will vary between investors, you will be eligible for tax benefit if upto Rs.1.5 lakhs a year.
If you are looking for higher returns in ELSS tax-saving mutual funds of 2021, examine not just the tax-saving mutual funds of 2020, but look at the historical returns across market cycles. Also, you can look at a direct plan option if you are looking for a lower expense ratio and thereby provide you with better returns over the long-term. Most fund houses offer a minimum investment amount of Rs. 500 that you can start as an SIP. Investors need to note that each SIP in a mutual fund has a lock-in of three years.
If you are looking to achieve your long-term financial goals and save tax to yet to reach the threshold limit of ₹1.5 lakh Section u/s 80C annual limit, these tax-saving mutual funds can be a good option to consider.
Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

More About the Author

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. Quantum Mutual Fund - Start an SIP in different asset class funds

Total Views: 214Word Count: 671See All articles From Author

Add Comment

Investing / Finance Articles

1. The Rise Of Investment Banking Companies In Hyderabad’s Financial Scene
Author: Verity knowladge solutions

2. Globe Civil Projects Ipo Gmp 2025 | Price Band ₹67–71, Dates & Gmp ₹0
Author: finowings

3. Investing Ira Gold, California: Gold Ira Investment
Author: Gold and Silver Investment News

4. Expert Accounting Services In South Auckland: Supporting Growth In Manukau And Beyond
Author: WhizBiz

5. A Short Guide To Turn Your Pension Into An Annuity In The Uk
Author: Finance Advisor

6. Globe Civil Projects Ipo: Key Dates, Price Band & Gmp
Author: finowings

7. Why Hyderabad Is The Best City For First-time Homebuyers In 2025
Author: anilsinhaanni

8. Top Crypto Security Trends In 2025: What Every Investor Must Know?
Author: Xiaou Princess

9. Term Loan Vs Line Of Credit: What Hyderabad Businesses Should Know
Author: anilsinhaanni

10. How A Certificate Course In Retail Can Open Doors To High-paying Jobs
Author: sandeep

11. Leveraging Technology: How Virtual Cfos Utilize Tools For Financial Analytics
Author: Dipanjan Das

12. Top Features To Look For In A Stock Trading Platform
Author: Aman Kumar

13. Top Trade Credit Finance Solution Providers: A Substantial Guide For Businesses
Author: Merchant

14. Top Benefits Of Investing In Property Through Your Super In Australia
Author: Rick Lopez

15. The Effect Of Fee Structures On Investment Returns Over The Years
Author: Amit

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: