One can get a sound investment portfolio in various segments over a period of time that helps in achieving goals easily. The one who always fall in tax slab due to increase in income always has an urge to save taxes. People often prefer to invest their income in land, stocks, gold, mutual funds, and own business to earn a good return in a definite period. The investor always checks the pros cons of every investment they have before putting their income in the same.
The gold offers sound liquidity as well it offers a good return after a few years of investment, but when we consider the short run investment, it is not suitable. The other problem with investment in gold is that it has a high-risk factor of stealing and damage to the metal which one must not ignore. It does not help in tax exemption.
The best option offered for the investment of money in a mutual fund is the ELSS, which helps in earning a good return on the amount invested. As the invested amount is blocked for a certain period, it helps to save the tax. In most cases, it provides considerably good returns after a definite period of time on the invested amount. Once the investor fills the form and money are invested, and it is a close-ended option, one cannot take back the money until the said period. Therefore the tax benefits are also offered on the amount invested by the investor.
When the amount is invested in units, it is known as an equity-linked saving scheme; the investor can track the same on the site of the company. How to invest in ELSS is the question that comes in the mind of the person who wishes to get good returns with tax saving.
For investment in a mutual fund, one needs to check the options available and then according to the suitability decides to go for the best one. Almost every Mutual fund company offers ELSS on its list of products, and that’s why an investor chooses it prudently. The invested money growth is measured by the rate of return on is, which is considered as the most important tool in investment. The other options which are checked other than the rate of return are growth and dividend.
Before investing in ELSS, some important points are to be considered. Every company, after getting the approval, have to disclose the ELSS and one can verify it on the company’s site with a registration number. Before investing in a company’s ELSS option, one can compare the various options available with other companies also. There are a dividend, as well as growth options offered by the investment companies in the market with their AUM one, can go through and check as well have a clear picture. Since there are a lock-in period and the period of withdrawal of the invested amount is for 3-5 years, and the same has to be checked by the investor before the investment of the amount.