How much tax can we save by investing in ELSS Mutual Funds?

Rs 46,800up to Rs 46,800 (tax deductions of up to Rs 1,50,000) a year in taxes by investing in ELSS, which is covered under Section 80C of the Income Tax Act, 1961.

How much should I invest in ELSS to save tax?

How much to invest in ELSS? There is no capping on the investible amount with ELSS. However, the tax benefits are capped at Rs 1,50,000 a year. You may first consider making full utilisation your Section 80C limit by investing Rs 1.5 lakh a year.

How much is tax on ELSS?

Currently, returns on ELSS schemes are taxed at 10% (without indexation benefit) if they exceed Rs. 1,00,000 in any financial year. The reintroduction of LTCG Tax (Long Term Capital Gains Tax) caused a lot of confusion to ELSS investors.

Can I invest more than 150000 in ELSS?

There is no legal restriction on the maximum amount invested in an ELSS, though the deduction under Section 80C is limited to Rs 1.5 lakh only.

Can I invest in multiple ELSS for tax saving?

You may consider investing in two or three ELSS funds. However, you may avoid investing in multiple ELSS funds as you could struggle to monitor your investment. You may avoid investing in five or six ELSS funds as it may result in an overlap of your portfolio.

Can I save tax more than 1.5 lakh?

Taxpayers can save additional tax by investing up to ₹ 50,000 in NPS. This is over and above the benefit, they can claim on contributions under Section 80c. They also have the option of utilizing NPS for the ₹ 1.5 lakh limit of Section 80c. This combination will take total deduction one can claim with NPS to ₹ 2 lakh.

Is ELSS taxable after 3 years?

After the 3 year lock-in period, the investor has redeemed the ELSS at Rs 3 lakh where, as per the above criteria, Rs 1.5 lakh will be exempted from tax. Thus, taxable income after deduction of Rs 1.5 lakh from Rs 3 lakh equals Rs 1.5 lakh.

Is ELSS better than PPF?

However, PPF offers much lower returns over a longer time horizon than ELSS. The tax benefits and capital safety are more in favour of PPF; ELSS certainly is an option for better returns. It depends on whether you have the appetite for market volatility or not.

Which is better ELSS or NPS?

ELSS funds are good for both short term and long term goals. Also, they offer higher returns than NPS. However, they have a higher risk than NPS too. Unlike NPS, ELSS funds have a lower lock-in period of 3 years, and investment qualifies for tax deduction under 80C.

Can I withdraw ELSS after 3 years?

If you have made your ELSS Mutual Fund investment via the lump sum route, i.e., at one go, all your units will be allotted on the same day. And therefore, once the 3 year lock-in period is over, you can redeem your entire ELSS investment in one go.

Can I claim ELSS every year?

Tax deductions under Section 80C can be only claimed during a financial year, i.e. if an individual invests in an ELSS Fund in July 2015, deductions can be claimed for the financial year 2015-16.

When should you not invest in ELSS?

When You Shouldn’t Invest in ELSS Funds

If your investment horizon is only 3 years. …
If you are sensitive to short-term loss and your portfolio losses, give you sleepless nights. …
If you get carried away with information and news flows. …
If you are looking for guaranteed returns in a short time.

Should I invest in ELSS every year?

Many financial wizards believe it is a great idea to sell ELSS investments as soon as the lock-in period is over and invest the money again in an ELSS to claim the tax benefits under section 80C. As you know your investments in an ELSS qualifies for a tax deduction of up to Rs 1.5 lakh in a financial year.

Which ELSS should I invest in 2021?

Table of Best ELSS Funds for 2021:

Fund Name	Returns (%)
ICICI Prudential Long Term Equity	54.17	14.33
Motilal Oswal Long Term Equity	59.58	13.20
Tata India Tax Savings	46.96	13.28
Nippon India Tax Saver	59.16	7.97

Can I lose money in ELSS?

Historically, the probability of generating negative returns from ELSS funds has been 6.2%, 0.83% and 0% over 3 year, 5 year and 7-year holding periods respectively over the last 15 years.

Can I invest in ELSS for 10 years?

Features of ELSS Mutual Funds

The fund invests in equity in a diversified manner – across different market capitalizations, themes, and sectors. There is no maximum tenure of investment. However, there is a lock-in period of three years. Tax exemption on the invested amount under Section 80C of the Income Tax Act.

How can I save tax over 10 lakhs?

How to Save Tax for a Salary Above Rs 10 Lakhs?

Reduce Your Taxable Income by Up To Rs 1.5 Lakhs (Section 80C, 80CCC, 80CCD) …
Additional Reduction of Up To Rs 50,000 for NPS Investors (Section 80CCD. …
Reduce Your Taxable Income by Up To Rs 75,000 (Section 80D) …
Reduce Your Taxable Income by Up To Rs 2 lakhs (Section 24)

What are the disadvantages of ELSS?

What are the Disadvantages of ELSS Funds? High risk ELSS Funds: ELSS mutual funds have a huge exposure to equity markets. Equity related instruments are highly susceptible to market volatility. Hence, due to this ELSS mutual funds carry high risk.

Which ELSS is best?

Best ELSS or tax saving mutual funds to invest in 2022: Axis Long Term Equity Fund. Canara Robeco Equity Tax Saver Fund. Mirae Asset Tax Saver Fund.

Can I exit ELSS before 3 years?

Can ELSS be Withdrawn Within 3 years? The simple answer to this question is No. ELSS investments do not provide the option to withdraw the investment amount before the end of the 3-year lock-in period. In ELSS, investors are given fund units against their invested amount.

How can I reduce my taxable income in India?

Here’s a list of popular investment options to save tax under section 80C.

Public Provident Fund.
National Pension Scheme.
Premium Paid for Life Insurance policy.
National Savings Certificate.
Equity Linked Savings Scheme.
Home loan’s principal amount.
Fixed deposit for a duration of five years.
Sukanya Samariddhi account.

Which ELSS fund is best in 2022?

Best ELSS or tax saving mutual funds to invest in 2022:

Axis Long Term Equity Fund.
Canara Robeco Equity Tax Saver Fund.
Mirae Asset Tax Saver Fund.
Invesco India Tax Plan Fund.
DSP Tax Saver Fund.

Which is best tax saving plan?

Best Tax-Saving Investments Under Section 80C

Investment	Returns	Lock-in Period
Public Provident Fund (PPF)	7.1% currently	15 years
Sukanya Samriddhi Yojana	7.60%	21 years
National Savings Certificate	6.80%	5 years
Senior Citizen Saving Scheme	7.40%	5 years

Which mutual funds are tax free?

Long term capital gains upto Rs 1 Lakh is totally tax free. Dividends paid by equity mutual funds are tax free in the hands of the investor but the AMC pays dividend distribution tax (DDT) at the rate of 11.648%.

Which SBI ELSS is best?

The table below shows the top-performing ELSS mutual funds based on the past five year returns:

Mutual fund	5 Yr. Returns	3 Yr. Returns
SBI Long Term Advantage Fund Series IV Direct Plan Growth	—	35.23%
SBI Tax Advantage Fund Series II Growth	25.25%	34.55%
SBI Long Term Advantage Fund Series IV Regular Plan Growth	—	34.51%

How can I save tax on my salary over 50 lakhs?

Tax exemptions can be availed by investing in the following tools:

Senior Citizen Savings Scheme (SCSS)
Sukanya Samriddhi Yojana (SSY)
National Pension Scheme (NPS)
Public Provident Fund (PPF)
National Pension Scheme (NPS)

Is SBI SIP tax free?

Long term capital gains of up to Rs. 1 lakh a year from ELSS mutual funds are exempt from income tax and long-term capital gains above Rs. 1 lakh are taxed at 10%. Corpus generated out of ELSS investment can also be used to fulfil your financial goals.