There are very few investments options in which attractive returns are found with tax-savings. Both these benefits are found in the tax-savings scheme of mutual funds. The tax-savings scheme of mutual funds is also called Equity Linked Savings Scheme (ELSS). This Income Tax Act comes under section 80C of 1961. This means that in this scheme, a tax deduction can be claimed by investing Rs 1.5 lakh in a financial year.
Lock-in period of 3 sol in ELSS
It has to be kept in mind that ELSS comes in the category of the equity scheme of mutual funds. Since, this is a tax savings scheme, which has a lock-in period. ELSS’s lock-in period is 3 years. This means that only after three years of investing in this scheme, you will be able to withdraw your money. The lowest lock-in period is ELSS of all tax-sewings schemes under section 80C.
Benefits of deduction under section 80C
In ELSS, you can invest from SIP every month. If you invest Rs 10,000 every month from SIP, then you will invest Rs 1,20,000 in the ELSS scheme in a year. On this you will be able to claim deduction under section 80C. The return of the ELSS scheme is very good in the long term. Therefore, this scheme helps to save tax on one side and on the other hand a large fund is prepared by investing in the long term.
SIP of just Rs 10,000 made millionaires
Moneycontrol is telling you about three such ELSS, which has made investors a millionaire from SIP of just Rs 10,000. But, it is important to know that if you use the new regimen of income tax, then you will not get the benefit of deduction by investing in ELSS. Decisions are available only in the Old Regime of Income Tax. Therefore, if you use Old Rizim, then only you should invest in ELSS.
Kotak’s Tax Savings Scheme started in 2005
Kotak ELSS Tax Saver Mutual Fund has such a tax saving scheme, which has made investors a millionaire by investing just Rs 10,000. The scheme began on 23 November 2005. If you had started a SIP of Rs 10,000 every month at the start of the scheme, then your investment would have increased to Rs 1.10 crore in October last year. This means that by investing 22.8 lakh rupees in 19 years, your money would have increased to more than one crore rupees.
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Quant’s scheme has given 17% returns in 18 years
Quant ELSS Tax Saver Growth Fund has also made investors millionaires. The scheme started in April 2000. The return of this scheme has been 19.49 percent in the last 10 years. The annual return of this scheme in the last 18 years has been 17.56 percent. In this scheme, SIP investment of Rs 10,000 every month would have increased to Rs 1,29,596 in 18 years. This scheme is among the highest returns schemes of ELSS.