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  • Category: Investments

    What is ELSS? How is it helpful for investors?

    Searching for information about ELSS? Want to know how it will be helpful for investors? Find solutions to all your answers on this page.

    It is often the news about ELSS investment but I don't know in detail what is ELSS? How is it helpful for investing for people? So, if you have any idea about Equity system then kindly explain in detail. It will be grateful if someone explain step by step.
    Experts: do respond.
  • Answers

    5 Answers found.
  • ELSS means Equity Linked Saving Schemes. They are the investment –savings scheme by mutual funds where the funds in full or part is deployed in equities or shares of companies. ELSS are popular as Tax saver schemes which are given rebate under Income Tax. In them about 65% of the funds are invested in various stocks or equities.
    The ELSS investment are preferred for their tax benefits and also for the shorter lock in period in comparison to the other tax benefit savings like PPF etc. However unlike PPF, NSC , Tax saver fixed deposits tc there is no guaranteed return. It depends on the returns from the invested stocks. There was a time when ELSS gave handsome return also. It is just like investing in other MF products.
    You may have do some homework and select a suitable product from the many products available. It is better to start with an established fund house and product- ie. having a good track record. You may see the historic return. Though it may not hold god for future, it can give some idea. You may choose lump sum investment or SIP.

    Just to give you some example to give initial lead, there are popular ELSS products like Franklin India Taxshield ,ICICI Prudential Long Term Equity Fund,Axis Long Term Equity Fund,Reliance Tax Saver Fund,•IDBI Equity Advantage Fund etc .etc. You may get more details from the financial newspapers, magazines or the brochures from MF houses. You can also get details from the web sites of individual fund houses.

  • ELSS stands for equity linked saving scheme. This can be a really good scheme for those who want to make use of equity investment without risking much of their investment. Though it is invested into equity, the risk horizon is a bit low. ELSS schemes got into popularity as it offered the tax benefits. Like PPF, these schemes too can be a good option to invest into. However PPF has all the debt component. So the ELSS is compared with the NPS which has the similar equity component.

    ELSS is a good option for those who want to invest into the equity in a safe route. Compared to pure equity the funds invested under ELSS are decent. And they are not totally risky like bluechip equity funds. However ELSS has balanced debt component so the risk is mitigated.

    ELSS funds can be a good option for investment instead of PPF as the returns from ELSS often have performed well with equity component. Some of the popular ELSS schemes are from ICICI, AXIS and few other banks. There is also ELSS from fund houses like UTI and few others.

    If you're new to ELSS go with ICICI or AXIS as most of their new ELSS schemes are decent and have a nice track record of returns.

  • ELSS signifies equity linked saving scheme comprising mutual fund schemes where 65 percent corpus are invested in tax - saving schemes. Such schemes do provide tax benifits to the investors under 80 C being capped to max Re 100000/-.
    There are a number of benifits in choosing such schemes for investments. The following points may be considered -
    1) ELSS funds help to grow over a period of time since the major portion of money is invested in equity related instruments which have higher potentials of appreciation in due course of time.
    2) Tax - saving under section 80 C may offer relief substantially.
    3) Lock in period is three years and hence any profit cannot be withdrawn unless there is completion of the time - period.
    Some popular ELSS schemes are SBI magnum, HDFC equity fund, Reliance Tax - saving fund etc.

  • In simple words, ELSS is Equity based saving scheme for minimum of three years locking period. You should definitely invest in ELSS for long term perspective. ELSS helps you to get tax benefits in 80 C. I am investing in Axis Long Term Equity Growth fund. You can get its review from Moneycontrol website and then take decision to invest.

    Dr. Paresh B. Gujarati.
    Mechanical Engineer.
    'I'mprovement always begins with 'I'.

  • The details about ELSS are given below:-

    1. The full form of ELSS is Equity Linked Saving Scheme.
    2. This is an investment vehicle which helps the investor to save tax along with growth of invested amount.
    3. The lock-in period is three years, which is the minimum compared to other tax-saving vehicles.
    4. The growth of invested amount is maximum (compared to other tax-saving vehicles), if we check the five-year data. However, it is more risky than other tax-saving instruments.
    5. A person who is interested in investment in ELSS, must identify the particular ELSS from mutual fund websites, and then start investing in the scheme after completing necessary formalities with the mutual fund house (KYC formalities). The investor is required to visit the office of the mutual fund house at least once.
    6. In case of ELSS, it is not advisable to invest in SIP, unlike other equity mutual fund schemes.

    Beware! I question everything and everybody.

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