Skip to main content

Plan to Save Taxes by Investing in ELSS Funds

 
Online Investing in ELSS Funds

The month of December is the Fourth quarter of the financial year. This means you will have only 6 months left in the year to invest in tax-saving instruments like ELSS funds. But a lot of people will think that even 6 months is a lot of time.

Generally, tax-savers tend to make their tax-saving investments only in February and March when they have to submit investment proofs. But those investments will be made in haste and might not turn out to be as meaningful as they should be. The purpose of tax-saving investments in ELSS funds shouldn't be only to save taxes, they should be used to achieve long-term financial goals as well.

This is why you need to plan out your investments well before the due date of 31st March. Ideally, you should begin investing at the start of a new financial year itself, but don't be concerned if you didn't do that. You can still make use of the coming 6 months to fulfill your tax-saving obligations and get the best out of your ELSS fund investments.

The first thing you should do is figure out how much of the Rs 1.5 lakh Section 80C limit you have to invest in ELSS funds. To do this, you need to first look at the 80C deductions that you are already putting money in. These include your annual life insurance premium, PPF contribution, home loan principal repayment, children's school tuition fees, etc. These are the investments and expenses you make anyway and once you have information about them, you will be able to see how much of the Rs 1.5 lakh is left to invest in ELSS funds.

Let's suppose you have Rs 1 lakh of the 80C limit left to invest in ELSS funds. The mistake you shouldn't make here is investing that entire amount in one go. Equity-based investments earn higher returns when they are spread out over a period of time. This is why systematic investment plans (SIP) are recommended by below. What you should do is divide the amount you want to invest in ELSS funds for this financial year into 6 parts and invest it every month from October to March. This will allow you to benefit from rupee cost averaging and purchase fund units at different levels of the market. It will also allow you to make sure that you don't catch a market peak.

Once you have the exact amounts to be invested, you can split it across more than one ELSS fund to benefit from diversification and different investment styles. A portfolio of 3 ELSS funds would be ideal for most tax-savers. Pick ELSS funds on the basis of their historic performance. A fund that has done well over different market cycles would be best placed to navigate the uncertainties of the equity markets in the future. Furthermore, investing in more than one fund cushions your portfolio against the underperformance of any one of your funds.

Of course, before you invest in ELSS funds, you need to understand that they don't guarantee returns. These tax-saving mutual funds invest in equities and are susceptible to equity-related risks. But they make good investment options because they have a lock-in of only 3 years and the equity exposure can help beat inflation in the long run.

ELSS funds should be a part of most tax-savers' investment portfolios. When your investments in them are properly planned out, they provide the dual benefit of tax saving and long-term wealth.







------------------------------------------
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 4 Tax Saver Mutual Funds for 2017

Best 4 ELSS Mutual Funds to invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. BNP Paribas Long Term Equity Fund



Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact Prajna Capital on 94 8300 8300

--------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Call us on 94 8300 8300

---------------------------------------------

 

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

ICICI Prudential Balanced Fund

 ICICI Prudential Balanced Fund scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent. An impressive show in the last couple of years has propelled this fund from a three-star to a four-star rating. The fund has traditionally featured a high equity allocation, hovering at well over 70 per cent, which is higher than the allocations of the peers. But in the last one year, the allocation has been moderated from 78-79 per cent levels to 66-67 per cent of the portfolio. ICICI Prudential Balanced Fund appears to practise some degree of tactical allocation based on market valuations. Within equities, well over two-thirds of the allocation is parked i...
Read more

SBI bonds FAQ

  Maximum retail subscription and over – subscription There is a lot of excitement around these bonds, so I won't be surprised if they get over-subscribed on the first day itself. So, I thought Sameer asked a very good question about over-subscription. Here is that discussion. Here are some other questions that you may find useful. Can I trade the SBI bonds on NSE after it lists? Yes, these can be traded after listing. Where can I get the application forms, and can I buy the bonds online? You can get the application from notified branches, and then fill it up there and submit it. To the best of my knowledge, there is no way to invest in them online, but if anyone knows otherwise then please leave a message, and let us know. Can NRIs apply for these bonds? NRIs can't apply for these bonds as they fall under one of the ineligible categories. Can you take a loan by keeping the SBI bonds as security? The terms of the issue in the prospectus state that the bank shall no...
Read more

Gold: It is safe & secure

RETURNS ON GOLD & ITS ETF’s RISE WHILE most of the popular asset classes are going through bad times, the yellow metal shines on. In fact, in the last one year, gold has given a return of more than 25% and currently trades at Rs 14,695 per 10 gm. Even gold exchange traded funds ( ETFs ) have appreciated substantially. Gold Gold Benchmark Exchange Traded Scheme ( BeES ) and Kotak Gold ETF have given more than 25% returns each in the last three months. Even as the equity markets have taken a hit with the Sensex losing around 46% in the last one year and real estate prices also witness a correction, investors’ preference has shifted to safe havens such as gold. On an average, most of the diversified equity mutual funds have fallen and real estate developers are offering discounts. Thus gold remains the safest bet. The appreciation in the gold prices is mainly due to its safe haven status. The key reason for gold to go up is lack of other investment opportunity. There is also a risk in...
Read more

More on Mutual Funds

What Is a Mutual Fund ? A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Anybody with an investable surplus of as little as a few thousand rupees can invest in Mutual Funds. These investors buy units of a particular Mutual Fund scheme that has a defined investment objective and strategy The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme's stated objectives. The income earned through these investments and the capital appreciation realized by the scheme are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.   What Are The Types of Mutual Fund Scheme...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now