Prajna Capital - An Investment Guide

IT ISthat time of the year when employees have to submit proof of having made tax-savings investments to their employers. With tax season around the corner, here are 10 reasons for you to consider equity-linked savings schemes ( ELSS ). Why invest in ELSS funds? All investments in ELSS are eligible for tax benefit under Section 80C of the Income-Tax Act, subject to a ceiling of up to Rs 1 lakh a year. ELSS funds invest in equities, and equities as an asset class are known to give higher returns over a longer period against, say, debt or fixed income instruments. Does ELSS score over NSC, PPF? An investment in ELSS is locked in for a mere three years against six years in post office schemes such as national savings certificates ( NSC ) and 15 years in public provident fund (PPF) scheme from the date of opening with compulsory contribution every year. However, returns from ELSS are linked to the performance of stock markets, while that of NSC and PPF are currently fixed at 8%. Dividend i...