What is an ELSS?
This is an equity diversified fund and investors enjoy both the benefits of capital appreciation, as well as tax benefits. An ELSS – Equity Linked Savings Scheme is like a Diversified Equity Fund. It is a type of mutual fund that qualifies for tax exemption under section 80C.
ELSS is an equity oriented mutual fund scheme in which the majority corpus (about 80-100%) is invested in equities. As the allocation is done in equity which are considered as high return assets, the primary aim of such funds is capital appreciation. It has a 3 year lock in period.
Advantages of Mutual Fund ELSS Schemes over other tax saving instruments
1- Income Tax Benefit under section 80 C.
2- Bright Chances of much Higher Returns.
3- Bright chances of Tax free Dividends.
4- Returns are fully exempted from Tax.
5- Relatively shorter lockin period of 3 years.
6- Dividends are Tax Free.
For more information please visit:- http://www.rrfinance.com/Maillers/elss_oct301.html