Many of us leave the big task of tax planning for the month of March. With dual benefits of tax saving and potential wealth creation, ELSS can come to your rescue! Listen to Hariharan from Axis Mutual Fund talk all about ELSS in this exciting episode.
[00:00:00] Welcome to Axis Moneynomics by Axis Mutual Fund
[00:00:13] Since morning, I am seeing my colleague Manish frantically calling up relationship managers of mutual fund companies.
[00:00:20] I went up to him and asked what's the matter? Why do you look so anxious?
[00:00:25] Manish said that today is the last day of submitting the income tax proof to the HR department.
[00:00:31] And he wanted to invest in an yearly suspend to save tax.
[00:00:35] He was very eager to find out when he can get that income tax statement which he can submit as an investment proof to the HR department and save some tax.
[00:00:45] I think this is a very common sight at this time of the year.
[00:00:48] Many individuals have one of the biggest task of tax planning in the month of March.
[00:00:54] I am sure you guessed the topic for today's podcast.
[00:00:59] Hello and welcome to another exciting episode of Axis Moneynomics.
[00:01:05] This is Hariran from Axis Mutual Fund and today we are going to simplify tax planning with ELSS funds.
[00:01:21] Before we dive deep into tax planning with ELSS,
[00:01:24] if you want a quick refresher on the basics of tax planning like how to file taxes in the old regime and the new regime,
[00:01:31] various tax directions etc. check out our previous episode on taxes.
[00:01:36] Now let's come back to ELSS.
[00:01:38] ELSS stands for Equity Linked Saving Scheme.
[00:01:42] Let me try and explain ELSS funds with yoga.
[00:01:45] Just like yoga benefits once mind and body,
[00:01:49] ELSS fund is a special type of equity fund that not only helps you to potentially grow your wealth
[00:01:56] but also provides tax benefits under section 80c of the Income Tax Act.
[00:02:02] ELSS funds have gained a lot of popularity among investors
[00:02:06] because of this dual benefit of potential wealth creation and tax saving.
[00:02:11] Let us understand ELSS funds with yoga.
[00:02:14] Yes, you already tried ELSS funds with yoga.
[00:02:18] Like yoga that helps detoxify your body,
[00:02:22] ELSS funds help us to detoxify your tax burden.
[00:02:26] As mentioned earlier, ELSS funds offer tax deduction under section 80c of the Income Tax Act 1961
[00:02:35] helping you reduce your taxable income and save more for your future.
[00:02:40] All of us know that yoga is a long term practice that yields health benefits worth periods of time.
[00:02:47] Similarly, investing in ELSS funds also offers investors an opportunity to create wealth over periods of time.
[00:02:55] ELSS funds are mandated to invest a minimum of 80% in equity and equity related instruments.
[00:03:04] Now since these funds offer tax benefit, please remember they have a compulsory lock-in of minimum 3 years.
[00:03:12] But the good thing is, amongst all the financial instruments that are available for tax deduction under section 80c,
[00:03:20] ELSS mutual funds have the shortest lock-in period just 3 years.
[00:03:26] Not only that, ELSS mutual funds offer tax deductions of up to Rs. 150,000 per financial year under section 80c provision.
[00:03:36] The good thing again is that there is no upper limit that an investor can invest in ELSS.
[00:03:42] Like any other mutual fund, you can invest in ELSS mutual funds either through the lump sum mode or through the SIP mode.
[00:03:51] SIPs always are a very prudent way towards early tax planning.
[00:03:57] But please remember that every SIP installment in an ELSS fund has to compulsorily complete 3 years before they become available for redemption.
[00:04:08] ELSS funds can also be a potential wealth creation tool and not just be an instrument to save taxes.
[00:04:16] Investors can use ELSS funds to create potential wealth for some of their longer term financial goals like retirement or even children's education.
[00:04:27] To sum it up, ELSS mutual funds are not just about saving taxes.
[00:04:32] It is also about creating potential wealth in the long run subject to market conditions.
[00:04:39] Doesn't it sound like having your cake and eating it too with a cherry on top?
[00:04:45] And that brings us to the end of this episode of Axis Moneynomics.
[00:04:51] Thank you for tuning in.
[00:04:52] If you found this episode helpful, don't forget to subscribe and feel free to share it with your friends who are exploring the world of investing.
[00:05:02] Remember to follow our podcast Axis Moneynomics so you don't miss out on interesting topics.
[00:05:10] Until then, this is Hariran signing off.
[00:05:14] You just listen to the Axis Moneynomics podcast by Axis Mutual Fund.