Facebook Twitter Instagram
    Kmaa 8
    • Home
    • Business
    • Technology
    • Health
    • News
    • Beauty Tips
    • Lifestyle
    • Social Media
    Kmaa 8
    Home»Business»Why You Should Invest in Tax Saver Mutual Funds
    Business

    Why You Should Invest in Tax Saver Mutual Funds

    GpostingBy GpostingNovember 1, 2022No Comments3 Mins Read

    Tax saver mutual funds are one of the wisest investments of your hard-earned money. Remember, investing is not about depositing a fixed monthly amount in your account just to save some bucks. A proper plan to exponentially grow your wealth is very important. 

    In order to have a stable financial life, it is essential to have a sound financial execution plan. In simple terms, financial planning is analyzing your current economic scenario and accordingly constructing a plan to reach your desired goals. However, apart from long-term planning, which we all do, if you are even planning a short-term goal, one of the best investments is the best performing mutual funds.

    What are tax saving mutual funds? 

    Now, I’m pretty sure about the fact that many of you might not know that you can actually save on taxes by investing in mutual funds. Equity Linked Savings Scheme (ELSS) is a special category of mutual funds that allows you to save tax by simply investing in them. Apart from ELSS, even SIP helps you save taxes, so going for the best mutual funds for SIP is another way. 

    What is ELSS?

    ELSS is an open-ended tax saver mutual funds that invests in the stocks of various companies. It has a lock-in period of three years. This is because the more you retain your investment in it, the more your chances of making money.

    So if you wish to save tax, you’d have to invest in an ELSS, where your invested amount would remain locked for three years.

    How does investing in ELSS help in saving tax?

    According to Section 80C of the Income Tax Act, 1961, by investing in an ELSS, you can claim your investments in the fund in a financial year as deductions from your total income for that year.

    For example, I invested Rs 1 lakh in an ELSS during the recent financial year (2021-2022) so that I can deduct the amount of Rs 1 lakh from my total income for that year. This section further states that the maximum amount one can claim as deductions in a single year is Rs 1.5 lakhs. 

    The profits you gain at the end of ELSS’s maturity are categorized as Long Term Capital Gains (LTCG). These are taxed at 10% flat rate. Now, the LTCG above Rs 1 lakh in a year is only liable for being taxed, so there would be no tax if it is below it.

    (Remember that the best mutual funds are those which help you build your wealth.) 

    How to invest in ELSS? 

    I invested in ELSS via the Bajaj Finserv application, which I generally use for digital payments, such as broadband and mobile recharge. So I’ll share my personal experience, and here is a step-by-step guide for your reference –

      1. Download the Bajaj Finserv Application from the Play Store or App Store. 
      2. Sign up with your personal details.
      3. On the home page, you’ll see ‘Investment Bazaar.’
      4. Here, go on ELSS
      5. Choose the plan according to your requirement

    So, all-in-all, investment is not about searching for the best mutual fund to invest today’ on your search engine and just going for it. It is very important to carefully research and do your groundwork before investing.

    Gposting

    Related Posts

    JiT Home Buyers is a Reliable Cash Home Buyer in the State of California

    September 22, 2023

    How to Determine Your Savings Target: Expert Advice and Insights

    September 3, 2023

    How to Manage Your Projects Efficiently as a Freelance Marketer In Five Tactics

    August 31, 2023

    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    Recent Posts

    JiT Home Buyers is a Reliable Cash Home Buyer in the State of California

    September 22, 2023

    Nancy Pelosi Net Worth: Unraveling the Finances of the Speaker of the House

    September 14, 2023

    Sculpting Success: Unveiling Data-Driven Advertising Approaches for Fitness Apps

    September 11, 2023

    An Overview of Tom Hanks’ Endorsement Deals and How They Contributed to His Net Worth

    September 11, 2023
    Categories
    • All
    • App
    • Automobile
    • Automotive
    • Beauty Tips
    • Blog
    • Business
    • Digital Marketing
    • Education
    • Entertainment
    • Exercise
    • Fixed Deposit
    • Food
    • Games
    • Health
    • Home Improvement
    • Law
    • Lifestyle
    • News
    • Product
    • Social Media
    • Software
    • Sports
    • Technology
    • Travel
    • Website
    Kmaa 8
    • Privacy Policy
    • Contact Us
    Kmaa8.com © Copyright 2023, All Rights Reserved

    Type above and press Enter to search. Press Esc to cancel.