Advantages and Disadvantages of ELSS

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What is ELSS (Equity Linked Savings Scheme) funds and their Advantages and Disadvantage?

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Posted by Manjeet
Asked on 2017-07-06 10:30 am
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ELSS mutual funds help you to grow money . By investment in ELSS mutual funds, you are eligible for tax exemption up to Rs 1 Lakh u/s 80C. If you have not utilized 80C fully, this is a good opportunity to invest in ELSS funds. ELSS mutual funds come with lock-in period of 3 years. ELSS returns are tax free: If you observe, none of the returns from tax saving investment options other than PPF are tax free. ELSS mutual funds invest in equity related instruments, these are classified under equity funds. Disadvantage is market condition is always fluctuating, no one can guarantee returns after some years. In such cases you must be patient & withdraw your money when market is on high. Thanks.
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Posted by Guest
Answered on 2017-08-05 12:26 pm
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ELSS makes it self-explanatory that it is a equity based mutual fund. Basically a tax saving mutual fund that helps you avail tax deductions are known as ELSS.

Advantages of ELSS are, a minimum lock-in of just 3 years which is considerably less in comparison to other tax saving schemes such as Tax saving FD where lockin period is 5 years. Earnings once you done with the lock in period are 100% tax free. The power of compounding will help you earn in multiples of your principal amount. There is no maximum limit to invest.

Disadvantages of ELSS are, There are no guaranteed returns, as this is an equity based mutual fund which makes it subject to market returns . There is also no premature withdrawals that are allowed.
Always keep in mind that ELSS is the only mutual fund that holds the potential to generate massive returns. Thanks.

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Posted by sharthak (Questions: 0, Answers: 4)
Answered on 2017-07-08 2:19 pm
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