Section I: Income Tax and Your Investments

• Ques: ELSS offers highest return amongst tax saving options
• Ans: Key points:
  • An ELSS is a diversified equity mutual fund scheme.
  • It gives you highest return on your investment out of the tax saving instruments available.
  • ELSS is good for those want high return / high risk from equity market with tax saving and do not require life insurance.
  • The investments in ELSS are locked for minimum 3 years.
  • The cost is less than ULIP as the life cover is not provided hence no mortality charges.
  • ELSS investment can be done monthly, quarterly, half yearly or annually.
  • Commission and charges are less as compared to ULIP hence your investment into equity is higher.
  • The lock in period is shorter and returns are higher as compare to PPF / Fixed deposit / NSC.
  • ELSS helps in medium term disciplined investment in equities at lowest cost and assure high return coupled with tax saving while investment 80C plus tax free maturity.