These schemes are equity-oriented schemes and are particularly designated as tax saving mutual fund schemes generally known as equity-linked financial savings schemes (ELSS).
Many tax saving mutual fund schemes provide tax deduction underneath section 80C of the Income Tax Act, for investments up to Rs 1,50,000 in a financial year.
Although tax profit is offered for investments up to Rs 1.5 lakh solely, one can make investments more than Rs 1.5 lakh for the aim of wealth creation by means of equity investments. These investments will also be made within the type of month-to-month SIP installments as an alternative of a lump sum funding.
To invest in a mutual fund scheme, the investor must be KYC compliant. If the investor is KYC compliant, he can refill a physical form together with the cost instrument or could make online funding within the fund of his selection.
Cut off timings
Since ELSS is an equity-oriented fund, all purposes of lower than Rs 2 lakh, if the appliance is submitted earlier than 3 pm on an enterprise day, the NAV of that day (which is calculated and published on the finish of the day) is relevant. If submitted after 3 pm, the NAV of the subsequent enterprise day is relevant. For purposes of Rs 2 lakh and above, the NAV is set on the time when the funds are credited within the fund home’s account.
Equity-linked financial savings schemes have a lock-in interval of a minimum of three years from the date of funding. No redemption or change is allowed throughout this era. The Lock-in period is reckoned on the FIFO foundation in case of a number of investments into the folio over a time period.