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Key things to keep in mind before investing in ELSS

Benefits of Equity-Linked Saving Schemes

1. ELSS is a tax saving mutual fund scheme offered by the mutual fund companies to retail investors. 2. Tax Exemption up to ₹1,50,000 u/s 80C of the Income Tax Act, 1961 3. The fund of the investor is invested in the listed equity shares. 4. The returns are higher than traditional schemes and dependent on market performance. 5. Dividends earned on these funds are Tax Free 6. Option for monthly investment as SIPs – minimum ₹500 per month 7. There is a minimum lock-in period of 3 years.
Things to keep in mind before investing in ELSS

1.Lock-in Period - Since, the ELSS has the shortest mandatory lock-in period of 3 years and therefore, investors with short term view tend to pull back their funds just after the ending of lock-in period, which is not advisable. The investment made in an ELSS should not be considered as a long-term investment and one should be ready to invest for at least five to seven years.

2.Risk Factor - The fact that puts off most of the…

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