Always wanted to invest in tax-saving instruments but not satisfied with the return generated on traditional tax-saving investments like tax-saving fixed deposits?
Allow us to tell you about Equity Linked Saving Scheme Mutual Funds, that help you get market-based returns and also save tax under Section 80C of the Income Tax Act.
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What Are ELSS Mutual Funds?
ELSS mutual funds were introduced as a new category of mutual funds in order to encourage investment in equity securities in the middle class. ELSS mutual fund is the only category of mutual funds wherein investment is tax-exempt under Section 80C of the Income Tax Act. In accordance with the SEBI regulations, all ELSS mutual funds are required to invest at least 80% of their investment corpus into equity securities.
How To Invest In ELSS Mutual Funds?
Investing in ELSS mutual funds can now be done in a digital manner without any kind of paperwork. New-age investment apps such as Kuvera allow individuals to invest in ELSS mutual funds within minutes.
Benefits of Investing In ELSS Mutual Funds Digitally
1. Zero Commission Plan
Direct MF platforms like Kuvera do not charge you any commission or brokerage for facilitating investment in ELSS Mutual Funds. Typically each mutual fund has two schemes direct and regular. Regular schemes are distributed/sold through a broker whereas direct schemes are available on zero commissions investment platforms such as Kuvera. In the case of regular schemes, the expense ratio (fee charged by the mutual fund to the investor yearly) is as high as upto 2% whereas typically the expense ratio in case of direct schemes is around 0.1%. Direct schemes have a lower expense ratio because there is no brokerage being paid to the middleman.
2. Tax Exemption
Investment in ELSS mutual funds is tax-exempt upto a limit of INR 1.5 Lakh. Further, in the case of ELSS mutual funds, the long-term capital gains tax rate is 10% of the gain you make at the time of selling the mutual fund units.
3. Convenient Process
As mentioned earlier, investment in ELSS mutual funds through apps like Kuvera can be done within a few minutes. All you need to do is download the app from Play store or App Store, sign up, and complete your KYC using Aadhaar. Now you can select the ELSS mutual funds you intend to invest in. Kuvera displays all essential information in relation to each ELSS mutual fund such as past returns, fund manager, investment objective, investee companies etc.
India’s first Zero Commission Mutual Fund Investment Platform
Kuvera was founded by Gaurav Rastogi, former portfolio manager at Morgan Stanley and a graduate of Booth School of Business and IIT Delhi and Mr. Neelabh Sanyal, former Vice President with Axis Capital and a graduate of IIM Ahmedabad. Kuvera is a registered investment advisor (RIA) with the Securities and Exchange Board of India. It is considered to be a pioneer among zero-fee MF investing platforms in India, and has been a key reason for growth of direct MF investing in the country. In addition to mutual funds, Kuvera also offers FDs, Indian and US stocks as investment options.
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