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Choosing an ELSS Fund

Investments in Equity Linked Savings Scheme (ELSS) qualify for tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act

I would like to start investing in Equity Linked Savings Scheme (ELSS) from April 2016. Should I invest in ELSS in SIP mode on monthly or quarterly? Also please suggest some ELSS funds. I want to invest ₹1.3 lakh in them in the next financial year.
- Senthil Kumar

Investments in Equity Linked Savings Scheme (ELSS) qualify for tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. These schemes invest mostly in equity and they have a lock-in period of three years. However, it would be better to have an investment horizon of at least five years while investing in them.

Investing through a Systematic Investment Plan (SIP) is a disciplined approach to regular investing. You should base the frequency of your SIP contributions on your convenience and cash flows. There is nothing to prove that a monthly SIP is better than quarterly SIP or otherwise. Most salaried individuals opt for a monthly SIP because it is a convenient option and it also imparts financial discipline.

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