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<ul><li><keyword id="103549" type="General" weightage="20" keywordseo="elss" source="Orion">ELSS</keyword> is an open-ended equity mutual fund that invests primarily in equities and equity-related products. </li><li>ELSS funds have a lock-in period of three years, meaning that investors are not allowed to withdraw their investment before the completion of this term. </li><li>Under Section 80C, investors can claim a deduction of up to ₹1.5 lakh by investing in ELSS funds. </li></ul>If an investor decides to opt for the old tax regime, he/she can still take advantage of the various deductions available to minimise tax outgo. Section 80C, with its plethora of tax-saving investment options, remains a favourite with investors. One of the options to save tax under section 80C is ELSS (equity-linked saving scheme), which is a type of mutual fund that focuses mainly on equities and provides tax benefits to investors, making it a popular investment choice. ELSS funds have a lock-in period of three years, meaning that investors are not allowed to withdraw their investment before the completion of the term. This lock-in period is shorter than that of other tax-saving investments such as the public provident fund (PPF), national savings certificate (NSC), and fixed deposits (FDs). Under Section 80C of the Income Tax Act, investors can claim a deduction of up to ₹1.5 lakh from their taxable income by investing in ELSS funds. This deduction is one of several deductions available under Section 80C. Despite being considered high-risk investments due to their primary focus on equities, ELSS funds have the potential to provide higher returns than other tax-saving investments over the long term. Professional fund managers manage ELSS funds and base their investment decisions on market trends and analysis. “Investment in ELSS is a good option as it gives both tax benefits, as well as good return. A taxpayer saves tax on the amount of investment made. Further the return on such equity investment is better than any investment in debt like FD, bonds etc,” says Ved Jain, founder, Ved Jain Associates, a chartered accountancy firm. Though past performance is not an indication of future returns, ELSS funds as a category have given 9.64% returns over the last 5 years, and 14.58% returns over the last 10 years. Investors have two options for investing in ELSS funds: lump sum or systematic investment plan (SIP). In a lump sum investment, the entire investment amount is made at once, while in an SIP investment, a fixed amount is invested at regular intervals. SIP investments are an excellent choice for investors who want to invest in ELSS funds but do not have a large sum of money available at once. “Investors should look at ELSS as an opportunity to participate in an equity scheme. It should be looked at as an option for creating wealth in a 15-year time frame. Tax saving should be taken as incidental benefit,” says AK Narayan, CEO and founder of AK Narayan Associates, a financial planning firm. Investors can select from various ELSS funds offered by different mutual fund companies. Before investing, it is essential to conduct research and compare the different funds to ensure that they are aligned with one's investment goals and risk appetite.

ELSS Mutual Fund: A way to claim tax deduction while enjoying market-linked returns

<ul><li>Starting your <keyword id="4147449" type="General" weightage="20" keywordseo="tax-investments" source="Orion">tax investments</keyword> early gives you time to do proper <keyword id="136807" type="General" weightage="20" keywordseo="tax-planning" source="Orion">tax planning</keyword> </li><li>When you invest early, your investments get more time to grow and therefore you can reap the benefit of the power of compounding</li><li>Leaving your tax investments for the end of the financial year may lead to rushed tax-saving investments that may not align with your financial goals</li></ul>If you have opted for the <keyword id="8706677" type="General" weightage="20" keywordseo="old-tax-regime" source="Orion">old tax regime</keyword>, you have several tax-saving options to choose from. If you are employed, you would need to make a declaration of your tax-saving investments to your company at the beginning of the financial year, so that the company can factor in your tax rebates while deducting at source. However, you have time till March 31 of 2025 to make those investments, or slightly earlier, when your employer asks for proof. Many of us tend to postpone our tax-saving investments till the last quarter of the financial year. As a result, we might be forced to make rushed decisions before the financial year ends and that is not a wise thing to do. Here is why you should start your tax-saving investments now and not wait any further. Maximising tax savings By initiating your tax-saving investments early in the financial year, you open the door to several opportunities for maximising tax deductions. “Whether it's channelling funds into ELSS mutual funds or committing to long-term fixed deposits, early investment allocation sets the stage for tax savings while simultaneously helping you to invest for future aspirations — be it retirement, educational, homeownership and so on,” says Abhishek Soni, CEO, Tax2Win, an income tax portal. Systematic investment approach Investing in tax-saving instruments shouldn’t just be for the purpose of saving taxes. Your tax-saving investments need to be aligned with your financial goals. Starting your tax investments early gives you time to do proper tax planning. “Through avenues like SIPs (Systematic Investment Plans), you can cultivate a habit of regular contributions, steadily building your investment portfolio over time. This disciplined approach provides financial stability,” says Soni. Also, if you leave your tax-saving investments till the end of the financial year, you may be short of cash and not have enough money to make adequate tax-saving investments. “Starting investments early fosters a culture of prudent saving and investment,” says Archit Gupta, Founder and CEO, Cleartax. Harnessing the power of compounding When you invest early, your investments get more time to grow and therefore you can reap the benefits of the power of compounding. This would apply to any investment under section 80C like a public provident fund (PPF) or equity-linked savings scheme (ELSS). “By initiating investments early rather than later, you facilitate the organic growth of your portfolio over time. This growth not only accrues returns on your principal sum but also compounds returns on the profits accumulated in preceding years,” says Gupta. Suppose you want to invest ₹60,000 in ELSS. A SIP of ₹5,000 for 12 months, will give you more returns compared to investing a lump sum of ₹60,000 in February or March before the financial year ends, where your investment will just start earning returns. Capitalising on incentives For many, April-June is the season of appraisals and incentives — a windfall that can be used for tax planning purposes. Redirecting these bonuses or raises toward tax-saving investments is a wise idea, lest you spend it on something you do not really need. Overall, tax planning should be a constant endeavour throughout the financial year for the long-term success of your financial goals, and should not be a one-time decision towards the end.

Why you should start your tax-saving investments now and not wait any further

The <keyword id="6355302" type="General" weightage="20" keywordseo="rupee" source="Orion">rupee</keyword> was trading in a narrow range against the US dollar in the morning session on Tuesday amid a weak American currency and a muted trend in domestic equities. Forex traders said foreign fund outflows also weighed on the local unit. At the interbank foreign exchange, the rupee opened at 81.95 against the dollar. It touched a high of 81.86 in initial deals. The rupee on Monday settled at 81.92 against the US dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.33, down 0.02 per cent. Global oil benchmark Brent crude futures declined 0.01 per cent to USD 82.72 per barrel. On the domestic equity market front, BSE Sensex was trading 4.41 points or 0.01 per cent lower at 60,051.69 points while the broader NSE Nifty declined 2.40 points or 0.01 per cent to 17,741.00 points. Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 412.27 crore, as per exchange data. "Rupee will remain between the levels of 81.80 to 82.20 as RBI buys dollars at lower levels and inflows continue at higher levels to keep it well boxed in the small range for the moment," Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/personal-finance/news/elss-mutual-funds-enjoy-tax-deductions-under-80c/articleshow/99751058.cms">ELSS Mutual Fund: A way to claim tax deduction while enjoying market-linked returns</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/icici-bank-vs-hdfc-bank-how-indias-top-two-private-lenders-have-performed-in-q4/articleshow/99733618.cms">ICICI Bank vs HDFC Bank: How India’s top two private lenders have performed in Q4</a>

Rupee moves in narrow range against US dollar in early trade

<ul><li>How to save <keyword id="45031" type="General" weightage="20" keywordseo="tax" source="Orion">tax</keyword> while investing wisely is a crucial part of every working person’s life.</li><li>Let’s make it easy for you and here are a set of options to spread your investments for <keyword id="35453" type="General" weightage="20" keywordseo="tax-saving" source="Orion">tax saving</keyword> purposes.</li><li>Check out our <a href="https://www.businessinsider.in/bi-newsletter">weekly explainers</a> on the hottest topics and <a href="https://www.businessinsider.in/newsletters_signup.cms">sign up</a> if you like them</li></ul>The best time to start your tax saving investments is at the beginning of a calendar year or a financial year. While tax planning is important, getting aware of all tax saving schemes and choosing the right one is crucial. Tax saving schemes ensure you don’t pay more taxes and make money in the long run by investing in savings-oriented schemes. Here are some of the best tax saving options with a deduction of up to ₹1.5 lakh in your income tax for the year. Here are a few options of tax saving schemes: ELSS Mutual Fund Equity-linked saving scheme (ELSS) is a type of mutual fund scheme that primarily invests in equity funds. ELSS offers tax benefits to investors. The investments in the scheme are eligible for tax deduction under section 80C of the Income Tax Act, 1961 up to a maximum of ₹1.5 lakh. One can invest through both lump sum and systematic investment plans (SIP) to avail the tax deduction. This way, ELSS offers both investment and tax saving benefits. Here are the five top performing ELSS funds in the industry: <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Funds </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% return in last 3 years </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Quant Tax Plan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">37.52% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BOI AXA Tax Advantage </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30.92% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mirae Asset Tax Saver </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26.53% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Canara Robeco Equity Tax Saver </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26.19% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IDFC Tax Advantage (ELSS) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24.54% </td></tr></tbody><tbody></tbody></table>Source: <a href="https://www.valueresearchonline.com/funds/best-tax-savers/?return-period=3Y">Value Research</a> National Savings Certificate (NSC) NSC is a fixed income tax-saving investment plan that you can open with any post office branch. The scheme is an initiative of the government of India and hence is relatively safer. The investment in NSC qualifies for deduction under section 80C of the income tax act of up to ₹1.50 lakh. These certificates earn an annual fixed interest of around 6.8% per annum (revised every quarter by the government), thus guaranteeing a regular income for the investor. The scheme has two types of certificates -- 5-year and 10-year. National Pension Scheme (NPS) NPS is a pension cum investment scheme launched by the government of India to provide old age security to citizens of India. The scheme offers tax saving options to both government and private employees. Any citizen between the age of 18-60 can invest in it. The amount invested by the depositor is invested in several schemes including the equity markets. Again the basic amount of deduction offered by the fund is up to ₹1.5 lakh on the same amount of investment. However, NPS allows one to get an additional ₹50,000 deduction under section 80CCD (1B), taking the overall tax deduction amount to ₹2 lakh. Unit Linked Insurance Plan (ULIP) ULIP is offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. A portion of the premium paid by the policyholder is utilised to provide insurance coverage to the policyholder and the remaining portion is invested in equity and debt instruments. ULIP also provides tax deduction up to ₹1.5 lakh. Here are the top 5 best performing ULIP plans in the industry: <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ULIP plans by insurance companies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% returns in last 3 years </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">PNB MetLife - Met Pension Plus </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">27.40% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">AEGON Life iMaximize Plan - Opportunity Fund </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.40% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bharti AXA Life - Future Secure Pension - Growth Opportunities Pension Plus </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.30% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Future Pension Advantage Plan - Future Pension Active </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.80% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Platinum Edge - Frontline Equity Fund </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.40% </td></tr></tbody><tbody></tbody></table>Source: <a href="https://www.moneycontrol.com/personal-finance/top-performing-ulips">Moneycontrol</a> Public Provident Fund (PPF) PPF is one of the safest <keyword id="381673" type="General" weightage="20" keywordseo="investment-options" source="Orion">investment options</keyword> to start with that can help you secure your retirement and save tax as well. The PPF has a minimum tenure of 15 years with as little as ₹500 to open an account. You can open a PPF account through a post office or in any nationalised bank. Income tax exemptions are applicable on the principal amount invested in a PPF account. The interest rate for PPF is set and paid by the government for every quarter which is currently at 7.1%, more than the savings rate in banks. Taxpayers can claim a maximum deduction up to ₹1.5 lakh. Sukanya Samridhi Yojana This is a small deposit scheme by the government of India targeted for the parents of a girl child as part of ‘Beti Bachao, Beti Padhao’ campaign. The scheme encourages parents to build a fund for the future education and wedding expenses for their female child. Sukanya Samridhi Yojana scheme offers interest rate of upto 7.6% along with tax deduction of up to ₹1.5 lakh. The account can be opened at any post office in India or at a branch of any authorised commercial bank. Home loan If you have taken a home loan to buy a new house, you are also allowed to claim a deduction of up to ₹1.5 lakh under section 80C of the income tax. The deduction can be claimed on the principal amount repaid in the particular financial year. Check your home loan interest certificate for EMI payment details. However, note that even if you put more money i.e ₹1.5 lakh each in any of the above tax saving options like ULIP, ELSS MF, your maximum deduction from taxable income will still be a total of ₹1.5 lakh only. However, investing in NPS can get you an additional ₹50,000 deduction, taking the overall tax deduction amount to ₹2 lakh. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/spicejet-is-finding-difficult-to-survive-with-rising-costs-low-cash-and-new-players-with-deep-pockets/articleshow/88742146.cms">It’s not just COVID-19 ⁠— SpiceJet’s survival is getting challenged by rising costs, low cash, and new players with deep pockets</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/indias-epassport-what-it-is-and-how-to-apply/articleshow/88750026.cms">India’s ePassport — What it is and how to apply</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/shares-of-hinduja-global-solutions-tanks-20-as-street-expected-two-times-the-dividend-announced/articleshow/88751657.cms">IT firm Hinduja Global Solutions tanks as street expected two times the dividend announced</a>

Best tax saving investment options in 2022

We’re days away from the end of the financial year. There’s little time left to plan investments and save taxes. If you’ve clicked through to this article, it’s likely that you’ve fallen short on your tax-saving goals. 
 
You’re probably looking for a quick fix. You need to make an investment, save your taxes under Section 80 C, generate handsome returns—and you need to do all this without getting out of bed. 
 Worry not. Here’s an option for you: buy some <keyword id="103549" type="CITY" weightage="20" keywordseo="ELSS">ELSS</keyword> mutual funds. 
 
Introduction Equity Linked <keyword id="25450" type="UNKNOWN" weightage="20" keywordseo="savings">Savings</keyword> Schemes – ELSS – are diversified equity mutual funds. Your capital is invested in a variety of equity options in the stock market, allowing you to earn market-linked returns on your investments. 
 
Where To Buy 
Mutual funds can be bought from fund house branches, bank branches, agents, and distributors. Since you’re looking for a quick way out of your quagmire, you should go online. In this, you have two options: buy funds directly from the fund house website, or buy them from an online distributor. 
 
What To Buy 
There’s a plethora of ELSS mutual funds, and it’s not easy to decide which one to pick. Most fund houses offer at least one ELSS fund. There are plenty of mutual fund research and analysis websites that offer data on ELSS funds. You can access this data, look at parameters such as long-term returns, research rankings, management fees, investment objectives, etc. Ideally, you should consult experts before making this investment. 
 
How Much To Buy 
Like all mutual funds, ELSS funds can be bought as SIPs or lump sums. Since you’re looking to do a one-time investment to urgently save tax, you should be aware of your investment shortfall and invest up to that limit. You’re allowed to invest to save up to Rs. 1.5 lakh under Section 80 C through one or many of the investment options available, including ELSS funds. 
 
Risks 
ELSS funds are equity investments. Which means that your investment is subject to market risks and you should read all scheme documents carefully before investing. As markets rise and fall, so will your investment value. 
 
Returns 
That said, over the long term, ELSS funds have out-performed most small savings scheme such as PPF. As per the CRISIL - AMFI ELSS Fund Performance Index in December 2016, the ELSS fund category as a whole has generated annual returns of 3.35% in the last year, 16.64% in the preceding three years, 17.71% in five years, and 10.61% in 10 years. In case you find the markets tanking, stay calm, remain invested, and reap long-term, tax-free returns. 
 
Lock-In 
ELSS funds have a lock-in of three years. It means you cannot redeem units whose tenure has been less than three years. This has one significant benefit, which is… 
 
<keyword id="6383566" type="PERSON" weightage="20" keywordseo="Taxation">Taxation</keyword> 
Returns from ELSS funds are tax-free. ELSS funds are equity investments. Equity investments with a tenure longer than one year qualify as long-term investments, and therefore become exempt from capital gains tax. Since ELSS funds have a three-year lock-in, they are automatically tax-exempt. 
 
 
(The writer is CEO, BankBazaar.com)

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