equitytaxlinkedsavingsschemes

An Equity Linked Savings Scheme (ELSS) is an investment scheme, similar to a mutual fund. Per Section 80C, an investor can invest upto Rs. 1,00,000 into equities, and deduct this investment, against his/her income while calculating his/her tax.

ELSSs do not allow withdrawals, during the first three years. Some of the advantages of ELSSs are:

• • allows for investments in capital markets

  • provides tax savings

  • lock-in period, may provide the investor with benefits of capital appreciation, over the long term, while protecting the investor for market volatility over the short term

  • most fund houses that allow ELSSs allow for investment using Systematic Investment Plans. Hence investors can invest as little as Rs 500/- a month, into these schemes

  • lowest lock-in periods amongst all tax savings schemes under Section 80C (ie. NSC, PPF, Infrastructure Bonds, ELSS, ...)

Some of the ELSSs are:

• Birla Equity Plan

• Birla Sun Life Tax Relief 96

• Canequity TaxSaver

• Fidelity Tax Advantage Fund

• Franklin India Taxshield Funds (Closed Ended Funds)

• Franklin India Taxshield Fund

• HDFC Tax Saver Fund

• ICICI Prudential Tax Plan

• Principal Tax Saving Fund

• Reliance Tax Saver Fund

• SBI Magnum Tax Gain Scheme 1993

• Sundaram BNP Paribas Taxsaver

• Tata Tax Saving Fund