How to invest in Equity Linked Savings Scheme?

By Kellie S. Tunnell 3 years ago
Equity Linked Savings Scheme: Why ELSS is the best tax-saving investment option - The Financial Express

Equity Linked Savings Schemes (ELSS) are special types of tax-saving mutual funds that invest in equities. These equity-based funds can give you a tax deduction of up to Rs. 1,50,000 under Section 80C of the Income Tax Act. Since ELSS funds are equity market-linked, they are relatively riskier, and their returns vary as per market performance. Among all the tax saving instruments available for investors, ELSS funds provide the shortest lock-in period of three years.

How to invest in ELSS?

The procedure to invest in ELSS funds is straightforward. There are mainly two ways by which you can invest in an ELSS:

  • Request your broker to purchase ELSS fund units on your behalf
  • Buy ELSS funds directly from a fund house or through an online investment advisory platform

How to invest in ELSS online: A step-by-step guide

Step 1: Register yourself on an online platform

If you wish to invest in ELSS funds through an online platform, you need to register yourself on it. Input your name, Aadhaar-linked mobile number, e-mail ID, and other basic details. Accept the terms and conditions and advisory agreement, furnish soft copies of requisite documents. Once you e-sign and submit the online application, you will be onboarded post a KYC compliance check.

Step 2: Select an ELSS fund

Log in to the online financial advisory portal with your registered e-mail ID and passcode. Explore various ELSS Mutual Funds offered therein. You may choose any of them based on your risk-return profile, investment duration, and financial goals.

Step 3: Select a fund plan

Based on expert advice and after factoring in other parameters like its past performance and consistency, you may choose the lump sum or SIP route while investing in an ELSS fund. You can also opt for dividend payouts or growth option, depending on your goals, whether long-term or short-term.

Step 4: Execute the purchase transaction

Once you have chosen the desired ELSS fund, you will be redirected to the affiliated Asset Management Company’s website. You can complete the necessary formalities therein and finally execute the fund purchase.

ELSS funds are a better tax saving option for investors looking for a short lock in period and do not mind taking some risk for better returns. Reach out to a financial expert today to discover more investment options and advice on mutual funds and stocks, based on your investor profile.