Know­ing ELSS

Consumer Voice - - Bfsi -

ELSS is a mu­tual fund scheme and is quite sim­i­lar to the diver­si­fied eq­uity fund of a mu­tual fund. As the name sug­gests, the scheme pri­mar­ily in­vests in the eq­uity mar­ket by buy­ing eq­uity stocks of com­pa­nies listed on the stock ex­changes. The units of this scheme are of­fered at the net as­set value (NAV). The NAV is an­nounced for all busi­ness days and keeps chang­ing depend­ing pri­mar­ily upon the move­ment in the prices of stocks held in the port­fo­lio of the scheme in re­la­tion to mar­ket fluc­tu­a­tions.

Is It a Bet­ter In­vest­ment? Should You Try It?

If the di­rect tax code (DTC) pro­posed by the Gov­ern­ment comes into ef­fect, your most de­pend­able tax-sav­ing op­tion – Sec­tion 80C of In­come Tax Act – will see amend­ments. While the DTC in­cludes a pro­posal to in­crease the el­i­gi­ble de­duc­tion un­der Sec­tion 80C, ELSS may not re­main el­i­gi­ble to be a tax-sav­ing in­stru­ment, thus leav­ing you with fewer mar­ketlinked in­vest­ment op­tions. Hence, the ad­vice for the time be­ing is that you may in­vest in it if be­fore it goes off the taxsav­ing list, pray for your stocks to do bet­ter, and get higher re­turns on in­vest­ments.

Most of you make an in­vest­ment keep­ing in mind your age, in­come, ex­penses, and near­ness to your goal. You plan your tax-sav­ing in­vest­ment port­fo­lio ac­cord­ingly. A sim­ple ad­vice to any in­vestor is that if they are re­tir­ing from work sooner, then their in­vest­ments should not be mar­ket-linked. How­ever, if one has some time be­fore re­tire­ment, they may take a lit­tle risk to chance upon a few higher re­turns.

Hence, if you are young with a con­sid­er­able in­come that al­lows you to take a risk, you may in­vest

A sim­ple bit of ad­vice to any in­vestor is that if they are re­tir­ing from work sooner, then their in­vest­ments should not be mar­ket-linked. How­ever, if one has some time be­fore re­tire­ment, they may take a lit­tle risk to chance upon a

few higher re­turns.

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