Can I do my tax-planning better?
Do you wait till crunch time to finalise your tax saving opportunities?
You are not alone. Many of us are guilty of that. With very little time left before the March 31st deadline, most of us then rush and end up investing in insurance policies (or) five-year bank depositsto save tax. But there may be better investment options – ones that you can do right away too! Hear from our financial expert.
Five reasons why an Equity Linked Savings Scheme (ELSS) may work for you:
- It gives superior returns, when invested for long periods of time, say 5 years
- It also gives you the flexibility to liquidate after three years, in case of emergencies. All other tax-saving products come with higher lock-in periods.
- Investing small amounts over the course of the financial year, instead of investing Rs. 1,50,000 in one go helps in Rupee Cost Averaging. When the markets goes down we get more units and when the market goes up, we get the upside on our earlier investments.
- As per today’s tax laws, redemptions from ELSS schemes after three years will enjoy a capital gains tax benefit of Rs. 1,00,000 per annum per individual.
- Those who look for periodical income from ELSS have the option to choose Dividend Pay out Option or Systematic Withdrawal Option, after the lock in period (3 years)
What is the best time to invest in ELSS?
The answer is today.