Best mutual funds to invest under Section 80C
ET Online|
Feb 20, 2018, 11.30 AM IST
I want to invest in mutual funds under Section 80C. The lock-in can be one or three years. Returns 12- 15% or more, with monthly/quarterly dividend pay-out.
--Girish Sharma
It seems, you are new to investing in mutual funds. If you are indeed a new investor, you should consult a mutual fund advisor before investing. Do not be adventurous and expose your hard-earned money to unnecessary risk.
Investments in Equity Linked Saving Schemes or ELSSs qualify for tax deduction under Section 80C of the Income Tax Act. The maximum tax deduction allowed under Section 80C is Rs 1.5 lakh under Section 80C.
ELSSs are equity mutual fund schemes that invest in stocks. They come with a mandatory lock-in period of three years. They are riskier than other options like Public Provident Fund, National Saving Certificate, etc. However, they also have the potential to offer superior returns. ELSS category has offered an average return of 18.45 per cent in the last five years.
It is not clear why you are opting for the dividend pay out. Dividend in mutual funds is just way of taking the returns out of your mutual fund investment. You should opt for it only if you want periodic income. Otherwise, it will rob you a chance to create wealth over a long period. When you are taking money out of your investments regularly to consume, the money won’t grow. The power of compounding is a powerful tool that helps you to create wealth in the long term. Link your ELSS investment with a long-term goal to stay invested.
Here are our recommended Equity Linked Saving Schemes: Best tax saving mutual funds or ELSS to invest in 2018
--Girish Sharma
It seems, you are new to investing in mutual funds. If you are indeed a new investor, you should consult a mutual fund advisor before investing. Do not be adventurous and expose your hard-earned money to unnecessary risk.
Investments in Equity Linked Saving Schemes or ELSSs qualify for tax deduction under Section 80C of the Income Tax Act. The maximum tax deduction allowed under Section 80C is Rs 1.5 lakh under Section 80C.
ELSSs are equity mutual fund schemes that invest in stocks. They come with a mandatory lock-in period of three years. They are riskier than other options like Public Provident Fund, National Saving Certificate, etc. However, they also have the potential to offer superior returns. ELSS category has offered an average return of 18.45 per cent in the last five years.
It is not clear why you are opting for the dividend pay out. Dividend in mutual funds is just way of taking the returns out of your mutual fund investment. You should opt for it only if you want periodic income. Otherwise, it will rob you a chance to create wealth over a long period. When you are taking money out of your investments regularly to consume, the money won’t grow. The power of compounding is a powerful tool that helps you to create wealth in the long term. Link your ELSS investment with a long-term goal to stay invested.
Here are our recommended Equity Linked Saving Schemes: Best tax saving mutual funds or ELSS to invest in 2018
