Equity-linked saving scheme: ELSS mutual funds help you save income tax! You can save your money too, here is how

Equity-linked saving scheme: August 31st deadline for income tax filing is a few days away and earning individuals are busy filing their income tax return (ITR). While the period to save taxes for last fiscal is over, you must move now for the current one to save your money or else lose it to the taxman. While filing ITR, most people are looking for all avenues to save money that is meant for income tax outgo. According to tax and investment experts, equity-linked saving schemes (ELSS) will help taxpayers to save their hard-earned money as the Section 80C of the Income Tax Act (ITA), an earning individual can claim income tax benefit on his or her investment up to Rs 1.5 lakh in ELSS mutual funds. However, they said that the limit is s 1.5 lakh and the list of investments include ELSS mutual funds, Public Provident Fund or PPF, life insurance etc.

Elaborating upon the Section 80C provision of the income tax Balwant Jain, a Mumbai-based tax and investment expert said, "Under the Section 80C of the income tax act, an earning individual can claim up to Rs 1.5 lakh investments in ELSS mutual funds, Public Provident Fund or PPF, life insurance etc." Jain said that people going to file their ITR by August 31 deadline, should not miss claiming the income tax exemption if he or she has invested in any of the above-mentioned saving options.

See Zee Business Live TV streaming below:

On how to maximise one's return and claim income tax benefit under Section 80C Manikaran Singh, a SEBI registered tax and investment expert said, "To maximise one's return and at the same time claim tax benefit under Section 80C of the ITA, one should go for the ELSS mutual funds because, in long-term perspective, mutual funds give better returns than any other Section 80C schemes that allow an earning individual to claim income tax benefit." However, he maintained that investment should not be aimed at saving the income tax only. One should look at returns also. For that equity mutual funds can be a better option but in such mutual funds, Section 80C is not permitted.

However, Balwant Jain added that the selection of the equity-linked saving scheme in mutual funds completely depends upon the risk appetite of the investor. If an investor has higher risk-appetite, then he or she can go for the ELSS mutual funds. Because, when the markets would go down, this category of the mutual funds receives the maximum beating among the saving schemes that allow Section 80 C benefits of the Income Tax Act.