Various investments under section 80C

Under section 80C of the Income Tax Act, certain investments are deductible (up to a maximum of Rs 1 lakh) from gross total income. Section 80C benefit has been provided to encourage long term savings and investments. This limit is extended to everyone irrespective of their income levels and tax slab.

Please find various investment options under section 80C

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Handy Information on ELSS(Equity Linked Savings Scheme)

Most of the tax saving instruments that fall under Section 80C is saving oriented with returns after adjusting for inflation. The exceptions are the ULIPs (Life and pension funds) and the ELSS (Equity linked savings scheme) mutual funds.

The basic advantage of opting for ELSS as compared to the ULIPs is the frequency—mostly a single investment or a monthly investment for a year—and term for investment, for getting good returns. 

The handy guide to ELSS mutual funds

1. What is an ELSS?

ELSS is a mutual fund that has to invest a minimum of 80 per cent in equity shares. The balance 20 per cent can be in debt, money market instruments, cash or even more equity.

There is a 3 year lock-in period for the ELSS mutual funds. Post the 36 months, the funds remain invested and work like any other open-ended mutual fund.

2. What are the advantages? 

It is an established fact that in the long run

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ELSS Versus other tax saving Instruments

Comparison of various Tax Saving Instruments

ELSS is Equity Linked Savings Scheme. ELSS as the name clearly suggests is a savings scheme linked to equity markets. It is a type of equity mutual fund, which offers tax benefits to the investors added with possible high returns comparable to any other equity fund.
Equity linked saving schemes is a mutual fund diversified equity funds with Tax benefits. It is just like other tax saving instruments like National Savings Certificate and Public Provident Fund. Main advantage with ELSS is lock-in period is only 3 years while for NSC it is 6 years and for PPF it is 15 years. At the same time risk factor is high in ELSS and also with high possible returns. Also as per present tax norms, withdrawal after 3 years is exempted from any kind of tax.

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