Equity Linked Savings Schemes, or ELSS Funds, is a type of Mutual Fund that lets you grow your money in the long run while saving on taxes at the same time. As a result, they are often called Tax-Saving Funds.

 

Features

The essential characteristics of ELSS Funds include the following:

  • ELSS are Equity Mutual Funds that invest at least 80% of their investible corpus in Equity or Equity-related instruments.
  • These are the only Mutual Funds eligible for tax deductions u/s 80C of the Income Tax Act. So, when you invest in them, you can avail of tax exemptions for the invested amount of up to Rs. 1.5 lakh from your annual taxable income.
  • These funds have a mandatory three-year lock-in period. Hence, the returns are classified as Long-Term Capital Gains and profits of up to Rs. 1 lakh annually is exempted from taxation.

 

How to invest?

You can invest in ELSS Funds in the following two different ways:

  • Through a Systematic Investment Plan

SIPs enable you to divide your investment amount into small fixed instalments and invest them in ELSS Funds at set intervals. This method is advisable for investors who do not have a large corpus to begin their investment journey. You can start investing through SIPs with an amount as low as Rs. 500.

  • By making Lumpsum Investments

In this method, you can invest a chunk of money in ELSS Fund. Hence, it is an ideal investment method when you have a significant corpus of surplus funds. Lumpsum Investments provide excellent returns when you invest at the right time and hold it for a longer duration. However, if you wonder how much you will gain when your ELSS matures, you can get help from a Mutual Fund Lumpsum calculator.

 

What is a Lumpsum calculator?

A Mutual Fund Lumpsum calculator is a simple online tool that determines the future returns from your schemes when you invest a lumpsum amount in them. It quickly calculates how much you will earn if you invest a certain sum at an estimated annual return rate for a fixed duration. It enables you to understand the impact of your investment tenure on your returns.

You can also use this tool to compare various ELSS Funds to find one that best suits your financial goals. Hence, the Lumpsum calculator assists in your decision and lets you make an informed call about whether to proceed with the investment. Similarly, an online SIP Return calculator is a financial tool that determines the returns on your SIPs.

It also provides a fair idea of how much you should invest in an ELSS at regular intervals to reach your financial goal. Hence, it conveniently performs complex calculations and gives you a road map to achieve your target corpus.