Are you aware that by investing in ELSS funds under Section 80c of the IT Act, you can save Income Tax upto Rs 45,000 in taxes ?

Do you feel you are paying a lot of Income Tax and want to reduce it ?

The government of India allows all individuals in India to invest upto Rs 150,000 in ELSS funds every year which can be claimed as a deduction under section 80c to save Income Tax.

What this means is that if you are in the 30% tax bracket, you don’t have to pay 30% tax on the tax saving investment of Rs 1.5 lakh that you make – Which amounts to a saving of ~ Rs 45,000 ( 30% of Rs 1.5 lakhs )

However, if you are unable to save and invest Rs 1.5 lakhs from your income, you can save a lower amount and still save tax.

Compared to other Tax Saving options, elss funds have the following advantages:

  • Lowest lockin period of 3 years ( Compared to 5 years and above for other options )

  • Highest Returns ~ 15 to 20% in the last 3 years ( Other products like FDs and Insurance give 6 to 8% returns )

Note: If you have declared at the beginning of the year that you will make tax saving investments but haven’t done so yet, you maybe liable to pay extra taxes at the end of the year.