These days if you are planning to invest your money somewhere in such a place. If you are able to get better returns from here, then you can invest in an equity-linked saving scheme ie ELSS, or Gold Mutual Fund. Both these options are considered good for long-term investment. We are telling you about these two schemes so that you can invest in the right place according to your own.
ELSS benefits in tax exemption
3-year lock-in: ELSS has a lock-in period of 3 years, ie the money you invest in it can be withdrawn only after 3 years. This is a very good feature of this scheme. Its lock-in period is much lower as compared to other schemes.
You can start investing with 500 rupees: Investing in ELSS can also start with 500 rupees through a Systematic Investment Plan (SIP). There is no maximum limit. Investors get two types of options in these funds. The first is growth and the second is dividend payout. In the growth option, money remains in the scheme continuously.
There are two ways you can take advantage: In the dividend option, companies keep on distributing profits in the form of dividends from time to time. Dividends can be availed once a year in schemes with dividend options. However, some schemes have given dividends more than once a year.
Tax exemption under section 80C: In a financial year you can avail of tax exemption under Section 80C of the Income Tax Act on investment up to Rs 1.5 lakh. Apart from this, the return on investment in ELSS and the amount of redemption (selling the investment unit) is also completely tax-free.
No tax up to 1 lakh rupees: Long term capital gains (LTCG) up to 1 lakh rupees a year from mutual funds are exempt from income tax. That is, you do not have to pay any tax up to 1 lakh rupees. Taxes at the rate of 10% have to be paid for profits exceeding this limit.
Can start with less money in gold mutual funds
It invests only in Gold ETFs: Gold mutual funds are a type of Gold ETF. These are schemes that primarily invest in gold ETFs. Gold mutual funds do not invest directly in physical gold but take the same position indirectly. Gold mutual funds are open-ended investment products that invest in gold exchange-traded funds (Gold ETFs) and their net asset value (NAV) is tied to the performance of ETFs.
You can start investing with 500 rupees: You can start investing in Gold mutual funds with 500 through monthly SIP. A Demat account is not required to invest in it. You can start investing in it through any mutual fund house.
20% tax to be paid on long-term gains: An investment of more than 3 years in a gold mutual fund is considered long-term and its benefits are called long-term capital gains (LTCG). Gold is taxed at a rate of 20% with indexation benefit (plus surcharge, if any and cess) on LTCG, while short-term capital gains (STCG) are taxed at the slab rate applicable to the investor.
1 Year Exit Load: Gold mutual funds may have an exit load which is usually up to 1 year. Mutual fund houses charge an exit load when you want to recover the profits of your investment before a certain period. The exit load is levied to prevent investors from going out. Different mutual funds have different times to apply exit load. The exit load is a small part of your NAV, so it is cut off when you go out.
Like and Follow us on :