Income Tax savings under section 80C: ELSS

The end of financial year 2011-12 is only two months away. All individual and HUF tax payers can save up to Rs 1, 00,000/- under section 80 C of the Income Tax Act.

 

If you have not saved in eligible schemes the full amount, ELSS is a good option.

· Features of ELSS (Equity Linked savings scheme):

1. Invested amount is allowed as deduction u/s 80C up to Rs 1, 00,000/-

2. Three years lock in period of the investment

3. Proceeds of the scheme are invested in Infrastructure Companies/Bonds and hence gestation period is long.

4. Appropriate for long term investors. 

· Comparison between ELSS and other Tax saving scheme

Instruments

PPF

EPF

Life insurance(ULIP)

NSC

5 year Term deposit

ELSS

Maximum investment

1,00,000

1,00,000

1,00,000

1,00,000

1,00,000

1,00,000

Interest rate

8.6%

9.5%

> 10%

8%

9-9.25%

See below

Time frame

15 years

At retirement

5 years

6 years

5 years

3 years

 · Comparison of ELSS schemes

Selected Schemes

Exp ratio

1 yr return

3 yrs return

5 yrs return

ICICI Prudential Tax plan

2.00

-9.66%

35.63%

6.31%

HDFC  tax saver

2.07

-11.12%

32.82%

7.18%

Fidelity tax saver

2.00

-9.50%

30.51%

9.37%

Canara Robeco Equity tax saver

2.33

-5.92%

33.29%

12.39%

Reliance Tax saver

1.89

-7.28%

27.79%

4.89%

 

 

Tax planning is very important aspect of Personal Financial Planning process. A fee only certified financial planner can guide you in identifying suitable investment products. Select fee-only professionals as they provide unbiased recommendations independent of product sales. 

Last modified on Friday, 16 August 2013 04:17

Prakash Praharaj

Shri Prakash Praharaj has a passion for excellence. He has been awarded two gold medals for securing top positions both in Graduation and Post Graduation in Commerce. He is an MBA with specialization in Finance and marketing. He has been awarded Diploma in Treasury, Investment and Risk Management besides CAIIB from the Indian Institute of Bankers. He is a Certified Financial PlannerCM from the Financial Planning standards Board, India (FPSB), affiliated to FPSB, Denver, USA and Certified Personal Financial Adviser from NISM. He is also a SEBI registered Investment Adviser vide Reg. no. INA 000000045 dated 2nd August 2013.His book "Your Every day guide to Personal Finance and Insurance" has been published by CNBC TV 18 in August 2015.

2 comments

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  • Tushar

    posted by Tushar

    Wednesday, 21 August 2013 06:17

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