If you are someone with a moderately high risk appetite and doesn’t mind investing in a tax saving scheme that invests in equity for long term capital appreciation, you can consider investing in Equity Linked Savings Scheme.
What is an Equity Linked Savings Scheme?
An Equity Linked Savings Scheme is an open ended equity linked tax saving scheme that comes with a three year lock-in and tax benefit. Under Section 80C of the Indian Income Tax Act, 1961 an individual can invest up to Rs. 1.5 lakhs per fiscal year in ELSS and claim tax deduction for the same. ELSS is probably the only equity mutual funds scheme that comes with a tax benefit.
Here’s a simple example to help you understand how ELSS works –
Aditi Mittal is a senior operations manager with a pharmaceutical company who earns Rs. 15 lakhs per year. This lands her in the highest tax bracket. Aditi learns about ELSS from a friend and decides to invest Rs. 1.5 lakh in the tax saver fund. Now according to 80C of the Indian Income Tax Act, 1961 an individual can invest up to Rs. 1,50,000 in ELSS and claim tax deductions for the same. By investing in ELSS Aditi’s gross taxable income has now come down to Rs. 13.5(15-1.5) lakhs per annum. Also, the three year lock in will ensure that the invested amount continues to accrue interest and might even help her build wealth in the long term.
Invest in Axis Long Term Equity Fund for Tax Benefit and Capital Appreciation
Axis Long Term Equity Fund is an open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit. The investment objective of
Axis Long Term Equity Fund
is to generate income and long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities. However, there can be no assurance that the investment objective of the Scheme will be achieved.
Benefits of Axis Long Term Equity Fund
Here are some of the primary benefits of investing in Axis Long Term Equity Fund –
- Axis Long Term Equity Fund is a diversified equity linked saving scheme (ELSS) that invests in a mix of large caps and select midcaps
- The fund has a 3-year lock-in which is the lowest among other tax saving instruments
- A 3-year lock-in ensures that the money stays invested in equities and does not get perturbed by market ups and downs
- Being an ELSS scheme, the scheme comes with dual advantage of building wealth and saving tax
- Investors can target long term goals such as children’s education and their future, retirement or any other long term financial plan
- Axis Long Term Equity Fund has a 3-year lock-in which is one of the lowest amongst other tax saving instruments
Consider starting a monthly SIP in Axis Long Term Equity Fund
Those looking to save tax by investing in Axis Long Term Equity Fund, they can consider starting a monthly SIP in this tax saver fund. A Systematic Investment Plan is an easy and convenient way of investing in Axis Long Term Equity Fund. One can start a monthly SIP and inculcate the discipline of saving. All an investor has to do is become KYC compliant and you can start investing in mutual funds via SIP from the comfort of your home or office using a laptop or smartphone with a decent internet connection.
The beauty of
SIP investing is that investors can decide the monthly SIP amount as long as this amount is not lesser than the minimum investment amount mentioned in the offer document. Investors are free to increase or decrease their monthly SIP investment amount depending on the performance of the equity scheme. One can even benefit from investment techniques like compounding and rupee cost averaging if they continue investing in Axis Long Term Equity Fund via SIP for the long run.
Axis Long Term Equity Fund
An open ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
