What Are Tax Saving Mutual Funds?
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Tax-saving mutual funds stand as a distinctive category within the Indian financial landscape, extending tax benefits to investors in accordance with Section 80C of the Income Tax Act. Officially designated as Equity-linked Savings Schemes (ELSS), these funds pivot their investments primarily towards equity and equity-related instruments, presenting investors with the dual advantage of potential capital appreciation and tax savings. Salient attributes of tax-saving mutual funds (ELSS): Lock-in Period: ELSS funds mandate a compulsory lock-in period spanning three years. During this timeframe, investors are precluded from the premature redemption or sale of their units. Tax Benefits: Investments in ELSS funds entitle investors to deductions under Section 80C of the Income Tax Act, subject to a stipulated limit. As of my last knowledge update in January 2022, the maximum deductible amount under Section 80C stands at ₹1.5 lakh. Equity Exposure: ELSS funds predominantly channel their in...