Axis ELSS 101

By | June 6, 2018

Planning to invest in ELSS funds? The Axis ELSS fund could be the right one for you. Read on to know more.

Axis ELSS 101

Tax planning forms an integral part of financial management. If you’re still looking for ways to plan your taxes better, Equity Linked Savings Schemes (ELSS) are certainly a great way to go about it. In fact, investing in ELSS is one of the most popular ways of saving tax under Sec 80C.

Additional Reading: Why Goal-based Approach To Investment Is Crucial

Features Of ELSS Funds

Here are some significant features of ELSS funds to bring you up to speed:

  • ELSS is basically an equity fund so it is bound to reflect returns from the equity markets.
  • It has a lock-in period of three years from the date of investment.
  • You get an option to exit ELSS by selling it after a period of three years.
  • Just like normal equity funds, ELSS funds also give you both dividend and growth options.
  • When it comes to helping you save tax, returns from an ELSS scheme are tax-free. Under Sec 80C of the Income Tax Act, you can claim up to Rs. 1 lakh of your ELSS investment as a deduction from your gross total income in a financial year.
Additional Reading: Popular ELSS Funds 2018

Key Things To Look For In ELSS Funds

Although ELSS funds sound quite fancy, here are the major things you need to look out for:

  • Before investing, don’t forget to look at the long-term performance of the fund.
  • Check out other fund details as well like the fund manager’s investment approach and portfolio of the fund.
  • Check the expense ratio of the fund and how volatile the fund has been in the past.
Additional Reading: Tax Saving Through ELSS Funds? Factors To Keep In Mind

Why Is ELSS A Preferred Choice Over Other Tax Saving Instruments?

Here’s why ELSS funds are generally preferred over other tax-saving instruments:

  • ELSS funds come with the lowest lock-in period compared to other tax saving instruments like PPF (Public Provident Fund), NSC (National Savings Certificate) and Fixed Deposits.
  • Since an ELSS is basically an investment in equity markets, investing in it for a longer time can get better returns than investing in other instruments.

What Do You Need To Watch Out For?

Although ELSS funds sound like a great investment avenue, there are a few disadvantages you need to be wary of:

  • As with every other equity market-related investment instruments, ELSS funds also come with a certain risk (depending on the market conditions).
  • Some other investment schemes might give you the option of premature withdrawal, but not so with ELSS funds. You can’t withdraw your money before it matures.

Now that you are familiar with ELSS funds, it’s time to look at the features of Axis ELSS funds available in the market.

Like every other ELSS fund, Axis ELSS funds come with some key features that are hard to miss.

  • Since it is an open-end scheme, you can invest in it or liquidate it according to your requirement.
  • It lets you avail tax benefits under Section 80 C of the Income Tax Act.
  • It comes with a mandatory lock-in period of three years. You can still continue to remain invested beyond this period, if you wish.
  • The dividends and capital gains that you earn from this scheme are totally tax exempt.

The Eligibility Criteria

  • If you are an Indian resident who has attained 18 years of age and has a valid PAN card, you can apply for this investment scheme as long as all you meet all the SEBI-mandated KYC criteria.
  • The minimum investment amount at any time is Rs. 500 in both cases—a lump sum or an SIP. Additional purchases above Rs. 500 can be made in multiples of Rs. 500 each.

So, if you think you’re ready to start building your wealth and saving for your future, now’s the time to invest in Axis ELSS fund. Want more options? We have tons!

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