Looking for tax saving schemes? ELSS a good option
With an Equity Savings Linked Scheme (ELSS), you can save tax in the year of investment, the investment itself is a good one and the returns are not taxable after the investment period ends.
December 14, 2011 / 20:26 IST
Suresh Sadagopan
This is again that time of the year when people start scrambling to invest for saving tax. Those in service, need to also submit proof to their employer by Dec/ Jan. Those who have not invested till now will have to evaluate the options available and invest wisely.Lots of times, tax savings becomes an end in itself and people end up investing in anything that comes by, to save tax. This is the time, insurance products are pitched as tax savings options. The point is, if they do make sense, they should not be considered just because they save tax. Tax savings should just be incidental to the overall investment objective, rather than it becoming a goal in itself. If tax savings at the time of investment (under Sec 80C) is combined with a good investment whose returns are tax free as well, then an investor would truly be leveraging the full benefit of making such investments. Equity Savings Linked Scheme (ELSS) is one such option, where you can save tax in the year of investment, the investment itself is a good one and the returns are not taxable after the investment period ends. The other options are NSC, PPF,PF, 5 year FDs & Time deposits. All the mentioned options, except ELSS, invest in debt. ELSS, is the only investment option that invests in equity and has the lowest lock-in period of three years. ELSS hence have the potential to deliver good returns and at the same time save tax. What
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