With the Union Budget just a month away, the Association of Mutual Funds in India (AMFI) has lobbied with the government to allow debt-linked saving scheme (DLSS) for tax deductions. At the moment, tax-saving mutual funds are equity schemes.
For most of us, an ELSS (equity linked savings scheme) has been our first mutual fund investment. Here is a look at how ELSS as a category has performed.
Tax-saving or investing?
Typically, these schemes get most of their inflows from December to March of each financial year, as investors look for avenues to save on income tax. “The need to save tax is the first objective of most individuals investing in ELSS,” says G Pradeepkumar, CEO, Union Mutual Fund. “Healthy risk-adjusted returns tend to make investors hold on for longer time frames.”