Explain the way to invest in top Tax Saver (ELSS) Funds and its advantages

1. Explain the way to invest in top Tax Saver (ELSS) Fundsand itsadvantages ELSS mutual funds are tax saving schemes which help you get equity-linked returns and tax benefits. You can invest in the top-performing ELSS mutual fundsfor wealth creation and tax-savingbenefits. When it comes to investments in ELSS mutual funds, there are various ways of doing so. These ways are as follows– Through theAMC Mutual funds are offered by Asset Management Companies (AMCs). You can, therefore, buy an ELSS mutual fund scheme directly from the AMC which offers it. You can invest in ELSS funds either online through the AMC’s website or by visiting the branch of the AMC and submitting a purchase request therein. Through amiddleman There are mutual fund brokers, agents and distributors who sell mutual funds on the behalf of AMCs. You can buy an ELSS mutual fund scheme from any middleman that you like. When buying through middlemen, you can also compare other ELSS funds and then choose a fund which offers the best returns. Through R & Tagents Registrar and Transfer Agents (RTAs) also sell ELSS funds on behalf of the AMC. Common examples of RTAs include Karvy, CAMS, etc. You can, therefore, invest in ELSS mutual funds through an RTA either online oroffline. When investing in ELSS mutual funds, the following things should be kept in mind – Choose a direct scheme over a regular one for a lower expense ratio. The lower expense ratio would, in turn, give you higher returns on your investments. Always compare the available funds before investing. The comparison would allow you to choose the best performing ELSS mutual fund Remember that ELSS funds have a lock-in period of 3 years from the date ofinvestment You can invest either in one lump sum or in SIPs as per your convenience andpreference Some of the top-performing ELSS funds in the market today are as follows–

2. (Disclaimer - *Returns are recorded as on 22nd April2020) (Source: https://www.etmoney.com/mutual-funds/featured/top-tax-saver-elss-funds/8) Advantages of ELSS mutual funds Now that you know the ways of investing in ELSS funds, let’s have a quick look at the advantages which these mutual fund schemes provide. The advantages include the following– Taxbenefits The main advantage of ELSS is that it is a tax saving scheme. The money invested into the scheme qualifies as a deduction under Section 80C up to INR 1.5 lakhs. Thus, if you are in the 30% tax bracket and you invest INR 1.5 lakhs in an ELSS scheme, you can save taxes of up to INR 45,000. Moreover, returns provided by the scheme are tax-free up to INR 1 lakh. If the returns exceed INR 1 lakh, the excess is taxed @10% which is quitelow. Disciplinedsavings Since ELSS mutual funds have a lock-in period of 3 years, they let you save in a disciplined manner and avoid the temptation of early withdrawals. As you save in a disciplined manner, you can get good returns on your investedfunds. Goodreturns Since ELSS funds are equity-oriented mutual fund schemes, they have the potential of providing good returns on your investments. If you stay invested in the scheme for a long term period, you can get attractive returns which can also double yourinvestments. Though ELSS funds have other benefits too, these three are the main ones that make these funds popular amonginvestors. So, if you are thinking of investing in a tax-saving scheme, choose ELSS funds. There are various ways of investing in ELSS schemes so that you can invest as per your convenience. Moreover, the advantages offered by the scheme also make it an attractive investment avenue. So, invest in ELSS mutual funds and get the benefits that they promise.