To earn money in the present era is not an easy job. One has to work hard and save a lot to have good saving at the end of the year. However, after all the efforts also if one falls into the tax bracket and if he has to pay a handsome amount to the government in the form of an income tax, one does not love to go for it. In such a case one needs to find some of the options that can help him save a handsome amount. There are some of the options provided by the government with the help of which an individual can save a good amount on tax as well as fetch a handsome return on his investment.
Among the tools that can help one save income tax, the name of ELSS tops the list. It is a tool in which the invested amount is invested in the share market via an AMC. The amount in ELSS is basically invested in AMC which invests the same amount in different types of markets. Here one needs to note that different AMCs have a different vision, and accordingly they invest in the market. The ELSS is equity linked saving scheme where the investor is provided with units of funds as per its unit price prevailing at the time of investment. Over a period due to an increase in the unit price with the increase in share prices where the amount is invested, one can have a better return. Hence here one can find an option where he can save the income tax and also get a good return on the amount invested. One needs to find the best ELSS funds before investing the amount to have the best return.
The prime benefit of ELSS investment is the amount that is saved from income tax. One can invest up to 150000 in this fund from his taxable income. Hence one can also save all the tax also if he is in limit till 150000. This amount is exempted under section 80c of the income tax act. Another benefit is it is the fund that grows well. One cannot withdraw the amount invested in ELSS for next three years, but during this tenure, one can also get good return n the same. Hence one can save on both sides.
The process to invest amount:
One needs to open an account in the AMC with the help of his documents. One needs to submit the documents such as PAN card, Id proof, and address proof as well as a cancelled cheque to furnish the bank details. The investor can go for investing in the market by an online mode or an offline one. In online mode, the sites of the AMCs can be the best option while in offline mode one can go for any broker or agent of MF who can help him invest in the funds of his choice. Hence investing here is a viable option for the investor who wants to save income tax.