ELSS (Equity Linked Saving Scheme) General Discussions

[mrindia]

50k in PPF seems to b enough. Go for a good ELSS. It has 3yrs lock-in period, that will apply to every SIP ammount individually. If you have really long horizon, go via SIP in ELSS. Otherwise put it in lumpsom (u may try to time the market for this purpose) so that whole ammount is free alongwith interest after 3yr lock-in. Any investment before 31 March 2008 will have tax bennefit, so do not worry. U may take ur time to invest in ELSS.

[life2007]

Thank you MRINDIA for your advice.

You mean to say that I should put balance 50K lumpsum amount in three months in a good ELSS. Dont you think it is risky to put the entire amount in one basket for a period of 3 years (as ELSS has a compulsory 3 year lock in periods).

Please advice. I am looking forward to have other experts advice as well

Regards
Jeet

Originally Posted by mrindia

50k in PPF seems to b enough. Go for a good ELSS. It has 3yrs lock-in period, that will apply to every SIP ammount individually. If you have really long horizon, go via SIP in ELSS. Otherwise put it in lumpsom (u may try to time the market for this purpose) so that whole ammount is free alongwith interest after 3yr lock-in. Any investment before 31 March 2008 will have tax bennefit, so do not worry. U may take ur time to invest in ELSS.

[engel]

Dear Boarders,
Please guide me in understanding the investments to be made in ELSS/Tax planning.
Can I invest in open ended tax planning mutual fund?Will it have a lock in period of three years?
In other words,is lock in period of three years a must?If yes then,every year I have to invest in a tax saving scheme with lock in period of 3 years?

Please help.

Engel

[marghadedk]

Every Tax Saving Mutual funds(ELSS) has a lock in period of 3 Years and the investment maximum upto Rs 1,00,000 in various tax saving Funds under 80C of the Income Tax Act can be done.
The tax benefit can be availed only on the amount invested in ELSS during that particular financial year.But the exception is for dividend reinvestment option of ELSS where the reinvested amount has again a lock in period of 3 years and qualifies for tax benefit in that particular year.

[engel]

Thanks for that reply

Engel

[ashii]

What is general rules about MF Investments after one individual Life?

Say X invested 10000/- in ELSS with 3 year Lock in period and he sadly expired after 1 year,will his nominee/Legal Beneficiary will have to wait till completing of Lock in period to claim the fund?

[mrindia]

The 3year lock-in period will apply to nominee/legal bene. also.

[bhindi75]

Hi,

I have never invented in mutual funds before, much less ELSS. I want to invest 30,000 in ELSS and spread this amount over 2-3 funds. When I searched the internet about ELSS, I got even more confused. I now have a thousand questions about ELSS. Perhaps someone can help answer these question. Forgive me if some of these questions seem childish or contradictory.

1. Which is th best ELSS for 2008. (I keep reading about SBI Magnum. What are the other.)

2. Is it better to apply in NFO or in old funds.

3. Is it even allowed to apply in old funds.

4. Are all ELSS funds closed ended.

5. What is the difference between close ended and open ended funds.

6. What is the lock in period for most ELSS.

7. I understand that you can invest on a monthly basis in SIP. How does the lock in period work out in SIP.

8. What is exit load.

9. What is entry load.

Can someone please help me find answers to these questions. Thanks in advance. And I will pose the remaining 991 questions after I start getting some answers to these questions. Thanks Again.

[sj1234]

A brief Overivew of Elss

ELSS funds have a lock-in period of three years. This could be restricting, but look at the other side of the picture -- the lock-in period prevents unnecessary withdrawals and helps your money grow over a period of time.
If you are wondering why a three-year lock-in period is necessary, it is because you need to take a long-term view when you invest in equity. The real potential of equities starts to show only after a few years. This allows you to ignore the short-term slumps and stay invested for the long haul.
• How to compare mutual funds
• /The tax benefit
Investments in ELSSs fall under Section 80C. The limit under this section is Rs 100,000.
This is irrespective of how much you earn and under which tax bracket you fall. Also, there are no sub-limits under this overall Rs 100,000 amount. So, if you choose, you can invest the entire amount in ELSS or infrastructure bonds. How you utilise the limit of Rs 100,000 is entirely up to you. The dividends you earn in an ELSS are tax free.
When you sell the units of these funds, you can benefit from long-term capital gain, under which you don't have to pay

[sj1234]

ELSS funds have a lock-in period of three years. This could be restricting, but look at the other side of the picture -- the lock-in period prevents unnecessary withdrawals and helps your money grow over a period of time.
If you are wondering why a three-year lock-in period is necessary, it is because you need to take a long-term view when you invest in equity. The real potential of equities starts to show only after a few years. This allows you to ignore the short-term slumps and stay invested for the long haul.
• How to compare mutual funds
• /The tax benefit
Investments in ELSSs fall under Section 80C. The limit under this section is Rs 100,000.
This is irrespective of how much you earn and under which tax bracket you fall. Also, there are no sub-limits under this overall Rs 100,000 amount. So, if you choose, you can invest the entire amount in ELSS or infrastructure bonds. How you utilise the limit of Rs 100,000 is entirely up to you. The dividends you earn in an ELSS are tax free.
When you sell the units of these funds, you can benefit from long-term capital gain, under which you don't have to pay