Re: Questions about 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
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.
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.
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