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Mutual funds are a widely preferred investment avenue that allows individuals to build wealth over time. They work by pooling funds from multiple investors to create a diversified portfolio consisting of assets like stocks, bonds, or a mix of both.
By investing in a mutual fund, you essentially buy units or shares of the fund, and the value of your investment is linked to the performance of the fund’s underlying assets.
Mutual funds offer flexibility and accessibility, allowing investors to start with small amounts and choose between a one-time lump sum investment or regular contributions through a Systematic Investment Plan (SIP), making it suitable for both new and seasoned investors
Mutual funds provide access to a broad spectrum of investment options, catering to different financial goals and risk appetites. Investors can choose from equity, debt, hybrid, index-based, sectoral, and thematic funds, depending on their preferences.
Mutual funds are overseen by qualified fund managers who use their market expertise and research to make investment decisions. This professional management is advantageous for those who lack the time or experience to manage their own portfolios.
One of the key advantages of mutual funds is that they are affordable and accessible. Investors can begin with modest amounts, and options like Systematic Investment Plans (SIPs) allow for disciplined, regular investing even with small sums.
Most mutual funds, especially open-ended ones, offer easy entry and exit, allowing investors to redeem their units on any business day. This ensures quick access to funds, enhancing flexibility in times of need.
By pooling money from multiple investors, mutual funds invest in a variety of asset classes and securities, helping reduce the risk associated with investing in a single instrument. This diversification minimizes the impact of poor performance in any one investment.
Mutual funds provide flexibility in investment amounts and strategies. You can invest a lump sum or opt for SIPs, and select from different account types like individual, joint, or tax-saving accounts (e.g., ELSS). This makes them suitable for a wide range of investors, from beginners to seasoned professionals.
Equity Linked Savings Scheme (ELSS) is a category of mutual fund in India that offers tax benefits under Section 80C of the Income Tax Act. These funds primarily invest in equity shares of companies across various sectors and market capitalizations. ELSS serves the dual purpose of wealth creation and tax saving, making it a popular choice for long-term investors.
To ensure transparency, strong corporate governance, and protection of stakeholder interests, various compliance requirements and statutory filings must be completed within prescribed timelines.
Our firm simplifies this process by offering efficient and reliable assistance in meeting these obligations. Compliance requirements are generally classified into four key categories.
For more information and expert support, we encourage you to consult with our experienced startup advisors.
Investing in Equity Linked Savings Schemes (ELSS) qualifies for a deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. This helps reduce your taxable income, making ELSS a popular tax-saving investment option.
ELSS comes with a compulsory lock-in of three years, which is the shortest among all Section 80C instruments. During this period, you cannot withdraw or redeem your investment.
Gains from ELSS held for more than three years qualify as long-term capital gains (LTCG). As per current tax laws, LTCG up to ₹1 lakh in a financial year is exempt from tax, making it a tax-efficient investment choice.
Since ELSS primarily invests in equity markets, it has the potential to deliver higher returns over the long term compared to traditional tax-saving options like fixed deposits or insurance plans. However, returns are market-linked and subject to investment risks.
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