Page 11 - Value Plus

Time to

SAVE
TAXESand
CREATE
WEALTH

Comparison of popular tax savings instruments:

What is ELSS ? ELSS PPF NSC Tax
Saving
ELSS is a type of diversified equity mutual fund that Returns Market 8.70% 8.5% for
invests primarily in equity markets. It qualifies for linked 5 years, FD
tax deduction under section 80C of the Income Tax 15 years, 8.8% for 7.75-
Act, where investments upto Rs 1.5 lakhs are eligible Lock-in 3 years partial 10 years 8.25%
for deduction from total income. Tax Cap gains withdrawal 5/10 5 years
after 5 years years
Superior Returns – tax free, Interest and Interest
Div – tax maturity Interest taxable
Since ELSS invests in equity related instruments, free amount is taxable as per
it helps you to grow your money when the stock tax free as per slab
market grows over a period of time. slab

Tax advantage Tax Savings on investment in ELSS

Investment in ELSS is eligible for tax Taxable Amount Taxable In- Total Tax
deduction up to Rs 1.5 Lakh under Income invested in come after inv Savings (Rs)
section 80C of the Income-tax Act, 1961 (Rs) ELSS (Rs) in ELSS (Rs)
Dividend received is tax-free in the
hands of investors 3,00,000 30,000 2,70,000 3,090
Long-term capital gains is not applicable
on sale of ELSS as investment is held for 4,00,000 1,00,000 3,00,000 10,300
over an year
5,00,000 1,50,000 3,50,000 15,450
Shorter lock-in period
6,00,000 1,50,000 4,50,000 27,810
lowest lock-in period as compared to
other tax saving instruments 8,00,000 1,50,000 6,50,000 30,900

10,00,000 1,50,000 8,50,000 30,900

12,00,000 1,50,000 10,50,000 46,350

15,00,000 1,50,000 13,50,000 46,350

11 ARIHANT CAPITAL ¡ FEBRUARY 2016