ELSS Funds Compare

Additional Useful Information

• An investor can buy “Units” of these mutual funds. These units can be purchased at a price which is called the “Net Asset Value or NAV”. The NAV of these funds keeps changing daily depending upon the changes in the stock prices of the companies that are held by them.

• The investor can sell these units anytime at the NAV price prevailing on the day of the sale.

• Total Purchase Amount	=	Number of Units X NAV as on the day of purchase
  Total Sale Amount	=	Number of Units X NAV as on the day of sale
  Total Gain	=	Total Sale Amount – Total Purchase Amount

• The fund house which issues a ELSS Mutual Fund may offer two options to select from –
• IDCW Option – In this option, growth in the mutual fund value is distributed back to the investor’s bank account in the form of periodic payouts called “Dividends”. This payout could be monthly or quarterly.
• Growth Option – In this option, growth in the mutual fund value is invested back in the fund for further growth. The investor’s gains are in the form of higher NAV price of the units of the fund.

• ELSS Mutual Funds have a 3-year lock in period, which means investors cannot redeem the ELSS Mutual Fund for a minimum of 3 years from the start date of investment.

• ELSS Mutual Funds are considered a good investment option primarily for tax saving purposes.

Returns *

• ELSS Mutual Funds do not guarantee any returns. They are subject to market risks.

• If ELSS Mutual Funds are held over a 7-year period, they could generate returns ranging from 12% to 23% per year.

Risk Level

• ELSS Mutual Funds are categorized as high-risk investments since they invest in the equity stock market.

Liquidity

• ELSS Mutual Funds are not liquid for the FIRST 3 YEARS since there is a lock in period.

• After 3 years, when an investor sells (or redeems) units of these funds, the fund house will pay the sale amount to the investor in 2 working days (T+2).

Interesting Facts

• ELSS Funds invest a minimum of 80% of its total investable amount in equity.

Tax Implications

• Earnings received from ELSS Mutual Funds are taxable.

• When investors sell their ELSS Mutual Fund units, the difference between the Sale Amount and Purchase Amount is typically called “Capital Gain” or “Capital Loss” (if sale amount is lesser than the purchase amount).

• The tax that the investor must pay on Capital Gain is –
• Situation 1 – Since there is a lock in period of 3 years, ELSS Mutual Funds do not have any short term capital gains tax implications.
• Situation 2 - If the ELSS Mutual Funds are sold after a period of 2 year from investment, the Capital Gains earned (called Long Term Capital Gains) are taxed at 12.5% of the gain.

• There is no tax in case of “Capital Loss”.

• For any dividends/payouts received by investors from ELSS Mutual Funds, these amounts are added to their total taxable income and tax is required to be paid as per the tax slab.

Where To Invest

• https://www.etmoney.com/mutual-funds/equity/elss/38

• https://groww.in/mutual-funds/category/best-elss-mutual-funds

• https://scripbox.com/mutual-fund/best-elss-funds