Benefits of ELSS
•Investment in ELSS offers both capital gains (returns) as well as dividends to the investor. Dividend option allows for income in between.
•Income from both returns as well as dividends is exempted from income tax under Section 80C.
•There is no entry load associated with ELSS funds.
Entry load refers to the fees paid in percentage terms to the fund in which an investor has invested. So in case an entry load of say 3% is levied on a fund, then for an investment of Rs 1, 00,000, Rs 3000 is taken as entry load by the asset management company while remaining Rs 97,000 is invested in the fund.
•Lock in period of three years prevents untimely withdrawal of funds and thus saves one's money.
•Although investment in equity bears risk of market fluctuation, but also offers returns which might go as high as 18-20%.
Investment options under ELSS
ELSS offers an investor with two types of investment options namely growth option and dividend option.