ELSS Meaning and
Definition
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ELSS stands for Equity Linked Savings Scheme. It is a type of mutual fund investment scheme offered in India. ELSS is primarily designed to help individuals save taxes under Section 80C of the Income Tax Act while providing an opportunity to invest in equity markets.
ELSS funds are open-ended equity mutual funds that offer tax benefits. They primarily invest in equity and equity-related securities. These funds have a lock-in period of three years, meaning investors cannot redeem or withdraw the invested amount before this period. The lock-in duration for ELSS funds is shorter compared to other tax-saving investments such as Public Provident Fund (PPF) or National Savings Certificates (NSC), which have lock-in periods of 15 years and 5 years, respectively.
ELSS funds have the potential for higher returns due to their equity exposure, but they also come with higher risks. These funds are subject to market fluctuations and can experience volatility. However, they offer the advantage of compounding returns over the long term, which can help investors generate wealth.
Investors can invest in ELSS funds either through lump sum investments or systematically invest through SIPs (Systematic Investment Plans). SIPs allow investors to invest a fixed amount at regular intervals, reducing the impact of market volatility on investments.
ELSS funds not only provide tax benefits but also offer the opportunity for long-term capital appreciation. It is essential to understand the risks associated with ELSS funds and consider one's risk appetite and financial goals before investing.
Common Misspellings for ELSS
- 4lss
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- 3elss
- e3lss
- elzss
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- elxss
- elsxs
- eldss
- elsds
- elwss
- elsws
- elssx
- elssd
- e lss
- el ss
- els s
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