Mutual Fund Vs ELSS: In the last few years, people have been investing in the stock market and mutual funds for savings. Because mutual funds are more attractive in terms of returns. But, do you know that ELSS (Equity Linked Savings Scheme) provides more convenience than mutual funds? The returns of both mutual funds and ELSS depend on the stock market. Equity Linked Savings Scheme is a different form of mutual fund in a way. The most important thing is that the facility which is not available in mutual funds is available in ELSS, let us tell you how…

Is ELSS more beneficial than mutual funds?

-ELSS i.e. Equity Linked Savings Scheme is a type of government-backed mutual fund. Its main purpose is tax saving. There is no tax exemption in mutual funds but ELSS provides tax exemption under section 80c of Income Tax.

-However, ELSS has a lock-in of 3 years i.e. money cannot be withdrawn before 3 years after investing. But, there is no lock-in period in mutual funds.

-There is not much difference between ELSS and mutual funds in terms of returns. Since investment in both is subject to market risks, the return also depends on the market movement. 80 percent of the investment made in ELSS is invested in the stock market. Unlike mutual funds, there is no option for different funds for investment in ELSS.

ELSS is a private investment scheme, which is run by mutual fund companies registered under SEBI. It is a tax-saving option recognized by the government. If you want to save tax along with returns, then the Equity Linked Savings Scheme is a very good option.

(Disclaimer: Investment in mutual funds and the stock market is subject to market risks, so consult a certified investment advisor before investing.)

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