ELSS mutual fund investment deadline is March 28 for Section 80C tax benefit; how much can you invest?
Upstox
2 min read • Updated: March 28, 2024, 2:01 PM
Summary
ELSS funds are mutual funds that offer tax benefits of up to ₹1.50 lakh under Section 80C of the Income Tax Act. They are equity funds that invest the majority of their corpus into equity and equity-related instruments.
The financial year (FY) 2023-24 ends on March 31, 2024, and individuals following the old tax system must finish their tax-saving investments and expenses before that. However, this year, the deadline falls on Sunday.
Banks will remain closed on March 29 due to Good Friday. However, they will be operational on Saturday, March 30. Similarly, stock markets and mutual fund houses will remain shut on Good Friday and weekend. So, if you plan to invest in equity-linked savings scheme (ELSS) mutual funds, it should be done before March 28 to avail of tax deduction under Section 80C of the Income Tax Act.
Securities and Exchange Board of India (SEBI) guidelines advise investors of timely fund crediting to the mutual fund's bank account.
To secure net asset values (NAV), the mutual fund units should be purchased before 3 pm when stock markets are open. If the funds are purchased after 3 pm, the NAV will be reflected on the next working day.
Also read: From EPFO to taxation rules: Six key financial changes to be effective from April 1
What are ELSS funds?
ELSS funds are mutual funds that offer tax benefits of up to ₹1.50 lakh. They are equity funds that invest the majority of their corpus into equity and equity-related instruments.
An ELSS fund carries a three-year lock-in period and is subjected to market risk. They usually invest in multiple equities from various sectors to mitigate risk and provide stability to your portfolio.
Also read: Income tax return: How to reduce taxes by setting off losses in stock markets
How much can you invest in ELSS?
ELSS investments can be started with as low as ₹500 per month. There is no upper limit for the investments. Individuals can invest via a systematic investment plan (SIP) or a lump sum.
ELSS provides long-term gains. However, gains over ₹1 lakh in a fiscal year are subject to 10% long-term capital gain (LTCG) tax. Gains below ₹1 lakh in a financial year are exempt from LTCG tax, making it an attractive investment option.