Is it the right time to invest in ELSS? Should it be through SIPs or should I do it all in one go?
It is a good idea to consider tax savings at the beginning of the year to avoid last minute delays and surprises
Is it the right time to invest in ELSS? Should it be through SIPs or should I do it all in one go?
Sumit Singla, Gurgaon
The new financial year has just commenced and it is a good idea to consider tax savings at the beginning of the year to avoid last minute delays and surprises. Equity linked Savings Scheme (ELSS) is a good tax saving option, and you could consider investing in Franklin India Taxshield or DSPBR Tax Saver as funds to invest in. Both these funds have a history and performance track record over different market cycles to go by and also feature in the OLM Elite list. Although SIP as a choice from the point of view of convenience and spreading the risk is preferred when investing in diversified equity funds, in case of ELSS as the investment lock-in is three years, if you invest with SIPs, each month’s investment will need the three year lock-in. To avoid such a situation, you will be better off by investing in ELSS in lump sum on 2-3 occasions in the year to get the most of the investment and tax savings.