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.
