Whenever you have allocable surplus, however small it could be, think of investing it in diverse
portfolios rather than in one or two. When you do that you have to weigh the investments in three key scales such as safety vs risk, liquidity and returns (ROI). Another area of attention needs to be in the matter of tax liability arising on account of the investments. When it is taxable, the net return will be far less than anticipated and with the rising inflation numbers your investments may actually give a negative resultant return which we should be aware of.
In this context , it is worth looking at Equity Linked Savings Scheme (ELSS) as the top choice with least risk.
The merits of ELSS are as follows:
- Full tax benefits available for the investments in ELSS
- Lock-in period is only Three years in ELSS vs PPF- 7 years, Bank deposits-5 years
- LIC and NPS lock in is till maturity, although may get loan in LIC
- Stock markets have given consistently better returns than others
- ELSS investments are mostly in Shares which give double digit returns in medium/long term
- Bank deposits give single digit returns and also taxable beyond a limit
- But ELSS investment is a double stroke benefit- Capital gains plus tax savings
- Of course the relevant long term tax of 10 % will be applicable.
- So take up ELSS investments right now, save under SIP
- Industry data shows return under ELSS has been 19.7 % p.a (TOI)
- Reach Goodwill Wealth Managers right now for your investments!
Goodwill Team
