<p dir="ltr">With a salary income of Rs. 20 lakh crores declared in the ITRs filed for the financial year 2017-18, 58% of the overall income of the Individual taxpayers is contributed by income from salaries. </p>
<p dir="ltr">Source- Income Tax Return Statistics by Income Tax Department. </p>
Systematic Investment Plan (SIP) allows an investor to invest regularly in mutual funds on periodic intervals. As such, it enables investors to steer through the market movements effortlessly. Indian retail investors also prefer to invest in the markets through SIPs, as is evident from the monthly SIP inflows, which have sustained above Rs. 8,000 crores for more than a year now (Source: Association of Mutual Funds in India – AMFI, as on 31st December 2019).
Market indices such as S&P BSE Sensex, NSE Nifty50, etc. are created by adopting scientific methodologies and back-tested techniques. As such, the investors may wish to invest in such indices to have smooth investment experience. However, since such indices are not tradable security in themselves, it is a difficult proposition for the investors to construct a similar investment portfolio, which replicates such an index. Index funds may be suitable to meet such investing needs.
Equity Linked Saving Schemes (ELSS) is one of the available investment options under Section 80C and is steadily emerging as a preferred investment choice amongst the investors for tax saving. This is also reflected in the ELSS Category AUM (Assets Under Management) of Rs. 1.04 lakh crores as on 31st December 2019 amounting to around 4% of the overall industry AUM.
<p>To accomplish your personal financial goals, it is paramount that you invest regularly and steadily move towards the goal. Just as it is vital to invest periodically, choosing the right investment tool is equally important. You can also choose to invest directly in stocks, or invest in markets through mutual funds. Knowing the difference between stocks and mutual funds is essential to start your investing journey. If you are in a dilemma of investing in mutual funds vs stocks, this article will help you in your decision-making process.</p>
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<p style="display:none">Having secured the fundamentals it is time to ensure that the hard work you put in to earn your money does not go wasted and you make your money work as hard as well.</p>
<h2 style="font-size:21px"><strong>Building a comfortable path</strong></h2>
Systematic Investment Plan (SIP) allows the investors to invest in a mutual fund scheme of their choice at periodical intervals. It automates the investment process once the investor has completed the registration process, as the investments continue to be regularly made irrespective of market ups and downs.
Amidst the persisting market volatility, the monthly SIP (Systematic Investment Plan) inflows into mutual funds have sustained over Rs. 8,000 crores for 16 months. (Period- Dec 2018 – March 2020). Source: Association of Mutual Funds in India
ELSS (Equity Linked Savings Scheme) has been one of the available investment options under Section 80C, which allows a tax benefit of investment up to Rs. 1.50 lakh in a financial year. Further, besides the tax benefit, the taxpayers can also invest in ELSS to club their financial goals and tax plans.
Section 80C of the Income Tax Act provides various investment options to the taxpayers to be eligible for a tax benefit. While many taxpayers prefer tax-saving fixed deposit (FD) due to more natural investment process and guaranteed returns, ELSS (Equity Linked Savings Scheme) has been emerging as a preferred tax saving investment option off late.
