RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

Tax efficient Mutual Funds - why SIP helps

down-arrow
Tax efficient Mutual Funds - why SIP helps
March 16, 2019
 

For any potential high returns on investment, it is very important for you to take informed investment decisions. Any decision to invest your funds has to be taken after duly comparing the various plans that are on offer. These days, mutual funds (MFs) have emerged as one of the primary beneficial modes of investment and people invest in mutual funds for the rate of optimum returns that they offer. However, when viewed from the point of view of taxation, mutual funds do not have offer significant benefits. Apart from the limited tax benefits, mutual funds also come under the purview of LTCG (Long Term Capital Gains) taxation. However, there is an exception to this general truth about mutual fund-investment. This exception comes in the form of Tax-efficient mutual funds. The mutual funds that generally come in this category are ELSS or Equity-Linked Savings Schemes. ELSS is the category of mutual-funds that utilizes equity-based instruments as vehicles of investment and at the same time, offers tax benefits under Section 80C of the Income Tax Act, 1961. Under this Section, payable contributions towards ELSS are eligible for tax-exemptions up to a limit of Rs. 1.5 Lac in the given financial year.

An ELSS comes with a lock in period of three years which is significantly lower than that of ULIPs (which have a lock-in period of five years). This not only ensures disciplined and regular investments but also makes ELSS suitable for short term pursuits of capital gain. This can be effectively done through a Systematic Investment Plan (SIP). An SIP enables the investor to put in regular amounts of premium at pre-decided intervals towards maintaining the ELSS and therefore, an SIP guarantees that the investor does not have to fret about limited availability of surplus funds for investment purposes.

Investments made towards ELSS have a set of beneficial and market-linked returns that may be garnered over a period of time. These benefits may either be in the form of a lump-sum payment, which is payable after the maturity of the scheme term or in the form of regular payouts, which are payable throughout the scheme term. This serves as a point of classification between these tax-efficient mutual funds. ELSS can be broadly classified as growth-driven schemes and dividend-driven schemes. A dividend oriented ELSS is the one that offers regular pay outs from the invested corpus during the term of the scheme. Since ELSS comes with a lock in period of three years, therefore, the scheme term for the regular payouts can be taken to be three years. In contrast, a growth oriented ELSS is the one that has the main feature of a single, lump-sum payout to which the investor is entitled after the maturity of the term of the scheme.

HDFC Life offers various savings and investment plans that are aimed at ensuring the growth of your funds and securing your financial future. For details, click on the mentioned link: https://www.hdfclife.com/savings-plans.

 

 

Plan Income Taxt

Show Full Article
Hide Full Article

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

LinkedIn profile
Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Income Tax Saving Tips for Young Earners

Income Tax Saving Tips for Young Earners

Many young earners are unaware of the whole tax system & its working. Here is a list of income tax saving tips for young earners to help them save more!

What is Tax Declaration Form? - Process to File Income Tax Declaration

Tax Savings Strategies for Salary above Rs 30 lakh in India

Best Investment Options for Senior Citizens in India

Find the best Investment Options For Senior Citizens in India with HDFC Life. Uncover senior citizen investment options tailored for stability and growth.

Best Investment Options for Senior Citizens in India
Five mistakes you must avoid while investing to save income tax Previous
Download Form 26AS through TRACES Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Popular Search

Popular Searches