“Mirror, mirror on the wall, who’s the biggest saver of them all?”
”Holidays are over and boy did you shop! Fancy cosmetics and clothes for the women in your life. New earphones, mobile phones, suits, eyeglasses, strollers … even gifts for your new pet dog!! Now it’s time to pay the bills. But, you took advantage of all the online sales and you got so much more for your money. You felt really good about yourself when you calculated all your savings! But have you really saved????
The unsuspecting office chaiwalla has the answer.
Is shopping during e-commerce sales really the best way to save Tax.
The frugal office chaiwalla doesn’t waste his time searching for online sales to save a few rupees. He focuses on the “big bucks.” How??? He then explains, “You can say save tax or increase the amount your take-home”
Irrespective of how much you earn, everyone suffers from tax trauma! Writing a big check to the Income Tax Department every year is tough. The chaiwalla figured out one way to ease his pain and save income tax.
What’s the “DSP Maha Tax Bachat Festival?”
Most of us waste a lot of time chasing online discounts and small savings during "sales" & "festivals", while we end up forgetting one of the biggest savings of them all: tax savings!
As the chaiwalla figured out, the easiest way to save tax and invest in your future is by investing in mutual funds. Is there a mutual fund scheme that saves tax while also aiming to create wealth? An Equity-Linked Saving Scheme or ELSS is a solution that takes advantage of Section 80C of the Indian Income Tax Act while investing in equity and equity related securities which aim to generate long term wealth. Section 80C allows up to Rs. 1.5 lakh of annual income to be shielded from tax. One such ELSS fund is the DSP Tax Saver Fund. Join the DSP Maha Tax Bachat Festival today and start to save tax.
Before I Invest in DSP Tax Saver Fund say, I need more information on ELSS.
How may an ELSS help in generating tax savings?
An ELSS, or an Equity Linked Savings Scheme allows for a deduction from total income of up to Rs. 1.5 lakh. For example, if an investor invested Rs. 1,50,000 in an ELSS, this amount would be deducted from total income to reduce taxable income in that particular year. How does this help? Because taxable income is reduced by Rs 1.5 lakh, less tax is paid!
It would be unfair to suggest that only an ELSS helps you reduce tax under Section 80C. There are a few other options. However, among the other tax-saving options such as public provident funds, tax saving FDs, national savings certificate, etc., ELSSs offer a few distinct advantages:
- Potentially higher-market linked returns: An ELSS has the potential to create long-term wealth as the investment is generally in a diversified equity mutual fund. In addition, long term capital gains (profits earned from any equity mutual fund investment held for over 1 year) up to Rs. 1 lakh a financial year are exempt from income tax, while long-term capital gains above Rs. 1 lakh are taxed at 10% (plus applicable surcharge and health and education cess).
- Shortest lock-in period: ELSSs are like any other equity mutual funds, but they have a three-year lock-in period, which means you cannot sell your investment before three years from the date of allotment. This also means that with an investment in ELSS via systematic investment plan (SIP), each individual installment is locked in for 3 years from the date of installment. This 3-year lock-in in an ELSS is the shortest of all 80C investments.
- Greater flexibility: Investing in an ELSS is simple. The investment can be made via a SIP or as a one-time (lump sum) investment. Most investors continue to hold ELSS units even after the 3-year lock-in has expired to try to create long term wealth (>10 years). If you need the money post three years, you can redeem based on applicable NAV at time of transaction.
You can be the “biggest saver!”
Join the DSP Maha Tax Bachat Festival today and start realizing the benefit of tax saving by investing in DSP Tax Saver Fund. Click here to invest.
Check out this, fun, relatable campaign that will especially resonate with online shoppers from across India. The “Secret Society of Savers” will make you laugh and will show where the real savings are located! At the DSP Maha Tax Bachat Festival.
Income tax benefits to the unit holders are in accordance with prevailing tax laws.
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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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