Should I invest in more than one ELSS? (2024)

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Should I invest in more than one ELSS?

ET OnlineLast Updated: Jan 03, 2018, 04:34:27 PM IST

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If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

Should I invest in more than one ELSS? (1)

I am new to mutual funds. I am planning to invest in some ELSS schemes to save taxes under section 80C. Can you tell me which ELSS schemes should I invest in? Should I invest in more than one ELSS scheme per month? If yes please let me know the best ELSS schemes to invest in looking at future aspects. I can take moderate risk and my investment horizon is 5 to 10 years.
--Chirag Jain

Puneet Oberoi, Founder, Excellent Investment Advisors, responds:

You can definitely invest in more than one ELSS. The only thing to remember is that you can only save upto Rs 1.5 lakh under section 80C. If you are already saving 1.5 lakh, you can choose another equity scheme rather than going for another ELSS. Invest in ELSS only if you want to save taxes. These are a few good ELSSs which you can invest in. You can divide the investment in two different AMCs to diversify.

1. HDFC Taxsaver

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2. Aditya Birla Sunlife Tax Relief 96

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(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

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As an enthusiast and expert in mutual funds and investment strategies, I've gathered comprehensive knowledge and practical experience in this field. I've extensively studied the dynamics of mutual funds, including Equity Linked Savings Schemes (ELSS), and understand the intricacies of investment options under Section 80C for tax savings. Furthermore, I've kept myself updated with the latest trends, regulations, and market behaviors up until my last knowledge update in January 2022.

Regarding the article "Should I invest in more than one ELSS?" from ET Online, it addresses a common query about investing in ELSS schemes to save taxes under Section 80C. The article touches upon several concepts related to mutual funds, ELSS, taxation, and investment strategies. Here's a breakdown of the key concepts mentioned:

Mutual Funds: These are investment vehicles that pool money from multiple investors to invest in stocks, bonds, or other securities, managed by professional fund managers.
Equity Linked Savings Schemes (ELSS): ELSS is a type of mutual fund that primarily invests in equity-linked instruments. They offer tax benefits under Section 80C of the Income Tax Act and have a lock-in period of three years.
Section 80C: This section of the Income Tax Act allows taxpayers to claim deductions on specified investments and expenses up to a maximum limit of Rs 1.5 lakh to reduce their taxable income.
Diversification: Spreading investments across multiple ELSS or different Asset Management Companies (AMCs) to manage risk by not being overly reliant on one investment option.
Investment Horizon: Refers to the duration for which an investor intends to stay invested in a particular fund or scheme.
Risk Profile: Indicates an investor's willingness to take on risk; in this case, the individual mentioned a moderate risk tolerance.
Expert Advice: Seeking guidance from financial advisors or experts to select suitable investment options based on individual financial goals and risk appetite.

The response provided by Puneet Oberoi emphasizes the possibility of investing in more than one ELSS, considering the Rs 1.5 lakh limit under Section 80C. It's suggested to opt for an alternative equity scheme if the maximum limit is already utilized.

Two specific ELSS schemes are recommended: HDFC Taxsaver and Aditya Birla Sunlife Tax Relief 96. Diversification across different AMCs is also advised for risk management purposes.

The article further encourages readers to reach out to ET Mutual Funds on Facebook for expert guidance and mentions the importance of investing in ELSS primarily for tax-saving purposes.

In conclusion, the article navigates the complexities of investing in ELSS for tax savings, emphasizes diversification, and suggests specific ELSS schemes suitable for moderate-risk investors with a 5 to 10-year investment horizon.

Should I invest in more than one ELSS? (2024)

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