Plan karo, Invest karo!
Welcome back to our course on ELSS funds & tax-saving strategies. Let's dive into an example that will help you understand the timeline and investment limits for availing tax benefits.
Imagine you're planning your finances for the financial year 2021-22. To claim tax benefits through ELSS funds, you must make the investment within that particular year, which is from April 1, 2021, to March 31, 2022. You have the opportunity to invest up to Rs 1.5 lakhs in ELSS funds during this period.
It's essential to keep in mind that investing more than Rs 1.5 lakhs won't provide any additional tax benefit in the current or subsequent financial years. However, the excess amount will still be subject to the mandatory 3-year lock-in period.
You have the flexibility to choose how you want to invest in ELSS funds. You can opt for monthly investments through Systematic Investment Plans (SIP) or make lump sum investments. Additionally, you can even invest in multiple ELSS funds. For example, you can allocate Rs 50,000 to ELSS-1, Rs 60,000 to ELSS-2, and Rs 40,000 to ELSS-3, as long as the total investment in all ELSS funds remains within the Rs 1.5 lakh limit.
It's important to note that if you're already investing in other tax-saving options under section 80C, those investments must also be considered within the Rs 1.5 lakh limit. This includes options like NPS, NSC, PPF, ULIP, SSY, and children's tuition fees.
By strategically planning your ELSS investments alongside other section 80C investments, you can maximize your tax-saving potential and optimize your overall financial planning.
Stay tuned for our next post, where we'll test your knowledge on ELSS funds and tax-saving strategies.