Equity Linked Savings Scheme(ELSS) One stop solution for Tax Planning

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1 Equity Linked Savings Scheme(ELSS) One stop solution for Tax Planning

2 Equity Linked Savings Scheme (ELSS) is one of the most popular avenues of saving taxes. Like most investors, you may have the following queries: What are the key factors that you should consider for Tax Planning? What is ELSS and why should you invest in it? How should you choose the right ELSS fund? How to invest in ELSS through ICICIdirect.com? Let us answer these, one by one

3 Tax Planning Key Factors to consider Let us first understand.. What is a Mutual Fund? How much Tax you can save? Deductions of upto Rs 1.5 lakhs Investment in instruments eligible for To begin with, let s first understand - What is a Mutual from Fund taxable and income how does - Tax it saving deductions under Section 80C of IT Act work? of Rs 46, 350* * Considering highest tax slab Factors to consider before investing in a tax saving instrument? Where to invest? Instruments which offer regular income: Bank Fixed Deposits, National Savings Certificates (NSC), PPF Instruments which offer growth potential: ELSS, National Pension System Why Lower to invest? Lock in Period Not only for tax savings but also for wealth creation For Convenient what period Investment to invest? Options Investment should have lower lock-in so that it could meet your future cash flow requirements ELSS could be one-stop solution for all your Tax Planning needs!

4 What is ELSS and why should you invest in it? What Let us is first Equity understand.. Linked Savings What Scheme is a Mutual (ELSS)? Fund? ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act. To begin with, let s first understand - What is a Mutual Fund and how does it work? It offers the twin-advantage of capital appreciation and tax benefits. Investment in ELSS has the lowest lock-in period of three years. ELSS Key Advantages Lowest Lock in Period Tax Free Gains Convenient Investment Options Dual advantage of Tax Savings & Potential for long term wealth creation Let us discuss these, one by one

5 Why should you invest in ELSS? Lowest Lock-in Period Tax Free Gains Tax Saving Instruments Lock-in period Tax Saving Instruments Tax Treatment of Gains ELSS 3 years from the date of allotment of units ELSS Capital Gains & Dividend are Tax Free National Savings Certificates (NSC) 5 years or 10 years National Savings Certificates (NSC) Interest is Taxable Public Provident Fund (PPF) 15 years( Partial withdrawal after 7 th year) Public Provident Fund (PPF) Interest is Tax free Bank Fixed Deposits 5 years Bank Fixed Deposits Interest is Taxable National Pension System (NPS) Lock- in till the age of 60, Withdrawal of 25% allowed in special circumstances after 10 years in Tier I a/c National Pension System (NPS) 40% of Lump Sum withdrawal on attainment of 60 years is Tax-exempt Convenient Investment Options Liquidity Lump Sum Investment as low as Rs 500 in one transaction Systematic Investment Plan Regular periodic investment with an amount as low as Rs 500 Twin Benefits Tax benefits Tax Savings upto Rs 46, 350* u/s 80C Long Term Wealth Creation Investment in Equity helps in wealth creation as it gives real positive returns * Considering highest tax slab

6 How should you select the right ELSS Fund? Select the right ELSS Fund for investing from our Research recommendations Research Recommendations: Easily select top-rated ELSS Fund(s) recommended by our award-winning Research after extensive analysis. These recommendations are available in Top Picks tab of our Research recommendations in Mutual Funds Place Order page in the login section.

7 How should you select the right ELSS Fund? Our Research recommended ELSS Funds have consistently given better returns than markets! Returns w.r.t. benchmark of ICICIdirect Research Recommended ELSS Funds for one-time investment of Rs 50,000 Our recommended ELSS Funds have consistently performed better than benchmarks across time-periods 1,60,000 1,40,000 1,20,000 1,00,000 ~1.2 times the final value of benchmark 1,40,193 ~1.5 times the final value of benchmark 1,46,200 1,04,835 ~1.4 times the final value of benchmark 80,000 91,925 60,000 76,539 62,082 40,000 20, years 5 years 10 years Our recommended ELSS schemes Average Nifty50 Source: Accord FinTech, ICICIdirect Research, Data as on October 31, 2017, Returns shown are CAGR, Average Returns shown for recommended ELSS Funds. Click here to know more about our recommended funds.

8 How to invest in ELSS Funds through ICICIdirect.com? Invest in just a few clicks in top-rated ELSS Funds through the following modes: Lump Sum Systematic Investment Plan(SIP) You want to invest fixed amounts in a disciplined way on a regular basis.

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