Hi Sir, I am new in investments, planning to take an ELSS, as its equity and returns are decent, I wanted to go for 15/20 yrs, already shortlisted axis long term equity and franklin india tax shield. Now, issue is, I came to know, If I start SIP on june, 2016, and for 15 years, it will mature in June, 2031, next SIP will mature in July 2031, next SIP august 2031. 1.Is it true? 2. If yes, then shall I avoid ELSS bcz the money will be stuck for 30 years. 3. If I avoid ELSS, how can I build long term wealth? Large cap equity stocks & mid cap? 4. If I avoid ELSS how can I save tax?(30% tax bracket) I have PPF only. Thanks. Keep rocking!
Whether you want to invest in ELSS only by looking at their best returns or for tax saving purpose? Your understanding of lock-in of SIP is wrong. But first let me know the reason for selecting ELSS, then we discuss on this matter.
Sir, as I am in 30% tax zone, i need to save taxes. I have options PPF/ELSS. already have PPF, since top ELSS reports in moneycontrol, n other sites are showing good returns in last 5 years, I was planning to start an ELSS both to save tax under 80C and to build wealth in long term (15 years). This is only 1 part of the portfolio, I am studying about MF in detail and will start SIP in large cap also for long term (20 years). My query stated in 1 st question was will my each SIPs in ELSS be locked for the entire tenure. for ex: last SIP in ELSS will be encashed 15 years after encashing 1st SIP.
Let us say you started a SIP on 1st May, 2016 for 15 years, then this monthly SIP is eligible for withdrawal after 3 YRS completion, but not after 15 years. Keep in mind that each your monthly SIP is considered as fresh investment for mutual funds. As per the rule, ELSS funds are lock-in for 3 years ONLY (irrespective of for how long you invest). So practically, after 18 years from 1st May, 2016, you are eligible to withdraw all your investment. The first SIP will be eligible for withdrawal after 1st May, 2019 and so on the rest of units you invested through mutual funds. Hope you got a clarity now.
thanks. got it.