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Can I invest in ELSS mutual funds even if I do not need tax benefits?

I have completed by the 80C limit of 1.5 lac with PF and Insurance premium. Can I still invest in ELSS mutual funds?

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2 Approved Answers

Pijush Kanti Biswas

Yes, you can invest in ELSS even if you do not need tax benefits. You can invest in same manner you do in other equity mutual funds.

Equity Linked Savings Scheme (ELSS):

  1. ELSS is a dedicated mutual fund scheme that allows investors to save tax. It also provides an opportunity for long term capital appreciation.
  2. An ELSS fund manager invests in a diversified portfolio, predominantly consisting of equity and equity related instruments that carry high-risk and have the potential to deliver high-returns.
  3. Features of ELSS Funds:
  • Multi cap funds
  • Tax-saving
  • Three-year lock-in period
  • Can be held even after the completion of three years
  • Offers dividend as well as growth options
  • Tax Saving instrument

But the question is whether you should invest or not. ELSS, being a tax saver fund have 3 years of lock-in period. So, if you are not investing in these funds for tax saving purpose, then it will give you very low liquidity as you cannot redeem your money before 3 years. Also, if are ready to invest in such a long period of 3 years and more, than better performing Multi cap funds to invest in with the flexibility of anytime withdraw. So, choose wisely as per your investment goal.

If you want to invest in ELSS, these are popular ELSS for 2017:

If you want to invest in other multi cap fund, these are some popular multi cap funds for 2017:

 

Happy Investing!

Harsh

Yes you can invest in ELSS whether you need or not need tax saving investments. ELSS are just another kind of open-ended Mutual Funds. These are mostly multi-cap equity funds that give good returns in growing market. 


Should you invest?

ELSS has 3 year lock-in period. Meaning, you cannot redeem your money before 3 years of investment. Also, you can find better performing Multi cap funds to invest in with the flexibility of anytime withdraw. Therefore I would say, don't invest in ELSS unless you are claiming the investment for tax benefits under section 80c. 


Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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