Invest for Income Tax Benefit : ELSS betters RGESS..!
Budget Expectations 2016-17..!
According to data with depositories NSDL and CDSL, just
over 52,000 Rajiv Gandhi Equity Savings Scheme (RGESS) accounts have been
created as of December 2015 with total investments of about Rs. 145 crore (at
cost of acquisition).
Compare this with the Rs.
2,903 crore invested in equity-linked savings schemes (ELSS) funds in
just this financial year (2015-16).
 |
| C VR Rajendran, CEO, AMFI |
Investments in ELSS funds are already eligible for tax
exemptions in the Rs. 1.5 lakh limit under Section 80C. “But 80C is
over-crowded with exemptions for provident fund (PF) investments , housing loan
re- payments, and insurance premium expenses, among others,” says C VR
Rajendran, CEO, AMFI.
“The investment limit gets used up very quickly and
investors are not able to claim tax benefits for their ELSS investments. By
allowing ELSS under Section 80CCG, all retail investors and those under the
high-tax brackets will benefit & can claim higher deductions on their
equity investments,” he said.
ELSS funds are basically diversified mutual funds that
invest over 65% of their corpus in equities. Up to Rs. 1.5 lakh invested in
ELSS funds in a year is eligible for deduction under Section 80C, while
dividends earned and long-term capital gains are tax-free.
AMFI believes that the government can more effectively
increase the retail investor base if it allows an additional exemption for ELSS
investors.
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