1. For "long-term investment purposes", ELSS Funds continue to remain the best bet in the Sec 80C options as:-
a) The lock-in period is shortest - only 3 years - with full tax exemption on redemption.
b) Unlike PPF, Ulips and pension plans, there is no maturity date and you can remain invested for a longer period if you want.
c) Unlike PPF, you can invest more than the Sec 80C limit, and continue to add (anytime) or redeem (anytime after lock-in) any amount for any number of years, and continue to avail Sec 80C benefits within its specified limit every year.
2. New investors should distinguish between the various options while applying for them.
a) The 'dividend' option is only a profit-booking exercise since a fund's NAV reduces by the amount of dividend paid.
b) In the 'growth' option, the amount remains invested for the entire tenure, and has the potential to generate higher returns.
c) Avoid the 'reinvestment' option because you will find it difficult to exit the fund completely, as there will always be some units that have not completed the lock-in period.
a) The lock-in period is shortest - only 3 years - with full tax exemption on redemption.
b) Unlike PPF, Ulips and pension plans, there is no maturity date and you can remain invested for a longer period if you want.
c) Unlike PPF, you can invest more than the Sec 80C limit, and continue to add (anytime) or redeem (anytime after lock-in) any amount for any number of years, and continue to avail Sec 80C benefits within its specified limit every year.
2. New investors should distinguish between the various options while applying for them.
a) The 'dividend' option is only a profit-booking exercise since a fund's NAV reduces by the amount of dividend paid.
b) In the 'growth' option, the amount remains invested for the entire tenure, and has the potential to generate higher returns.
c) Avoid the 'reinvestment' option because you will find it difficult to exit the fund completely, as there will always be some units that have not completed the lock-in period.