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What is Tax saver fund ?
A Tax Saver Fund, also known as an Equity Linked Savings Scheme (ELSS), is a type of mutual fund in India that provides tax benefits under Section 80C of the Income Tax Act. These funds primarily invest in equity and equity-related instruments, offering potential for capital appreciation along with tax savings.
Investments in Tax Saver Funds are subject to a lock-in period of three years, during which units cannot be redeemed or sold. This lock-in promotes long-term investment and wealth creation. Additionally, investments in Tax Saver Funds are eligible for a tax deduction of up to ₹1.5 lakh in a financial year under Section 80C. While these funds offer tax benefits, they also carry market risks associated with equity investments. Investors should consider their investment goals, risk tolerance, and consult with a financial advisor before investing.
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