ELSS vs PPF – Compare & Choose Best Tax Saving Plan


Hi everyone welcome to this conversation
on ELSS and PPF. My name is Dipika Jaikishan and I am from MyWay Wealth ELSS or otherwise called Equity Linked Saving Schemes. Are mutual fund investments
providing a tax benefit, PPS or public
Provident Fund very widely known back by the central government gives us a
fixed rate of return and is a widely chosen option for investment in that
savings. So which one of these will come and aid when you need money in time of
an emergency. It is important to keep in mind that appear PPF investment is
locked in for 15 years a partial withdrawal can be made after the seventh
year and the fund can be withdrawn prematurely in case of situations such
as severe medical emergencies. Also in such a time the funds should have at
least completed five years and ELSS is nothing but a diversified equity fund
with a lock-in period of three years. Post this period of three years you can
withdraw your money at any point in time. For any reason that you might need it. If I were to simply compare the taxability on the ELSS and the PPF the case for ELSS still is stronger while the PPF is tax-exempt at the time of investment so
as to say that if you make a one and a half lakh rupees investment in the PPF
its tax-exempt also when the money matures after 15 years your returns are also tax-free in the case of ELSS which is eventually
nothing but an diversified equities fund. The tax treatment is like that of any
other equity stock or equity mutual fund. Suppose I make an investment of 1.lakh
in a ELSS fund and at the time of maturity of 5 years later the value of
my fund is two and a half slabs. The First one lack of profit is tax-free
which means any equity gains of up to one lakh are tax-free and there is a
flat 10% tax on the residual amount. In this case I’ve made a profit of one and
a half lakhs where I would pay a 10% tax on 50 thousand which is five thousand
rupees. If I were to compare the returns on the PPF and the ELSS they’re
significantly different. Let’s assume I made an investment of one
lakh rupees into the ppf in 2010
January and I’m in an investment of 1 lakh rupees into an ELSS at the same
time the value of my PPF investment right now would be close to about 1.8
lakh rupees while my investment value of the ELSS would be about 2.9 lakh rupees.
It’s for you to see how beneficent it might be for you to invest into the
Equity Link Saving Scheme. If you were to ask me Deepika should I make an investment in the PPF and in the ELSS I
would say no reason being you probably already have 24% of your basic going
into your employee Provident Fund the employee Provident Fund and the public
problem fund are not too different from the point of view of return. In fact your India freedom is slightly higher than that of the PPF while you already have
24% of your basic going there it would make complete sense for you to make
investments equity-linked savings scheme which
would outperform an investment like PPF over a 15-year period. Coming to the part of how do you invest into an ELSS fund Interestingly you could download the MyWay Wealth app on the App Store or on the Play Store on the app we have an
option of save tax. All you have to do is plug in the amount of investment that
you want to save as taxes and we would recommend the most suitable funds for
you and help you invest going ahead.

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