Starting an Equity-Linked Saving Scheme (ELSS) through a Systematic Investment Plan (SIP) in April has several benefits. Here are a few reasons why:
The financial year begins in April: The financial year in India starts from April 1st and ends on March 31st of the following year. By starting an ELSS SIP in April, you can align your investment with the financial year, making it easier for you to plan and track your investments.
Time in the market: By starting your ELSS SIP in April, you give your money more time to grow. Over the long term, equity investments tend to perform well, but they can be volatile in the short term. Starting your SIP in April gives you a head start and more time in the market to benefit from the power of compounding.
Tax benefits: ELSS funds offer tax benefits under Section 80C of the Income Tax Act, 1961. By starting an ELSS SIP in April, you can spread your investments over the entire financial year and make the most of the tax benefits available to you.
Rupee cost averaging: Investing through an SIP allows you to benefit from rupee cost averaging. By investing a fixed amount at regular intervals, you buy more units when the market is down and fewer units when the market is up. This helps you to average out the cost of your investment over time.
Overall, starting an ELSS SIP in April can be a smart way to begin your tax-saving and long-term investment journey. However, it’s important to do your own research and consult with a financial advisor to make sure it’s the right investment option for you.
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