Save tax on equity

Taxation
1

Let’s say I have capital gains from equity and I have to pay tax for it. Can i save this tax using elss funds?

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2

Yes.

First check whether the fund is tax exempted u/s 80C.
Also , ELSS funds will have certain lock-in period, typically 3 years. Read the scheme document before investing

3

Hi @Harsha_sai99 ,

Tax saving ELSS funds are eligible for deduction u/s 80C of the Income Tax Act, 1961 however one important thing to note here is that deductions mentioned u/s 80C are not eligible against:

  • Long term capital gains u/s Section 112

  • Casual income, Section 58(4)

  • Short term capital gain on sale of short term equity shares or short term units of equity-oriented mutual funds provided securities transaction tax has been paid, Section 111A

  • Long term capital gains on the sale of long term equity shares or long term units of equity-oriented mutual funds provided securities transaction tax has been paid, Section 112A

So, assuming you have only capital gains income, the tax-saving ELSS funds will not help you save taxes.

Hope it helps!

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