(This article was first published on Yahoo Finance.)
Today is one of the two most important dates in the month of March. Today, the 8th, is International Women’s Day. It is a day that is dedicated towards the celebration of womanhood; it is a day to recognise the economical, political and social achievements of women. It is also a day when women gift themselves something special. Which brings us to the second important date of March–the 31st.
Being the last day of the financial year, 31st March is also the last day to make your tax-saving investments under Section 80C. And a tax-saving mutual fund, also known as ELSS fund, is probably the most useful thing that women can gift themselves on Women’s Day.
ELSS funds are equity-oriented mutual funds that earn the investor a tax break under Section 80C. You can invest up to Rs 1.5 lakh a year in these funds to save taxes. But only a small percentage of women invest in ELSS funds. This Women’s Day, this is also one change women should strive for. For modern working women, ELSS funds make a lot of sense for the following reasons:
Modern women can take risks
Sure, ELSS funds invest in the stock markets. This means that they are riskier than other tax-saving investment options. But the modern woman is fine with taking risks where they are required. She understands the benefits of these risks, which in the case of ELSS funds means higher, inflation-beating returns.
Modern women don’t settle for anything less
Why should you settle for something like PPF or fixed deposits that will give you guaranteed returns but not enough to help your money grow and create long-term wealth? Only equity has the potential to earn higher returns and make sure you not only save taxes, but fulfill your financial goals as well.
Modern women are getting financially stabler
Traditionally, taxes and investments have been a male-oriented domain. Women rarely indulged in them, even when they earned an income themselves. They relied on their father, brother or husband to worry about taxation and investing for them. But as Bob Dylan would say, The Times They Are A-Changin’. Women are a major part of the Indian workforce today and a wide majority of them do their taxation and investments themselves.
Modern women know what they want
The modern woman has a fair idea of what she wants from life. She has her own goals and dreams that she works hard to achieve and fulfill. This is where ELSS funds can help you because they will give you an exposure to the stock markets without you having to worry about which sectors or stocks to invest in. ELSS funds are managed by professional fund managers who use their experience and acumen to select areas of the economy and companies within those areas to invest in. This way, you get the benefit of inflation-beating returns from equities without requiring a deep understanding of the stock markets. All you need to do is select a couple of good ELSS funds to invest in and you’re set.
Apart from these, another benefit of ELSS funds is that they come with a short lock-in period of only 3 years. When you invest in other fixed income tax-saving options like PPF or fixed deposits, you have to stay invested for a longer period. With ELSS funds, your money stays locked in for only 3 years. What’s more, you can change your funds any time you want. If you’re unsatisfied with the performance of one fund, you can stop investing in it and start fresh investments in another ELSS fund.
So, celebrate this Women’s Day by investing in ELSS funds and giving yourself not just one gift, but two–saving on taxes and tax-free returns to build wealth. But remember, you have only till 31st March to make investments that can help you save taxes for this financial year.