How to Get ELSS Statement for Tax Return?

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Are you looking for a way to get your ELSS statement for your tax return but feeling overwhelmed by the process?

Equity Linked Saving Scheme (ELSS) is a popular tax-saving investment in India, and obtaining the statement is crucial for filing your tax returns.

This article will guide you through the steps to get your ELSS statement hassle-free, so you can focus on maximising your returns and minimising your tax liabilities. Let’s get started.

ELSS Fund Definition:

Equity Linked Saving Scheme (ELSS) is a type of mutual fund that invests primarily in stocks or equities of companies.

It is a tax-saving investment in India where you can claim deductions under Section 80C of the Income Tax Act.

ELSS funds have a lock-in period of three years, meaning you cannot withdraw your investment before this period ends.

ELSS funds are considered a high-risk, high-return investment option, making them ideal for investors willing to take some risks to earn higher returns.

Key Characteristics of ELSS Funds:

ELSS funds have the following key characteristics:

Tax-Saving Investment:

ELSS funds allow you to claim deductions under Section 80C of the Income Tax Act, making them a popular tax-saving investment option in India.

Equity-Oriented:

ELSS funds primarily invest in equity or stocks of companies, making them a high-risk, high-return investment option.

Three-Year Lock-In Period:

ELSS funds have a lock-in period of three years, meaning you cannot withdraw your investment before this period ends.

SIP Investment Option:

ELSS funds can be invested in through Systematic Investment Plans (SIPs), which allow you to invest a fixed amount of money at regular intervals.

Diversification:

ELSS funds offer diversification across various sectors and companies, reducing the risk of investing in a single stock or sector.

Professional Management:

ELSS funds are managed by professional fund managers who make investment decisions on behalf of the investors based on their expertise and market analysis.

How to Download ELSS Statement for Tax Return

Through your investment platform:

  • Website or App of a Mutual Fund: Various mutual fund services, such as those provided by platforms like Zerodha and ET Money, allow users to obtain ELSS statements directly through their online interface or mobile application. You should navigate to areas labeled as “Tax documents,” “Statements,” or “Downloads” to find these documents.
  • Investment Brokerage Service: When you use an investment brokerage, for instance, Zerodha, acquiring your ELSS statement is straightforward. Access your account’s dashboard, proceed to the “Reports” section, then to “Downloads.” Here, you can choose the “ELSS statement” for the specific fiscal year you need.

Through the Registrar and Transfer Agent (RTA):

  • CAMS-Serviced Investments: For investments managed by CAMS, obtaining your ELSS statement is a simple process through their website. Navigate to the “Investors” section, then select “Statements” followed by “ELSS Statement.” Here, you’ll need to input your email ID and specify the financial year for which you require the statement.

Steps to Obtain Online ELSS Investment Proof:

The following are the steps to obtain online ELSS investment proof:

  • Log in To Your ELSS Investment Account: Visit the website of your ELSS fund provider and log in to your investment account using your credentials.
  • Locate the Investment Proof Section: Once logged in, look for the option “Investment Proof” or “Transaction History”.
  • Select the Relevant Financial Year: Choose the year you require the investment proof.
  • Generate the Investment Proof: Click on the “Generate” or “Download” button to obtain the investment proof. This will generate a PDF file that contains all the details of your ELSS investments for the selected financial year.
  • Save And Print the Investment Proof: Save the PDF file on your computer or mobile device and take a printout of the investment proof. This will serve as valid proof of your ELSS investments for tax filing purposes.

NOTE: Make sure to cross-check the details mentioned in the investment proof with your records to ensure accuracy.

If you face any issues while obtaining the investment proof, you can reach out to the customer support team of your ELSS fund provider for assistance.

Investing in ELSS Through a Demat Account:

Investing in ELSS through a Demat account means buying and holding ELSS units in a Dematerialized form.

The following are the steps to invest in ELSS through a Demat account:

Open A Demat Account:

If you don’t have a Demat account already, you need to open one with a Depository Participant (DP) of your choice. You must submit a few documents, such as ID proof, address proof, and PAN card, for verification.

Choose an ELSS Fund:

Select an ELSS fund of your choice and check if it is available for investment through your Demat account.

Place an Order:

Place an order to buy the ELSS units through your Demat account, specifying the number of units and the price at which you want to buy them.

Make Payment:

Pay for the ELSS units through the payment mode specified by your DP.

Receive Confirmation:

Once your payment is processed, you will receive a confirmation of your purchase of ELSS units in your Demat account.

Monitor Your Investment:

Monitor your ELSS investment’s performance regularly and file your taxes accordingly.

NOTE: ELSS units bought through a Demat account have a lock-in period of three years, and you cannot sell them before the completion of the lock-in period.

Maximising Tax Savings with ELSS Funds:

ELSS funds are an excellent way to maximise your tax savings while potentially earning higher returns. The following are some tips on maximising your tax savings with ELSS funds:

Invest Up to the Maximum Limit:

The maximum limit for tax deduction under Section 80C is Rs.1.5 lakh per year. Invest the maximum amount in ELSS funds to get the full tax deduction.

Invest Early:

Start investing in ELSS funds early in the financial year to take advantage of the power of compounding and earn higher returns.

Use SIPs:

Systematic Investment Plans (SIPs) allow you to invest a fixed amount at regular intervals, making investing regularly easier and maximising your returns.

Choose the Right Fund:

Do your research and choose an ELSS fund that aligns with your investment goals, risk appetite, and investment horizon.

Monitor Your Investment:

Keep track of the performance of your ELSS investment and make necessary changes if required.

File Your Taxes Correctly:

Make sure to claim the tax deduction on your ELSS investment while filing your taxes. You can do this by submitting investment proof to your employer or filing your taxes online.

Advantages of ELSS Mutual Funds for Tax Savings:

The following are the key advantages of ELSS:

Tax Saving Investment:

ELSS mutual funds allow you to claim tax deductions of up to Rs.1.5 lakh under Section 80C of the Income Tax Act. This means you can save tax on the amount invested in ELSS mutual funds.

Shorter Lock-In Period:

ELSS mutual funds have a lock-in period of only three years, which is shorter than other tax-saving investments like the Public Provident Fund (PPF) or National Savings Certificate (NSC). This means that you can access your money sooner if needed.

Potential for Higher Returns:

ELSS mutual funds invest primarily in equities, which can generate higher returns over the long term than other tax-saving investments like fixed deposits or bonds.

Systematic Investment Plan (SIP) option:

ELSS mutual funds can be invested in through SIPs, which allow you to invest a fixed amount of money at regular intervals. This makes investing regularly and building a sizeable corpus easier over time.

Diversification:

ELSS mutual funds offer diversification across various sectors and companies, reducing the risk of investing in a single stock or sector.

Professional Management:

ELSS mutual funds are managed by experienced fund managers who make investment decisions on behalf of the investors based on their expertise and market analysis.

Tax Benefits of Investing in ELSS Funds:

The following are the key tax benefits of investing in ELSS funds:

Tax Deduction Under Section 80C:

ELSS funds are eligible for a tax deduction of up to Rs.1.5 lakh under Section 80C of the Income Tax Act. This means that the amount invested in ELSS funds can be claimed as a deduction from the taxable income, reducing the tax liability.

Shorter Lock-In Period:

ELSS funds have a lock-in period of only three years, which is shorter than other tax-saving investments like the Public Provident Fund (PPF) or National Savings Certificate (NSC). This means that the investor can access their money sooner if needed.

Long-Term Capital Gains Tax Exemption:

Any gains realised on the sale of ELSS units after the completion of the three-year lock-in period are exempt from long-term capital gains tax.

No Dividend Distribution Tax:

Dividends received from ELSS funds are tax-free in the hands of the investor as there is no dividend distribution tax on equity mutual funds.

Potential for Higher Returns:

ELSS funds invest primarily in equities, which can generate higher returns over the long term than other tax-saving investments like fixed deposits or bonds.

No Tax on Switching Within ELSS Funds:

ELSS funds allow investors to switch between different schemes or options within the same fund without incurring any tax liability.

Factors to Consider Before Investing in ELSS:

The following are some factors to consider before investing in ELSS funds:

Investment Horizon:

ELSS funds are equity mutual funds and are, therefore, subject to market volatility. It is important to have a long-term investment horizon of at least three to five years to mitigate the risk of short-term market fluctuations.

Risk Profile:

ELSS funds invest primarily in equities and are subject to market risk. It is important to assess your risk tolerance and invest accordingly.

Fund Performance:

It is important to evaluate the performance of the ELSS fund before investing. Look for a fund that has a consistent track record of generating returns over the long term.

Fund Manager:

The performance of an ELSS fund largely depends on the fund manager’s skill and experience. It is important to evaluate the track record and experience of the fund manager before investing.

Expense Ratio:

The expense ratio of an ELSS fund is the fee charged by the fund manager for managing the fund. Look for an ELSS fund with a low expense ratio to maximise your returns.

Exit Load:

ELSS funds have a lock-in period of three years. However, some funds may charge an exit load if the units are sold before the completion of the lock-in period. It is important to check the exit load before investing.

SIP vs Lump Sum: Which is the Best ELSS Investment Method?

Investment Method

Characteristics

Best suited for

SIP

  • Invests a fixed amount at regular intervals, usually monthly.
  • Benefits from the power of compounding by investing regularly over a long-term horizon.
  • Helps to mitigate the risk of market volatility as the investment is spread out over a period of time.

Investors with a long-term investment horizon who want to benefit from the power of compounding and mitigate market volatility.

Lump Sum

  • Involves investing a large amount of money at once.
  • Allows investors to take advantage of potential market opportunities and generate higher returns in a shorter period.
  • Subject to market risk and volatility.

Investors with a higher risk tolerance who want to take advantage of potential market opportunities.

Choosing an ELSS Plan or Fund:

Choosing an ELSS plan or fund involves considering several factors, including:

Fund Performance:

Look for ELSS funds with a consistent track record of high returns over the long term, preferably beating their benchmark index.

Fund Manager:

Check the credentials and experience of the fund manager and evaluate their investment strategy.

Expense Ratio:

Look for ELSS funds with a lower expense ratio, which can significantly impact the overall returns.

Fund Size:

Consider the fund size, as larger funds may have greater stability and liquidity, while smaller funds may be more agile and have the potential for higher returns.

Lock-In Period:

ELSS funds have a mandatory lock-in period of three years, so choose a fund with a lock-in period that aligns with your investment horizon and financial goals.

Diversification:

Consider ELSS funds that invest across different sectors and companies, as this can help mitigate risk and volatility.

ELSS vs Other Tax-Saving Instruments: A Comparison:

Tax-Saving Instrument

Lock-in Period

Returns

Risk

Tax Benefit

ELSS

3 years

High

High

Up to Rs. 1.5 lakh deduction under Section 80C

PPF

15 years

Low

Low

Up to Rs. 1.5 lakh deduction under Section 80C

NSC

5 years

Low

Low

Up to Rs. 1.5 lakh deduction under Section 80C

FD

5 years

Low

Low

Up to Rs. 1.5 lakh deduction under Section 80C

NPS

Till Retirement

Moderate to High

High

Up to Rs. 2 lakh deduction under Section 80CCD

Conclusion:

Obtaining an ELSS statement for a tax return is a simple process that can be completed online through various platforms.

By keeping track of your investments and obtaining the necessary documentation, you can maximise your tax savings and enjoy the potential for higher returns offered by ELSS funds.

Don’t let the fear of tax season stress you out – with a little planning and organisation, you can easily file your taxes and take advantage of the benefits of investing in ELSS mutual funds.

FAQs

  • How can I get an ELSS statement for my tax return?

    You can get an ELSS statement for a tax return from the mutual fund house where you have invested in the ELSS scheme.

    You can request the statement online or by visiting the mutual fund office. Some mutual fund houses also send the statement to the investors via email or post.

  • Why is it important to get an ELSS statement for tax returns?

    It is important to get an ELSS statement for tax returns as it provides details of the investments made in ELSS schemes during the financial year.

    This statement can be used to claim tax deductions under Section 80C while filing income tax returns.

  • What is ELSS?

    ELSS stands for Equity-Linked Saving Scheme. It is a type of mutual fund that invests primarily in equities and is eligible for tax deductions under Section 80C of the Income Tax Act.

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