One may get tax relief on the investment under Section 80C.But after the 3 year Lock-in period when the units are offered for repurchase(redemption) Income Tax is deducted at source at 20% from the redemption proceeds and the investor receives only the net balance.So all that is achieved is that the Tax payable on the invested amount is deferred for 3 years.This does not happen in the case of the Tax Relief Under Section 80C for investments in PPF or LIC or Infrastructure bonds or NSC or Post Office recurring deposits.So What's the RELIEF that one gets in the case of ELSS????? It is only a tax Deferral.HENCE IT MAKES NO SENSE IN INVESTING IN ELSS fo 80C benefit.CORRECT me if I am Wrong.
RE:ELSS and I.T.deduction at source on redemption proceeds.
by Guest on Aug 17, 2008 03:26 PM Permalink
no tax is deducted u only pay stt all long are long term gains as it has a lock in period of 3 years.long tewrm mf gaing on which stt is paid is exempt from tax.please note
