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  • Writer's pictureAnkur Kapur

Tax Saving using SIPs

While Systematic Investment Plans (SIPs) have an array of benefits, one of their main advantages includes the possibility of tax saving, under the Indian Income Tax Laws. In the new year, most people look for tax-saving SIP as it helps to accumulate wealth while also reducing tax outflow.

Tax Saving using SIPs

SIPs are considered a good tax-saving investment especially when one needs to save a part of their income from taxes. With SIP, you can save on your taxes and also get higher returns on your investment.

Under Sec.80(c) of the Income Tax Act, 1961, investing in equity-linked savings schemes through SIP enables one to claim a deduction of Rs 1.5 lakh from the taxable income. SIPs also help to plan monthly cash effectively.

How to save via SIP in ELSS

To uplift more participation and long-term equity investment, the Government of India formed this tax-deductible category of mutual funds. Along with tax saving schemes, these ELSS funds also help in long-term capital appreciation; thereby making this the most preferred option for tax saving as well as investment.

One can take the SIP route to invest in ELSS which can help to benefit from rupee cost averaging on a longer horizon.

Start Tax Planning Early

It is always better to start your investment as early as possible in a financial year rather than waiting till the end of the financial year and doing a lump sum investment.

In this way, you can avoid any last-moment fanatic investment and also accumulate higher capital on your investment. Through the electronic clearing service (ECS) mandate, the SIP amount will be directly deducted from the bank account.


These are a few SIPs tax benefits that you need to know. In Other cases, one can also invest in SIP notwithstanding the market volatility. While choosing a SIP scheme, it’s advised to be clear about financial goals, so that along with your SIP income tax benefit you can achieve your desired returns.


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