An open-ended equityscheme with a statutory lock-in of 3 years and tax benefit. The minimum investment in equity and equity related instruments shall be 80 per cent of total assets.2 pointsa) Balanced advantage fundb) Sector fundc) Equity linked saving scheme (ELSS)d) None of the above
Question
An open-ended equityscheme with a statutory lock-in of 3 years and tax benefit. The minimum investment in equity and equity related instruments shall be 80 per cent of total assets.2 pointsa) Balanced advantage fundb) Sector fundc) Equity linked saving scheme (ELSS)d) None of the above
Solution
The answer is c) Equity linked saving scheme (ELSS).
ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act, and it comes with a mandatory lock-in period of 3 years. The fund invests at least 80% of its total assets in equity and equity related instruments.
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