logo
Is ELSS losing its appeal in the new tax regime?

Is ELSS losing its appeal in the new tax regime?

Economic Times18-07-2025
Getty Images
The equity scheme assets grew by nearly 22% from ₹26.82 lakh crore to ₹32.69 lakh crore in this period.
Mumbai: Is it the beginning of a slow death for equity-linked savings scheme (ELSS), the once-popular tax-saving offering by mutual funds? With several investors shifting to the new tax regime, the demand for this equity scheme category is dwindling as fresh money is drying up, while old-timers are pulling money out after the three-year mandatory lock-in.
ELSS has seen net outflows of ₹1,616 crore in the first quarter FY26. Over the last 12 months, the ELSS category has seen net inflows of ₹535 crore, compared to flows into the flexicap category worth ₹56,309 crore. "Many taxpayers have switched or are switching to the new tax regime, which is now very much attractive," says Gautam Nayak, partner, CNK and Associates. "Since there are no tax benefits available under Section 80C, these investors would not want to invest in ELSS schemes and lock in their investments for 3 years."
ELSS was a popular category for individuals as it had the lowest lock-in period compared to comparable tax-saving options such as public provident fund (PPF), national savings certificates (NSC) and five-year tax-saving fixed deposits, among others. Moreover, its returns have been superior because it's an equity-oriented product. Investors could park up to ₹1.5 lakh in a financial year and get tax savings under Section 80C of the Income Tax Act in the old tax regime. However, in the new tax regime, this benefit is not available.Over the last year, the ELSS category has seen the slowest growth, with assets under management moving up from ₹2.33 lakh crore to ₹2.49 lakh crore-a rise of 6.9%. The equity scheme assets grew by nearly 22% from ₹26.82 lakh crore to ₹32.69 lakh crore in this period.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

No retrospective change in I-T Bill, only simplification: Baijayant Panda
No retrospective change in I-T Bill, only simplification: Baijayant Panda

Business Standard

time12 minutes ago

  • Business Standard

No retrospective change in I-T Bill, only simplification: Baijayant Panda

The old law had become so complicated that even experts couldn't give the clear answer, says Panda premium Monika Yadav New Delhi Listen to This Article The new Income-Tax Bill does not override the intent of the Income Tax Act, 1961, but simplifies its language and structure, says Lok Sabha Member Baijayant Panda, who chaired the 31-member select committee to review its draft. In an interview with Monika Yadav, Panda says with the rising number of filings, resources need to be scaled up. Edited excerpts: Do you believe the Bill has been simplified enough to significantly reduce tax disputes and litigation? This is the first step towards simplification. The law has become complicated. It is 64 years old and has undergone more than 4,000 amendments, resulting

ITR 2025: What are the five sources of income liable for tax? Details inside
ITR 2025: What are the five sources of income liable for tax? Details inside

Hindustan Times

timean hour ago

  • Hindustan Times

ITR 2025: What are the five sources of income liable for tax? Details inside

For all eligible taxpayers for FY2024-25, it is crucial to note that income tax is not just levied on salaries but on five identified sources of income, also known as five heads of income tax. Aimed towards making tax calculation easier and more structured, taxpayers must carry out this step before calculating your income tax liability.(Reuters File) Section 14 of the Income Tax Act, 1961, states that different sources of income must be grouped for tax purposes. The law divides all types of income into five specific categories. Aimed towards making tax calculation easier and more structured, taxpayers must carry out this step before calculating your income tax liability. It is also crucial to note that the ITR filing deadline for this year stands at July 31. Failing to pertain to the mentioned deadline would result in interest penalties. Five heads of income tax: 1. Income through earned salary: Taxable salary comprises basic salary, all allowances, perquisites, and bonuses, among others, which fall under the taxable bracket. Taxpayers who earning a monthly salary as their sole income should file their income tax return through the ITR-1 form. 2. Rental income from house property: If a citizen owns a property that has been rented out, or sublet, the earned rent is taxable. Taxpayers who are eligible under this income stream can file their ITR through the ITR-1 form. 3. Income through capital gains: Short and long term capital gains and those that accrue on the sale of shares, mutual funds and real estate, are an income tax eligible stream. Taxpayers with capital gains lower than ₹1.25 lakh should use ITR-1 and those with higher gains, can use ITR-2, for filing their income tax returns. 4. Income from business or profession: Self-employed individuals, freelancers, small agency owners and those with business incomes or entrepreneurs, fall under this slab. Taxpayers under this category of income stream should refer to ITR-4, ITR-5 or ITR-6 numbered forms, on the basis of their respective income categories. 5. Income through other sources: Citizens benefitting from interest income from fixed deposits or bonds, share dividends, gifts, rewards from game shows, lucky draws, lottery prizes etc. that exceed ₹50,000, belong under the slab of 'other sources'.

Debt by cash transactions of over Rs 20,000 not legally enforceable: Kerala HC
Debt by cash transactions of over Rs 20,000 not legally enforceable: Kerala HC

Time of India

timean hour ago

  • Time of India

Debt by cash transactions of over Rs 20,000 not legally enforceable: Kerala HC

The Kerala High Court on Friday declared that a debt created by a cash transaction of above Rs 20,000 in violation of the Income Tax Act is not a " legally enforceable debt " unless there is a valid explanation for the same. Justice P V Kunhikrishnan made the declaration while allowing a plea for setting aside the conviction and sentence of a man accused in a cheque dishonor case . Explore courses from Top Institutes in Please select course: Select a Course Category Others Management Technology CXO Data Analytics Product Management Digital Marketing Leadership Artificial Intelligence Data Science healthcare Public Policy Operations Management Cybersecurity MBA Degree MCA others Finance Data Science Project Management PGDM Skills you'll gain: Duration: 28 Weeks MICA CERT-MICA SBMPR Async India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Exec Cert Prog in AI for Biz India Starts on undefined Get Details Skills you'll gain: Duration: 16 Weeks Indian School of Business CERT-ISB Transforming HR with Analytics & AI India Starts on undefined Get Details Skills you'll gain: Duration: 9 months IIM Lucknow SEPO - IIML CHRO India Starts on undefined Get Details The accused was sentenced to one year and imposed with a fine of Rs 9 lakh by a sessions court for the offence of dishonour of cheque due to insufficiency of funds in the account under section 138 of Negotiable Instruments (NI) Act. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Animal Advocate Begs: Never Do This With A Senior Dog ExpertsInPetHealth Learn More Undo In his appeal in the High Court against the sessions court decision, the accused claimed that as the amount of Rs 9 lakh given to him by the complainant was in cash, it was an illegal transaction according to the Income Tax laws. "Therefore, a debt created by an illegal transaction cannot be treated as a legally enforceable debt," the accused had claimed. Live Events Agreeing with the accused's contention, Justice Kunhikrishnan said that if a criminal court "indirectly legalises such illegal transactions in violation of the IT Act" by treating them as a legally enforceable debt, it will be against the aim of the country to discourage cash transactions above Rs 20,000. The High Court said that discouraging cash transactions above Rs 20,000 was also "a part of the 'digital India' dream of our country, which is propounded by our Prime Minister to save our economy and to curb a parallel economy in our country". "If the debt arises through an illegal transaction, that debt cannot be treated as a legally enforceable debt. If the court regularises such transactions, that will encourage illegal transactions by the citizens. Even black money will be converted into white money through the criminal courts," the High Court said. It further said that in such cases the accused should challenge such transactions in evidence and has to rebut the presumption under section 139 of the NI Act that "the holder of a cheque received it for the discharge of a debt or other liability". In the instant case, the accused had rebutted the presumption by claiming that the complainant does not have the source to loan out Rs 9 lakh and therefore, the debt alleged to be due to him cannot be treated as a legally enforceable one, the HC said. It allowed the accused's revision petition and acquitted him by setting aside his conviction and sentence by the lower court. The High Court said if anybody pays an amount in excess of Rs 20,000 to another person by cash in violation of the IT Act and thereafter receives a cheque for that debt, he should take responsibility to get back the amount, unless there is a valid explanation for such cash transactions. "If there is no valid explanation in tune with provisions of the IT Act, the doors of the criminal court will be closed for such illegal transactions," the HC said. It also made it clear that its findings would be prospective in nature.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store