Reasons of Investors' Preferences for ELSS (Equity Linked Saving Schemes) for Taxation Planning: A Quantitative Investigation

Abstract

The tax-saving season starts on April 1st for both salaried individuals as well as businessmen. It's crucial for investors to seek out tax-saving opportunities that not only provide exemptions but also generate tax-free income. With numerous of investment options available, selecting the right one can be difficult. Unfortunately, many investors tend to delay on tax planning. However, tax-saving is a genuine means to reduce tax liabilities, and all taxpayers should consider it to build their wealth. However, ELSS investments involve higher risks due to their equity exposure, making them suitable for investors with a high-risk tolerance. Tax-saving investments serve as an excellent way to diversify tax burdens and enhance wealth. Despite the abundance of options in the market, choosing the most suitable investment remains a challenge. A sample of 239 respondents was collected from different investors with different income level. The factors that identify the Reasons of Investors' Preferences for ELSS (Equity Linked Saving Schemes) for Taxation Planning are Tax Benefits, Lock-in Period, Potential for Capital Appreciation, and Systematic Investment Plans.