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Your Questions Answered: How does SIP investment differ in equity mutual funds vs ELSS mutual funds?

The article from MSN Money discusses the differences between Systematic Investment Plans (SIPs) in equity mutual funds and Equity-Linked Savings Schemes (ELSS) mutual funds. SIPs allow investors to invest a fixed amount regularly into mutual funds, which can be either equity, debt, or hybrid funds, offering flexibility in investment choices. On the other hand, ELSS funds are specifically equity-oriented and come with a mandatory lock-in period of three years, which is not a feature of regular equity mutual funds. ELSS funds also offer tax benefits under Section 80C of the Income Tax Act, allowing deductions up to Rs 1.5 lakh annually, which is a significant advantage not available with other equity funds. The article explains that while both types of investments can be made through SIPs, ELSS funds are designed for tax saving with a focus on long-term capital growth, whereas equity mutual funds through SIPs provide broader investment options without tax benefits but with potentially higher liquidity and flexibility.

Read the Full MSN Article at:
[ https://www.msn.com/en-in/money/other/your-questions-answered-how-does-sip-investment-differ-in-equity-mutual-funds-vs-elss-mutual-funds/ar-AA1yvJmA ]