e-Filing of Income Tax Return (ITR)

What is Filing of Income Tax Return?

The filing of income tax return is a legal obligation of every individual whose total income during the previous year exceeds the maximum amount which is not chargeable (for more details for limit of each financial year refer Income Tax Rate / Slab) to income tax under the provisions of Income Tax Act, 1961. The return should be furnished in the prescribed form on or before the due date(s).

Usually Due date will be 31 July of assessment year for previous financial year. Individual can also file Income Tax Returns for previous assessment years as well.

How to e-File Income Tax Return (ITR)?

Income Tax Department has introduced a convenient way to e-file ITR online using the Internet with following steps (its totally free - no agent involved - Individual can do it easily):

• One time registration with valid PAN.
• Get the Excel Utility based on applicable ITR.
• Fill Excel with details using Form 16, Validate and Generate the XML.
• Upload the XML, Get ITR-V (Receipt), Sign and send it to IT Dept.

Each steps explained in detailed description with screen shots.

One time registration required with valid PAN:

For detailed steps of registration refer Onetime Registration with Income Tax India EFiling Site.

Get the Excel Utility based on applicable ITR :

• Once you registered with Income Tax India E Filing site, Open IncomeTax India E-Filing site and click on Login Here button. Login using your PAN, password and date of birth. After login site will be displayed as below:
  
  

• Click on Download ITR link under Quick Link options. It will display ITR form Name, its description and link of Excel Utility as below:
  
  
  
• By default it will show the current assessment year. If you want to file Income Tax Return for another Assessment Year then select appropriate assessment year from dropdown displayed in above screen (You can e-file ITR for previous 6 assessment years).
  
  Note: Financial Year and Assessment Year are different terminology, so don't confuse with that. For financial year 2012-13 assessment year will be 2013-14 and so on.
  
• Click on appropriate link (Excel icon). It will download ITRX_YYYY.zip file. Where X - Form No like ITR1, ITR2 etc.
  YYYY - Assessment year like for 2013-14 it will be 2013.
  
• If your source of income is one of salary, pension, interest income or Family pension then you need to file ITR - 1. Most of the individual needs ITR1.

Fill the Excel, Validate and Generate the XML:

Prerequisite to Fill the ITR-1 Excel:

• FORM - 16 received from employer & other deductors. For more details refer Understand FORM - 16
• Bank details
• Interest statements by bank FDs / NSC if any.

Extract the zip file (downloaded from Income Tax India E-Filing site) in one folder and Open the excel file. This excel contains macro so enable the macro in excel before editing the excel, for more details on how to enable macro in excel refer Enable Macro in Excel: 

Fields marked with light green background color needs to be filled by Individual, all other fields are calculated automatically by excel. For detailed information about excel refer ITR1 Excel's Detailed Description on same page. Excel has following sheets:

   Income Details: Contains personal details (like Name, PAN, Address etc) and income details (which can be filled from FORM - 16). It has three important options (Validate, Calculate Tax and XML Generate).
Fill Personal details, Income details from FORM - 16 and Validate the sheet.

   TDS: Contains Tax Deducted at Source by employer (which can be again filled from FORM - 16), from other deductors (in case of income other than salary) and Advance / Self Assessment tax payments.

   Tax paid and Verification: Contains Tax payable, paid, refundable details. Also contains individual's bank details (in case to get refund from Income Tax Department) and declaration.

   80G: Contains contribution of Individual towards section 80G. For more details about Section 80 G refer Section 80G.

Process to fill Excel, Validate & Generate XML:

1. Fill Personal Information, Filing Status, Income & Deduction in Income Details sheet and click on Validate button.
2. Fill Tax Deducted at Source (TDS) details from FORM - 16 (in case of Salary and income other than Salary) in TDS sheet. Also fill the details of Advance Tax / Self Assessment Tax (if any) and click on Validate option.
3. Fill third (Tax Paid and Verification) sheet and click on Validate option.
4. Select the first (Income Details) sheet and click on Calculate Tax option.
5. Check third  (Tax paid & Verification) sheet - 18 Tax Payable (15-17), if it contains non zero value that means individual needs to pay that much tax to Income Tax Department.
6. Pay this amount using NSDL site and mention details of tax payment information in TDS sheet under Advance Tax & Self Assessment Tax Payments section.
7. If Tax Payable (15-17) in third (Tax paid & Verification) sheet is zero then click on  XML Generate option in first (Income Details) sheet. It will create one sheet (Pre-XML Check) with Save XML button on it.
8. Click on Save XML in Pre-XML Check sheet, it will save on the same path where Excel is located.

Upload the XML, Get ITR-V (Receipt), Sign and send it to IT Dept:

• Login on Income Tax India E Filing site using PAN, password and Date of birth.


• Click on Upload Return link under Quick Link. It will display below page:
  
  
  Enter PANSelect ITR Form Name: ITR-1
  Assessment Year: Select the AY for which you want to e-File.
  Attach the ITR XML file.Do you want to Digitally sign? No
  Click on Submit button.




• After Submit it will give link of ZIP file (which contains ITR-V). Download this zip file and open PDF from zip file (IT department will also email the same zip file on your email id which is mentioned in your profile).
  
  PDF file is ITR-V Form. ITR-V FORM is password protected.Password will be your PAN and date of birth in ddmmyyyy format.
  For example: PAN is ABCDE1234A and date of birth is 01-01-1987 then password will be abcde1234a01011987.
  


• Open the ITR-V FORM and verify it against excel / FORM - 16. It will look like below (AY will be changed according to your e-file):





• Print this ITR-V FORM and sign in VERIFICATION section.
   
  
• Post / mail signed ITR-V FORM through Ordinary or Speed Post to the Income Tax Department on mentioned address within 120 days. Address will be as below:
  Income Tax Department - CPC,
  Post Bag No - 1,
  Electronic City Post Office,
  Bengaluru - 560100,
  Karnataka.

ITR1 Excel's Detailed description

Income Details:

This sheet has mainly four sections as below: After filling all sections in this sheet click on Validate option. Please verify the assessment year in excel. It should be same as for which you are e-filing ITR.

• Personal Information: Contains various details like
  Name - First Name, Middle Name, Last Name.
  PAN.
  Address (Gender (Male / Female)
  Contact details (Email Address, Mobile No, Phone No.Status (I - Individual)Employer Category (Other / NA / GOV / PSU) - If Individual is not working then select NA.
• FILING STATUS: Contains details
  Income Tax Ward / Circle - Area / City where individual resides. No need to fill this, While validating / XML Generate will populate this field automatically.
  Return Filed Under Section: 11 - Before Due Date (Due date is 31st July of assessment year).
  12 - After Due Date
  13 - In response to notice (u/s) under section 142(1).
  14 - In response to notice under section 148.
  15 - In response to notice under section 153A.
  16 - In response to notice under section 153C.
  17 - Revised return 139(5) - After filing return, if individual feels something is missing then this section is used.
  18 - In response to notice under section 139(9) for removal of defects.
  Original / Revised Return - Original - for first time. Revised in case of section 139(5) / 139(9).
  In case of Revised Return provide Original Acknowledgement no & Date.
  In case of u/s 139(9) Provide Original Acknowledgement No, Notice No and Notice date received from Income Tax Department.
  Residential Status - Resident / Non-Resident / Resident but normally not resident.
  Tax Status: Nil Tax Balance / Tax Payable / Tax Refundable.

• Income & Deductions: contains details same as FORM - 16 (these section filled using FORM - 16) as below:
  1 Income from Salary / Pension (Ensure to fill Sch TDS1): Amount against INCOME CHARGEABLE UNDER THE HEAD "SALARIES" from FORM - 16 will come over here.
  2 Income from one House Property: Amount against Income under the head Income from house property from FORM - 16 will come in this cell. If this amount is negative then put it as negative amount.
  3 Income from Other Sources (Ensure to fill Sch TDS2): Sum of figure against Income under the head Income from Capital Gains & Income under the head Income from other sources will come in this section.
  4 Gross Total Income (1 + 2 + 3): This is sum of above three kinds of income.
  5 Deductions under Chapter VI A (Section): Fill the various sections (liek 80C, 80D, 80CCF, 80DD, 80DDB, 80E etc - except 80G) under this head from FORM - 16.
  6 Deductions (Total of 5a to 5m): Sum of all deductions up to its limit. Automatically Excel will calculate.
  7 Total Income (4 - 6): Gross Total Income - Total Deductions.
  8 Tax Payable on Total Income: Clicking on Calculate Tax option will calculate Tax Payable based on income rate/ slab. Individual do not worry about this.
  9 Education Cess, including Secondary and higher secondary cess on Tax Payable (8):  Clicking on Calculate Tax option will calculate based on Tax Payable.
  10 Total Tax, Surcharge and Education Cess (Payable) (8 + 9): Summation of Tax Payable, Education Cess, Secondary and higher secondary cess.
  11 Relief under section 89: If individual gets relief under section 89 then enter amount.
  12 Relief under section 90/91:  If individual gets relief under section 89 then enter amount.
  13 Balance Tax Payable (10 - 11 - 12): Total tax - relief under sections 89, 90/91. Calculate Tax option will calculate it.
  14 Total Interest u/s 234A 234B 234C: Calculate Tax option will calcuate interest if Tax payable is more than paid tax. For this Fill the TDS sheet.
  15 Total Tax and Interest Payable (13 + 14): Summation of Balance Tax Payable and Interest. It will be calculated automatically after click on Calculate Tax option.

TDS:

This sheet has mainly three sections as below: After filling all sections in this sheet click on Validate option.

• 23 Details of Tax Deducted at Source from SALARY [As per FORM 16 issued by Employer(s)]: Individual can fill this details from FORM - 16. Add details for each employer (if you have FORM - 16 from more than one employer). Provide TAN, Name of Employer, Income Chargeable under head salaries & Total Tax Deducted.


• 24 Details of Tax Deducted at Source on Income OTHER THAN SALARY [As per FORM 16 A issued by Deductor(s)]: For source of income other than salary and if tax deducted from that income then provide same details (TAN, Name of deductor, Unique TDS certificate No, Deducted Year, Total Tax deducted, Amount claimed this year) under this section.
• 25 Details of Advance Tax and Self Assessment Tax Payments: If individual paid any advance tax or self assessment tax then provide details over here. Like for example, employer deducted less tax and if employee want to pay actual tax then employee can pay the tax (in case of advance / self assessment tax).
  While filling Income Tax Return, if individual finds he needs to pay more tax than actual paid then he can pay tax (along with interest calculated in 14 Total Interest u/s 234A, 234B, 234C mentioned in Income Details sheet) through NSDL site and provide details in this section and file the income tax return.
  
  Calculation of pending tax (if any) = 15 Total Tax and Interest Payable [from Income Details sheet] - ( sum of Total Tax Deducted [from TDS sheet] + sum of Amount out of claimed this year [from TDS sheet] ). Individual needs to pay same amount as Self Assessment Tax.

Tax Paid and Verification:

This sheet has mainly three sections as below: After filling all sections in this sheet click on Validate option.

• Taxes Paid:
  16 Taxes Paid: These fields are calculated automatically once click on Calculate Tax on Income Details sheet. Contains summary of taxes paid through various ways:16a Advance Tax (from item 25): It contains summation of advance tax entered in previous sheet (TDS) under Details Advance Tax and Self Assessment Tax Payments. This excel will identify whether its advance tax or Self Assessment.16b TDS (Total from item 23 + item 24): Contains total tax deducted as source (TDS) from previous sheet. Its sum of TDS on Salary and TDS on Income other than Salary.16c Self Assessment Tax (item 25): Contains Tax paid by individual as Self Assessment during assessment year (not during financial year). This amount is inclusive of interest (which is calculated u/s 234A, 234B and 234C).
  
  17 Total Taxes Paid (16a+16b+16c): Sum of Advance Tax, TDS and Self Assessment Tax.
  
  18 Tax Payable (15-17) (if 15 is greater than 17): This explains whether individual needs to pay more taxes or not. 15 Total Tax and Interest Payable [from Income Details sheet] - 17 Total Taxes Paid [from this sheet].
  If this amount is greater than zero then individual needs to pay this amount to Income Tax of department as part of Income Tax.
  If this amount is zero then exact income tax is paid by individual, there is nothing due.
• Refund: 
  19 Refund (17-15) if 17 is greater than 15: This explains individual will get refund from Income Tax Department.   17 Total Taxes Paid [from this sheet] - 15 Total Tax and Interest Payable [from Income Details sheet].
  To get refund from Income Tax Department individual needs to provide below details
  20 Enter your Bank Account number: Provide bank account number which is single account on your name only.
  21 Direct Deposit or Cheque: (Select Yes  if you want your refund by direct  deposit into your bank account, Select No if you want refund by Cheque)
  22 In case of direct deposit to your bank account give additional detailsMICR Code: MICR code of bank branch, It will help Income Tax Department to deposit refund amount online.
  Type of Account: Savings / Current.
• 26 Exempt Income for reporting purpose only: Contains any income (agriculture income greater than 5000). Its used only for reporting purpose. There will be no income tax on it.
• Verification: Provide Name, Father Name, Date, Place and PAN number for verification purpose.

Pre-XML Check:

After validating all sheets, Click on  Calculate Tax option on first (Income Details) sheet. Verify Tax Payable / Refundable. If everything is ok then click on XML Generate option in first sheet. It will create this sheet. Save XML option will be there on new sheet as below:

Click on Save XML option, it will save xml file on same path where ITR1 excel is located.

Onetime Registrarion On IncomeTaxIndiaEFiling

Onetime registration with valid PAN:

• If you didn't register with Income Tax E Filing site previously then open Income Tax India E Filing site and click on Register Yourself link. Its simple 3 steps process.
• It will open Registration Form: Select User Type options as below:
  .
  
  Select Individual and click on Continue button.


• Step 1 - Basic Details: Fill up basic details like PAN, Surname, First name, Middle name, Date of birth (these details should be same which was provided by you while creating PAN). While registration you need to provide Email ID and Mobile Number which will be used for further communication.
  
  
  After filling these details click on Continue button.


• Step 2 - Registration Form: It will ask few more details like password, security questions & answers (to recover password), personal, contact numbers, address etc as displayed in below screen:
  


• Step 3 - Registration Successful: Income Tax department will send activation link on your email ID and confirmation message on your mobile number provided in previous form. It will display following confirmation:
  
  
  You will get email from Income Tax department with activation link. After clicking on that link your account will be activated and you can login on site and file Income Tax Return.

What Kids (11 to 13 Years) should know About Money

In continuation to previous posts What Kids (3 to 5 Years) should Know About Money & What Kids (6 to 10 Years) should Know About Money now move further ahead for kids whose age between 11 to 13 years. 

Kids (between 11 to 13 years old):

1. You should SAVE AT LEAST a RUPEE for every 20 - 50 Rs. 

Following activities are needful to reach this goal: 

• Encourage your child to always save 7-10% of the money he gets.
   
• Have your child set a goal to buy something he wants, and have him work toward that amount.
   
• To reinforce the savings habit, go to the bank two to three times a year with your child to deposit savings into his account, and look at how much bigger the balance is on each visit.
   
• Consider a "matching plan" for your child's savings: You put in 20 Rs. for every 100 Rs. he saves.
  When you are out for shopping, point out essentials such as food and clothing, and ask your child to describe items that she may want but are optional.

2. Entering PERSONAL FINANCIAL INFORMATION, like a bank or credit card number, online is risky because SOMEONE COULD STEAL IT.

Now a days most of the kids have access to internet, so little precautions are needed on this side as well. Following activities are useful:

• Discuss the dangers of entering personal information online.
   
• Explain that thieves can use Social Security numbers or other personal information to open credit cards or create fake documents.
   
• Explain that "free" offers online, such as cell phone ringtones or games, are scams to get people to spend money without realizing it.
   
• Make it a rule that your child never answers emails from someone he doesn't know and never clicks on pop-up ads.  

3. The sooner you save, the FASTER YOUR MONEY CAN GROW from COMPOUND INTEREST.

Following activities are beneficial:

• Compound interest is when you earn interest on both the money you save and the interest you earn.
   
• Show your child the following: If he sets aside Rs. 1000 every year starting at age 21, she/he'd have about Rs. 1,58,626.00 at age 55. However, if he begins saving at age 30 he'd have about Rs. 73,105.00 at age 55. Assume the account earns 8% every year.
• To compute compound interest, use the calculators at TheCalculatorSite.
   
• Discuss how much your child can save. What will he have to give up? Is it worth it? 

4. Using a CREDIT CARD IS LIKE TAKING OUT A LOAN; if you don't pay your bill in full every month, you'll be charged interest and owe more than you originally spent.

Following activities are useful:

• Discuss why you should not use a credit card (Loan) to buy something that you can't afford to pay for with cash.
   
• Look at credit card offers online with your child, and compare the interest rates.
   
• Using the Credit Card Repayment Calculator at RupeeTimes, see how long it could take to repay a Rs 5,000 credit card debt by making the minimum monthly payments.
   
• Discuss how a credit card can be useful for making purchases online, or as a convenience.

What Kids (6 to 10 Years) Should Know About Money

In continuation to previous post What Kids (3 to 5 Years) should Know About Money, now move further ahead for kids whose age between 6 to 10 years. 

Kids (between 6 to 10 years old):

1. There's a difference between THINGS YOU WANT and THINGS YOU NEED.

Following activities are needful to realize: 

• When you are out for shopping, point out essentials such as food and clothing, and ask your child to describe items that she may want but are optional.
   
• Talk about how your family decides what to buy and what to pass up. Which is more important, buying cookies or fresh fruit? Soda or milk?
   
• Draw a circle and divide it into sections for food, rent or house payments, clothes, and "optional items," to show that there is a finite amount of money to spend.

2. You need to MAKE CHOICES about HOW TO SPEND YOUR MONEY.

Following activities are beneficial:

• Include your child in some of your small decisions. For example, at the grocery store, explain why you pick one item over another.
   
• Give your child 10-30 Rupees and let her / him choose which fruit to buy.
   
• When shopping with your child, ask yourself aloud: Do I need this item? Can I borrow it? Would it cost less somewhere else?

3. It's good to shop around and COMPARE PRICES BEFORE YOU BUY. 

Following activities are useful:

• With your child, compare prices for a particular toy at various stores.
   
• Ask for discount / negotiate for price and show your child how much you are saving. There is not shame on asking for discount / negotiate.
• Consider allowing her to keep part of the savings, if she / he helps ask about discount.

4. It can be COSTLY and DANGEROUS to SHARE INFORMATION online.

Now a days most of the kids have access to internet, so little precautions are needed on this side as well. Following activities are useful:

• Know the websites your child visits.    
   
• Decide which websites are appropriate, and block any inappropriate sites using parental control software.
   
• Make it a rule that your child never gives out any personal information—like her birth date, address, phone number or school—when on the internet.
   
• Don't allow her/ him to buy anything online without your permission.

5. Putting your money in a SAVINGS ACCOUNT will PROTECT it and pay you INTEREST.

• Visit a nearby Government Bank, Government Undertaking Bank or Post Office with your child. You can use some story on RBI site to explain importance of Savings account in individual's life.
   
• Ask about the interest rate on a Savings Account. Illustrate her / him the power of interest / compounded interest.
   
• Discuss with your child how money in savings accounts is protected by Government driven body insurance. If the bank goes out of business, she will get her money back.
  
• Open a savings account for your child.

What Kids (3 to 5 Years) Should Know About Money

There are few things that your kid should know about money / finance to live financially smart. Kids should have some knowledge depending on their age groups. Its not like financial terms, economic lessons etc.

Kids (between 3 to 5 years old):

1. YOU NEED MONEY to BUY things

Following activities are useful: 

• Identify coins and their value. Comparison between coins and currency notes. There are some games on RBI site


• Discuss how you may value something that is free, such as playing with a friend, listening story from mother, father or grandparents.


• Identify items that cost money, such as ice cream, fuel for the car, or clothes, Movie, Lunch / dinner at restaurant.

2. You EARN MONEY by WORKING

Following activities are beneficial:

• Describe your job to your child. What work are you doing? Your timings of job / service.


• Walk through your neighborhood or town and point out people working, like the bus driver or the police officer.


• Explain that some people start their own businesses like clothing stores, grocery shops or restaurants, and those people are called entrepreneurs, businessman / businesswoman.


• Encourage your child to think about how he/she could earn money by setting up a lemonade or cookie stand for example buy things from whole seller and sell them to end customers.

3. You may have to WAIT BEFORE YOU CAN BUY something you want.

Following activities are 

• When your child is standing in line / queue for a turn on the burger / pizza, or looking forward to her favorite movie ticket, point out that sometimes we have to wait for things we want.


• Find three jars (or cans) and label one for saving, one for spending, and one for sharing.


• Suggest your child to put some of the money she / he gets (as a gift from someone) into the saving jar, so she / he can buy a favorite toy or treat when she / he has saved enough.

PPF - Public Provident Fund

Public Provident Fund (PPF) is a financial instrument provided by Nationalized banks / Post Office, which provides investors with a higher rate of interest than a regular savings account, until the given maturity date (basically tenure is 15 years, investor can extend 5 years after maturity for one time). 

Customer can open PPF account in Nationalized Bank / India Post Office and gets Passbook. Customer can open PPF account on minor's (their children's name) name as well.

There are some constraints on minimum and maximum deposit amount in PPF account per financial year as below:
Minimum Deposit: Rs. 500/- per annum is required to be deposited.
The accounts in which deposits are not made for any reason are treated as discontinued accounts and such accounts cannot be closed before maturity.
The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/- for each defaulted year.

Maximum Deposit: Rs. 1,00,000/- per annum w.e.f. 1st December 2011. (Rs. 70,000/- per annum upto 30.11.2011.)
The depositor has flexibility and freedom for depositing any amount in a maximum of 12 installments in a financial year.

Period: Tenure of PPF accounts is 15 years. Customer can extend it for period of 5 years after expiration of 15 years for one time only. So in summary, maximum period is 20 years and minimum 15 years.

Interest Rate: PPF returns depends on Interest Rate; it’s also varying from time to time and decided by Government Of India (GOI). Interest rate of PPF is directly controlled by GOI which is good part. Every banks and Post Office has to agree and change their interest rate as per direction given by GOI. 
Current Interest Rate is 8.8% (effective from 01-Apr-2012).
Interest is calculated on lowest balance in the PPF account between the close of 5th day and end of month. Calculated interest credited to PPF account at the end of the year. Interest is Compounded annually.

Safety: PPF account is the safest investment under Income tax Act Section 80C. It has no upper limit.
 
Liquidity: Money deposited in PPF account is partially liquidated as below condition:
Partial withdrawals once every year from PPF account after expiry of five years, from the end of Financial Year, in which the initial deposit was made.
The amount of withdrawal is restricted to 50% of the credit balance at the end of the fourth year immediately preceding the year of withdrawal or the year immediately preceding the year of withdrawal, whichever is lower.
In case of PPF account extended beyond Maturity period partial withdrawals are allowed once in a year with the condition that the amount of withdrawal during a five year block period should not exceed 60% of the balance in the account at the commencement of the block period. 

For example- In Sep-1998, account holder deposited 20,000/- so he/she can withdraw 20,000/- after Apr-2004 for once in whole financial year - if PPF account has balance of more than 40,000/-.

In case, the withdrawal is sought from minor's Account, the guardian has to make a declaration that the money is required for the use/benefit of the minor.

Apart from partial withdrawals, Loan facility is also available on PPF account which is as below:

Loan Facility: A PPF account holder can avail of loan facility in the third financial year from the financial year in which the account was opened.
In case, the loan is sought from minor's Account, the guardian has to make a declaration that the money is required for the use/benefit of the minor.

The loan can be taken up to 25% of the amount in the account at the end of the second year immediately preceding the year in which the loan is applied for.
The loan is repayable in lump sum or convenient installments. Where loan is repaid within 36 months, interest is charged at 2% (w.e.f. 1st December 2011) and if it is not repaid within 36 months, the interest at the rate of 6% is charged on the outstanding balance. The interest is to be paid in not more than two installments after the loan amount is fully repaid.
Once the first loan is repaid, second loan can be obtained on same terms. This facility is available till the end of 5th financial year from the end of the financial year in which initial subscription was made. 

Tax exemption: Money invested in PPF account is exempted from Income Tax under Income Tax Act Section 80C up to 1 Lac.
Entire deposit in a PPF account is exempt from the Wealth Tax.

Tax on Return (Interest): Interest earned by PPF account is tax-free. Entire deposit & interest earned in PPF account is exempt from Wealth Tax

Below are the few list of categorized banks: Click on the bank to find procedure to open PPF account.

Nationalized Banks

• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• IDBI Bank
• Indian Bank
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab and Sind Bank
• Punjab National Bank
• State Bank of Hyderabad
• State Bank of India (SBI)
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Travancore
• Syndicate Bank
• Union Bank of India
• United Bank of India
• Vijaya Bank

Private Sector Banks

• Axis Bank
• Catholic Syrian Bank
• City Union Bank (CUB)
• Development Credit Bank
• Dhanalakshmi Bank
• Federal Bank
• HDFC Bank
• ICICI Bank
• Indus Ind Bank
• ING Vysya Bank
• J&K Bank
• Karnataka Bank
• Karur Vysya Bank
• Kotak Bank
• Lakshmi Vilas Bank
• Nainital Bank
• South Indian Bank
• Tamilnad Mercantile Bank
• Yes Bank

Equity Linked Saving Scheme - Mutual Fund

Equity Linked Saving Scheme - Mutual Fund (ELSS) is a financial instrument provided by Mutual Fund companies which invest in equity and equity related products whose returns based on performance of equity market (in simple terms stock market). ELSS is suitable for investors having a high risk profile as returns in ELSS fluctuate depending upon the equity market and there are no fixed returns as other products like Fixed Deposit(FD), PPF account etc. ELSS has locking period of 3 years. Investor can not exist from these funds before 3 years.

Customer can buy ELSS mutual fund through agent or online (if they have demat account and trading account). Mutual fund company declares NAV (Net Asset Value) for each fund on daily working days to stock exchanges. Net Asset Value is the market value of the assets of the scheme minus its liabilities (which includes salary expense, operation and other expenses) of the mutual fund scheme. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date. NAV will vary based on performance of their portfolio (purchased by fund managers). Mutual fund companies has their Fund Managers who has knowledge of equity and other products; they have very good analysis & research tools. Investors can find NAV for various funds on AMFI site, select category as ELSS.
Based on NAV, customer will get number of units (for ex. if customer wants to invest 10000/- in X ELSS scheme and NAV for that fund is 10.34/- then customer will get 10000/10.34 = 967.118 units of that fund).

There are three kind of investment options for mutual fund as below:
Growth option: In growth option income earned by the fund is not distributed to unit holders, Investor do not earn any dividend during the time it holds the fund. Any income/profit earned by the fund increases the NAV of the fund and vice versa. Whenever the investor sells its holdings he will realize long term capital gain/loss.
Dividend option: In this option the fund distributes income earned by the fund to the investors as dividends. The date of distribution is declared by the fund, however if the fund has negative income it will not distribute any dividend. Any dividend received by the investor is not liable for tax in the hands of investors.
Dividend reinvestment option: If the investors choose this option the dividends declared by the fund are reinvested. For example an investor is holding 10000 units of a fund and the fund declares dividend @ 1.5 per unit, the total dividend of 15000 (10000*1.5) will be reinvested on behalf of the investor as a fresh purchase. The investor can claim deductions to the tune of dividend received which is Rs 15000 in this case.

Period: There are 3 years of locking period for ELSS mutual fund, before 3 years investor can not sell their units. After that tenure its upto customer / investor.

Return Rate: ELSS returns depends on performance of the fund which is purely based on equity market. There are so many mutual fund companies in India so investor can study / view the past performance of these companies and based on that they can invest, but again past performance will not guaranty in future. Nobody can predict, sometimes it gives very good returns sometimes it gives negative / average return.

Safety: ELSS mutual funds invest in equity market, so again it is not safe as per equity market guidelines. Its not insured by any government body or some organization. 

Liquidity: Money invested in ELSS is liquidated easily by filling the redemption form and submit it to agent / mutual fund office. If investor bought it online then they can redeem it only, it takes few seconds and clicks. Investor will get money directly in their account / cheque from mutual fund company.

Tax exemption: Money invested in ELSS is exempted from Income Tax under Income Tax Act Section 80C up to 1 Lac. Individual can take this tax exemption for only one year in which money invested not for all 3 years.  In case of Dividend reinvestment option investor can take benefit in consecutive years if any dividend reinvested automatically.

Tax on Return (Dividend / Long term Capital Gain): Dividend or long term capital gain earned by ELSS units is taxfree. Dividend

On AMFI site, Investor can find list of mutual fund companies which are operated in India: Registered Mutual Fund Companies in India

Below are few funds:
SBI Tax Advantage Fund - Series I 
SBI Tax Advantage Fund - Series II 
SBI Magnum Taxgain Scheme 1993 
Principal Tax Saver / Savings Fund
Reliance Tax Saver (ELSS) Fund
Reliance Equity Linked Saving Fund Series 1 
HDFC Tax Saver 
Birla Sun Life Tax Relief 96 
Birla Sun Life Tax Plan 
Kotak Tax Saver 
UTI Equity Tax Savings Plan 
IDFC Tax Advantage (ELSS) Fund 
Sundaram Tax Saver 
L&T Tax Advantage Fund 
L&T Tax Saver Fund 
Canara Robeco Equity Tax Saver 
ICICI Prudential Tax Plan
BOI AXA Tax Advantage Fund 
Baroda Pioneer ELSS 96 
TATA Tax Saving Fund 
Franklin India Taxshield  

Investor can find the performance of ELSS by various mutual fund companies on financial portals / sites as below:
ELSS on Moneycontrol 
ELSS on Economic Times  
ELSS on Rediff Money