Equity Linked Savings Scheme (ELSS)

Ride the Equity Wave and Save Tax – ELSS, the Smart Choice!

EQUTY LINKED SAVINGS SCHEME (ELSS)

Equity Linked Savings Scheme (ELSS) is a type of mutual fund in India that offers tax benefits under Section 80C of the Income Tax Act, 1961. It primarily invests in equity and equity-related instruments, making it a market-linked product with the potential for higher returns over the long term.

Benefits of Mutual Funds

Tax Savings

You can claim a deduction of up to ₹1.5 lakh, which can save up to ₹46,800 annually (if in the highest tax slab).

Shortest Lock-in:

Only 3 years compared to 5+ years for other instruments like PPF, NSC, and tax-saving FDs

Potential for Higher Returns:

Being equity-oriented, ELSS has the potential to deliver higher returns compared to traditional tax-saving options.

Systematic Investment Plan (SIP) Option:

You can invest monthly, which helps in rupee cost averaging and disciplined investing.

Key Features of ELSS:

Tax Benefits: Investments up to ₹1.5 lakh per financial year are eligible for a tax deduction under Section 80C.
Lock-in Period: Has a mandatory lock-in period of 3 years, the shortest among all tax-saving instruments under Section 80C.
Market-Linked Returns: Returns are not fixed; they depend on the performance of the equity markets.
Diversification: Invests across sectors and market capitalizations to spread risk.