Save on Taxes

Save on Taxes

ELSS stands for Equity Linked Saving Scheme. It is a type of mutual fund that invests a major portion of its corpus into equity or equity-related instruments. ELSS funds are popular for their dual benefit of offering tax deductions and the potential for capital appreciation.

Key features of ELSS
Tax benefits: ELSS investments qualify for tax deduction under Section 80C of the Income Tax Act. This allows you to deduct up to Rs. 1.5 lakh from your taxable income in a financial year.

Equity investment: ELSS funds invest primarily in stocks of companies, which offers the potential for higher returns compared to other tax-saving options like fixed deposits or Public Provident Fund (PPF).

Lock-in period: ELSS comes with a mandatory lock-in period of 3 years. This means you cannot withdraw your investment before the completion of 3 years.

Potential for high returns: Since ELSS invests in equities, it has the potential to offer higher returns compared to other tax-saving options.

Flexibility: You can invest in ELSS through a lump sum or a Systematic Investment Plan (SIP).