ELSS = Save Tax + Wealth Creation

A person can legitimately save his income taxes by investing his money in the popular tax savings options. One of the options is Section 80C. One can invest and claim Rs. 1.5 lakhs in the options available like PPF, EPF, Life insurance premium, tax-saving mutual funds (ELSS), children’s tuition fees and housing loan principal repaid among others.

What are ELSS Funds?

Equity-linked Saving Schemes (ELSS) funds are tax saving mutual funds, investing primarily in equity and equity related securities of corporates. They enable investors avail of a deduction from total income, as permitted under the Income Tax Act, 1961 under section 80C.



Only 3 Years Lock-in Period


Bank Fixed Deposits

5 Years

Public Provident Fund(PPF)

15 Years

National Saving Certificate

5-10 Years

Life Insurance

5+ Years

Benefits of ELSS

Save Tax

The primary benefit of ELSS is tax saving. By investing in ELSS, you can claim annual tax deductions on investments up to Rs.1.5 lakh under Section 80C.

Power of Compounding

ELSS investments allow one to leverage the power of compounding owing to the lock-in period.

Wealth Creation

ELSS offer the scope for wealth creation, considering that the money is invested in equities.

No Maximum Period

With ELSS, there is no compulsion of redemption after the lock-in period, and you can continue to remain invested for as long as you wish. Investing for the long term helps one leverage investments to their full potential with the objective of generating wealth.

SIP Option

ELSS comes with the option of SIP. SIP allows one to invest even in small amounts at regular intervals.

Ease of Investment

One can invest in ELSS with a minimal amount in Lumpsum or SIP. Further, options such as dividend and growth are available with ELSS to suit every investor’s needs.

Why choose equity for long-term wealth creation?

Is there any tax associated with ELSS?

Long-Term Capital Gains (LTCG) tax is applicable on ELSS funds as the lock-in period is 3 years. Gains are taxed at 10% for gains over 1 lakh rupees.

What are the risks associated with ELSS Scheme?

There are various risks such as Market Liquidity Risk, Credit Risk, Re-investment Risk etc. associated with ELSS scheme. For complete risk factors and risk management strategies please refer the Scheme information document of scheme.