Equity-linked savings scheme

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Equity-linked savings scheme popularly known as ELSS are close-ended,lock-in period of 3 years diversified equity schemes offered by mutual funds in India.[1][2] They offer tax benefits under the new Section 80C of Income Tax Act 1961.[3] ELSS can be invested using both SIP(Systematic Investment Plan) and lump sums investment options.[4][5][6] There is a 3 years lock-in period, and thus has better Liquidity compared to other options like NSC and Public Provident Fund.[7]

Comparison between ELSS and other tax-saving methods[edit]

The comparative between ELSS and popular other tax-saving options in India:[8]

Investment Returns Lock-in period Tax on Returns
5-Year Bank Fixed Deposit 6 to 7% 5 years Yes
Public Provident Fund (PPF) 7 to 8% 15 years No
National Savings Certificate (NSC) 7 to 8% 5 years Yes
National Pension System (NPS) 8 to 10% Till retirement Partially Taxable
ELSS Funds 15 to 18% 3 years Partially Taxable

See also[edit]


  1. ^ http://economictimes.indiatimes.com/mf/analysis/tax-saving-recycling-your-elss-investments-is-a-very-bad-idea/articleshow/56512440.cms
  2. ^ Five mistakes to avoid when investing in an ELSS fund
  3. ^ "Funds aimed at enabling investors to avail tax rebates under Section 80-C of the Income Tax Act".
  4. ^ "Investment in SIPs yields better returns than timing the market: Study".
  5. ^ "What's a mutual fund SIP?".
  6. ^ "Should you invest a lumpsum in ELSS?".
  7. ^ http://articles.economictimes.indiatimes.com/2013-02-18/news/37160319_1_equity-fund-lock-in-period-growth-option
  8. ^ ClearTax. "ELSS Funds - Invest in Best ELSS / Equity Linked Savings Scheme Funds". cleartax.in. Retrieved 2018-11-04.