What is ELSS Mutual Fund?
Equity Linked Savings Scheme (ELSS) is a type of mutual fund that qualifies for tax deduction under Section 80C of the Income Tax Act, 1961. It is the only mutual fund category that comes with a tax benefit.
Investors can save tax on investments up to ₹1.5 Lakhs in a financial year. Depending on your tax slab, you can save up to ₹46,800 (30% slab + cess) annually!
Why ELSS is Better than PPF/FD?
Traditionally, Indians invested in PPF (Public Provident Fund) or Tax Saving FDs. However, ELSS has rapidly gained popularity because:
- Shortest Lock-in: ELSS has a lock-in period of just 3 years, compared to 15 years for PPF and 5 years for FDs.
- Higher Returns: Being equity-linked, ELSS funds have historically delivered 12-15% returns, beating inflation and fixed income products comfortably.
- SIP Convenience: You don't need to put ₹1.5 Lakhs at once. You can start a SIP of just ₹500/month.
How to Maximise 80C Benefit?
To fully utilize the ₹1.5 Lakh limit, you need to invest ₹12,500 per month through SIP. Our calculator helps you visualize exactly how much tax you save based on your input amount and tax bracket.