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/learn/elss-tax-saving-fundsMutual Funds & ETFsTax Saver4 min read
ELSS: Equity Linked Savings Scheme (Section 80C)
The tax-saving mutual fund with the shortest lock-in period and highest wealth-building potential.
Core Takeaways for Indian Investors
- ✓ELSS qualifies for deduction under Section 80C up to ₹1,50,000 (under Old Tax Regime).
- ✓It has the shortest lock-in period (3 years) among all 80C options (PPF has 15 years, Tax FD has 5 years).
- ✓Invests 80%+ in diversified equities, giving inflation-beating long-term returns.
- ✓Each SIP installment has its own 3-year lock-in from the date of investment.
#1ELSS vs PPF vs Tax-Saver Bank FD
Section 80C offers multiple avenues to save tax. However, traditional choices like Tax-Saving FDs lock your money for 5 years at a modest 7% taxable interest. PPF locks your money for 15 years at 7.1%. ELSS locks for only 3 years and participates in Indian economic growth!
Head-to-Head Comparison
| Criteria | ELSS (Tax Saving Mutual Fund) | Public Provident Fund (PPF) |
|---|---|---|
| Lock-in Period | 3 Years (Shortest) | 15 Years |
| Asset Class | Equity (Stocks) | Government Debt |
| Historical Returns (10-Yr) | 12% - 15% CAGR | 7.1% (Govt declared fixed) |
| Tax on Gains | LTCG @ 12.5% above ₹1.25 Lakhs | Exempt (EEE status) |
Interactive Simulator
New vs Old Tax Regime Calculator
Compare side-by-side tax liability and optimize 80C/80D/NPS savings
Knowledge Check: Test Your Understanding
1 QuestionWhat is the lock-in period of an ELSS mutual fund investment?