A tax-saving equity mutual fund with a mandatory 3-year lock-in, eligible for deduction under Section 80C of the Income Tax Act.
ELSS (Equity Linked Savings Scheme) is a type of diversified equity mutual fund that qualifies for tax deductions of up to ₹1.5 lakh per year under Section 80C of the Income Tax Act. It has the shortest lock-in period (3 years) among all 80C instruments.
ELSS does two jobs at once: it saves you tax now and grows your money over time. Invest ₹1.5 lakh in ELSS, save up to ₹46,800 in taxes (at 30% bracket), and your money stays invested for at least 3 years while compounding in equities.
Each unit purchased via ELSS is locked in for 3 years from the date of allotment.
In SIP investments, each monthly instalment has a separate 3-year lock-in from its purchase date.
Post lock-in, you can redeem. Gains above ₹1 lakh are taxed at 10% LTCG (Long-Term Capital Gains).
ELSS funds invest primarily in equities, so they carry market risk.