Get Started
Get Started
Looking for a tax-saving investment that can also provide long-term wealth creation potential? ELSS (Equity Linked Savings Scheme) is a type of equity mutual fund that qualifies for a tax deduction under Section 123 of the Income-tax Act, 2025 (formerly Section 123 (formerly 80C)), available only under the old tax regime, subject to applicable tax laws and eligibility.
It combines tax-saving benefits with market-linked investment potential, making it relevant for investors who understand equity-market risk and have an appropriate investment horizon.
ELSS stands for Equity Linked Savings Scheme. ELSS is a category of equity mutual funds that invests predominantly in equity and equity-related securities.
Eligible investments can qualify for a tax deduction under Section 123 (formerly 80C), subject to the applicable provisions of the Income Tax Act. ELSS also has a 3-year statutory lock-in period, which is shorter than many traditional tax-saving investment options.
ELSS is market-linked, so the investment value can rise or fall.
Eligible ELSS investments can provide a deduction under Section 123 (formerly 80C), subject to applicable tax rules and the tax regime you are eligible for.
Because ELSS invests predominantly in equities, it provides the potential for long-term capital growth.
ELSS has a 3-year lock-in period, which is an important feature when comparing it with other tax-saving options.
ELSS can generally be invested through SIP or lumpsum, subject to the scheme's applicable requirements.
₹1,50,000 in ELSS
If eligible under the applicable tax provisions, this amount may qualify for a Section 123 (formerly 80C) deduction.
However, the actual tax benefit depends on factors such as:
The investment itself remains market-linked, and its future value is not guaranteed.
You can generally invest in ELSS through:
Invest smaller amounts periodically.
Invest a larger amount at one time.
The choice depends on your cash flow, tax-planning requirements, investment horizon and risk profile.
If investing through SIP near the end of the financial year, remember that each SIP instalment is subject to its own 3-year lock-in from the date of investment.
ELSS may be relevant for investors who:
ELSS may not be suitable for everyone, particularly investors who are uncomfortable with equity-market fluctuations or need short-term access to their money.
Different tax-saving investments have different characteristics.
| Feature | ELSS |
|---|---|
| Investment Type | Equity Mutual Fund |
| Tax Benefit | Section 123 (formerly 80C), subject to applicable provisions |
| Lock-in | 3 years |
| Returns | Market-linked |
| Risk | Equity-market risk |
| Investment Method | SIP / Lumpsum |
The right choice should depend on your tax situation, financial goals, risk profile and investment horizon.
Tax saving should not be the only reason to choose an investment. A better approach is to consider:
Your investment should ideally fit into your overall financial plan rather than being selected only to reduce your tax liability.
ELSS stands for Equity Linked Savings Scheme. It is an equity-oriented mutual fund category that can qualify for specified tax benefits under Section 123 (formerly 80C), subject to applicable provisions.
ELSS has a statutory lock-in period of 3 years. Each investment is subject to its own applicable lock-in period.
Yes, ELSS can generally be invested through SIP, subject to the scheme's applicable terms.
No. The tax treatment of ELSS investments and capital gains depends on applicable tax laws and your circumstances.
ELSS is an equity mutual fund and is therefore subject to market risk. Its value can fluctuate.
Tax benefits under Section 123 (formerly 80C) are generally associated with the old tax regime, subject to applicable law. Investors should evaluate their applicable tax regime and current tax rules before investing.
Not necessarily. ELSS should be considered in the context of your overall financial goals, risk profile and investment horizon.
Share a few details and our team will help you plan a tax-saving investment that fits your goals.
Your request has been received. Our team will get in touch shortly.