Key Takeaways
✓₹1.5 lakh deduction under Section 80C
✓Shortest lock-in of just 3 years
✓Equity fund — high return potential
✓Up to ₹46,800 in tax savings possible
What is ELSS?
ELSS is a special type of equity mutual fund that provides a tax benefit under Section 80C of the Income Tax Act. If your income is taxable, investing in ELSS allows you to claim a deduction of up to ₹1.5 lakh. That's a real saving of up to ₹46,800 in cash (in the 30% tax bracket).
ELSS vs PPF vs NSC — which is better?
PPF: 7.1% return, 15-year lock-in. NSC: 7.7% return, 5-year lock-in. ELSS: 12–15% historical return, only 3-year lock-in! ELSS offers the shortest lock-in and the highest return potential. The only trade-off: it is market-linked and not guaranteed.
How to invest in ELSS?
Step 1: Open Groww or Kuvera. Step 2: Filter by 'Tax Saver' or 'ELSS'. Step 3: Choose a top-rated fund (Mirae Asset Tax Saver, Axis Long Term Equity, Parag Parikh Tax Saver). Step 4: Start a SIP from ₹500/month or invest a lump sum. Step 5: Invest before March 31st for the current year's tax benefit.
Important: 3-year lock-in
Money invested in ELSS cannot be withdrawn before 3 years. For SIPs, each monthly installment is locked for 3 years from its own date. For example, a SIP installment from March 2025 will be available from March 2028 onwards. Plan your investments accordingly.
Ready to invest?
Start your first SIP on Groww or Kuvera — takes just 15 minutes. Start with just ₹500/month!