Every financial year, salaried Indians rush to find investment avenues to exhaust their ?1.5 Lakh limit under Section 80C of the Income Tax Act. While PPF, FDs, and NSC are popular, they offer sluggish returns. Equity Linked Savings Schemes (ELSS) are the undisputed kings of tax saving.
Why ELSS Beats the Competition
- Shortest Lock-in Period: ELSS has a lock-in period of just 3 years, the lowest among all 80C options (compared to 15 years for PPF and 5 years for Tax-saver FDs).
- Wealth Creation: Being equity-oriented, ELSS funds have the potential to deliver high double-digit returns, vastly outperforming inflation and traditional fixed-income products.
- SIP Convenience: You don't have to invest ?1.5 lakhs as a lumpsum. You can start an SIP of ?12,500 every month to comfortably max out your 80C limit without feeling the pinch.
Want to Start an ELSS SIP?
Contact our advisors to find the best ELSS funds suited for your risk profile and tax bracket.
Get Expert AdviceTaxation on ELSS
Since the holding period is over 1 year (due to the 3-year lock-in), the returns are treated as Long Term Capital Gains (LTCG). Currently, LTCG up to ?1 Lakh per financial year is completely tax-free, and any gains above that are taxed at a flat 10%. This makes ELSS incredibly tax-efficient even upon withdrawal.
