ELSS Tax Saving Calculator
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Save Taxes & Grow Wealth Simultaneously with ELSS Funds
An Equity Linked Savings Scheme (ELSS) is a category of equity-oriented mutual fund that offers tax deduction advantages under **Section 80C** of the Income Tax Act. You can claim tax exemptions on investments up to **₹1.5 Lakhs** per fiscal year.
ELSS is unique because it features a **lock-in period of exactly 3 years**—which is the shortest lock-in period among all Section 80C options in India. In comparison, public provident funds (PPF) lock your capital for 15 years, and National Savings Certificates (NSC) or tax-saving bank FDs require a minimum lock-in of 5 years.
Because ELSS capital is invested in equity markets, it has historically yielded significantly higher returns (12-15% annually over long runs) than traditional fixed income instruments, making it the ideal tax-saving instrument for young, wealth-focused investors.
Frequently Asked Questions
Q.What is ELSS?
ELSS stands for Equity Linked Savings Scheme. It is a category of equity mutual funds that qualifies for tax deduction under Section 80C of the Income Tax Act up to ₹1.5 Lakhs per year.
Q.How much tax can I save with ELSS?
You can save up to ₹46,800 in taxes annually if you fall in the 30% tax bracket (plus 4% cess) by investing the maximum ₹1.5 Lakhs limit.
Q.What is the lock-in period of ELSS?
ELSS mutual funds have a mandatory lock-in period of 3 years. This is the shortest lock-in period among all Section 80C tax-saving options like PPF (15 years) or Tax-Saving FD (5 years).
Q.Can I invest in ELSS via SIP?
Yes, you can start a monthly SIP in ELSS funds. However, remember that every individual monthly instalment is locked in for exactly 3 years from its respective investment date.
Q.Are returns on ELSS mutual funds taxable?
ELSS gains are treated as Equity Capital Gains. Long-Term Capital Gains (LTCG) above ₹1.25 Lakhs per financial year are taxed at 12.5% (as per latest budget updates).