Equity Linked Savings Scheme (ELSS) are open-ended mutual funds that provide benefit of investment along with tax savings. These are otherwise known as tax sever mutual funds. ELSS funds mostly invest in equity and equity related instruments. Both individuals and HUFs can invest in ELSS funds for tax benefit. While you can invest any amount in Equity Linked Savings Scheme (ELSS) for earning good returns, only Rs. 1.5 Lakh will qualify for tax benefit under section 80C.
ELSS have lock-in period of 3 years and you can’t withdraw funds before the completion of lock-in period in any circumstances. While lock-in period is 3 years, you can stay invested as long as you want after completion of the initial 3 years.
Investment in ELSS can be done anytime throughout the year. You can invest lump sum or can invest via small amount every time via SIP. All other facility of mutual funds remains the same for ELSS.
These are risky investments as they fall in category of equity mutual funds. Therefore, investors must be aware of the scheme details before investing into ELSS.
You can also start goal based saving in these Equity Linked Savings Scheme (ELSS) as you plan to invest Rs. 1.5 Lakh every year for tax saving purpose.