ELSS Funds: Save Tax Under Section 80C With Equity Returns

ELSS (Equity Linked Savings Scheme) funds are the only mutual funds with a direct tax benefit.

The benefits - Tax deduction: investments up to ₹1.5 lakh/year qualify under Section 80C. - Shortest lock-in: just 3 years — versus 5 years for tax-saving FDs and 15 for PPF. - Equity growth: your money is invested in stocks, so long-term returns have historically beaten fixed-income 80C options.

Things to know - The 3-year lock-in is per instalment — each SIP instalment is locked for 3 years from its own date. - Gains above ₹1.25 lakh a year are taxed as LTCG at 12.5% (see our tax guide). - ELSS suits investors who want tax saving and long-term equity exposure — not those who need the money within 3 years.

Find the best ELSS See our data-ranked list: Best ELSS funds, ranked by the tax-saver FundScore (consistency + cost aware). Start early in the financial year to benefit from a full year of SIPs.