Grow Wealth and Save Tax Upto Rs 46,800* with ELSS Funds

Best Tax Saving Choice

Earn Higher Returns

3 years of Lock-in Period

Tax saving elss

ELSS VS Other Tax Saving Options


ELSS schemes are tax-saving mutual funds with a lockā€”in period of 3 years. Along with wealth generation, you can save tax with ELSS mutual fund under Section 80C of IT Act. After the lock-in period, you can either redeem your money or can keep investing for higher return. You can practice systematic investment for a minimum of Rs. 500 per month in ELSS mutual funds. As per your convenience, you can choose the investment options of ELSS tax saving mutual funds namely- growth, dividend and dividend reinvestment option.


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NSC is National Savings Certificate is a government certificate which you can avail in post office.The lock-in period of NSC is 5 and 10 years. You can invest a minimum amount of Rs. 100 which is a very very low amount. The return that you expect to get ranges from 7-8%. Under Section 80C of Income Tax Act, you can claim a tax deduction upto Rs. 1 lakh.


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PPF is Public Provident Fund which was introduced by our government with a motive to help you to save for your ols age. The minimum amount that you can invest in your PPF a/c is only Rs.500. Based on your investment, you can claim a tax deduction upto Rs. 1.5 lakhs under Section 80 C of Income Tax Act. 15 years of lock-in period is mandated for PPF. Unlike ELSS fund, you can partially withdraw from your PPF a/c after 7 years.Usually, 7-8% interest rate per annum is offered by the government. The tax is exempted on the amount you invested.


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FD is simply Fixed Deposit. It is an instrument through which you can invest a lump-sum amont with any banking institutions. The lock-in period of FD is 5 years. You can expect a return of 6-7%. You cannot withdraw amount prematurely before the lock in period. But you enjoy the benefit of availing loan against your FD at attractive interest rates.You can easily claim a tax deduction upto Rs. 1.5 lakhs in a financial year. In accordance with your tax bracket, the interest earned from your deposit is taxable.


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ULIP is Unit Linked Investment Plan which is the combination of both insurance cover ande investment. ULIP aims to generate wealth alongwith life insurance coverage. That means, it helps in investment at the same time secures you with insurance coverage, Let us explain it properly. The insurance company puts your invested money in a life insurance and puts the rest amount as per your prefernce in debt, equity or hybrid fund based on your financial goal. During the lifecycle of the investment, you have the right to switch your fund as per your need.

The lock-in period of ULIP is 5 years.The return that you expect depends on which fund you have invested. Now we will talk about the tax deductions on ULIP. The lump sum amount (or the gain) that you receive is not taxable under Section 10(10D). Also, you need to remember that, 2/3 amount of the lump-sum amount is taxable, but 1/3 amount of your person coverage is not taxable.


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NPS stands for National Pension Scheme. It is nothing but a government scheme where you get the opportunity to get a pension upon your requirement if you invest during your earning years. So, the lock-in period of NPS is up to your requirement. Initially, you can invest a minimum amount of Rs.500, but you have to invest a minimum of Rs. 6000 in a year. Under NPS, a maximum of 50% is invested in equity oriented instruments and the remaining is distributed among the treasury,government bonds etc. Based on your investment, you can easily claim a tax deduction upto Rs. 1.5 lakhs under Section 80C of Income Tax Act and also additional deduction upto Rs. 50000 under Section 80CCD(1B) of the Income Tax Act. Note that, under the condition of purchasing an annuity, you can prematurely withdraw upto a specified limit. Also, the amount at the time of the maturity is partially taxable.


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Investment Lock-in period Returns (Approximate) Tax exemptions
PPF 15 years 7-8% Taxable
ULIP 5 years Depending on the type of fund Partially taxable
NPS Till your retirement 7-11% Taxable
FD 5 years 6-7% Taxable
NSC 5 & 10 years 7-8% Taxable
ELSS 3 years 12-16% Tax Free*

ELSS Return Calculator Vs Other Tax-Saving Tools

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The result is based on historic performance of tax saving ELSS fund

What is ELSS?

Earning money, spending it properly and saving efficiently- are the 3 most important key points to remember for a responsible earning individual. To use your money in a fully optimized manner, you need to have a full proof financial planning starting from the financial year. But most of us dont have a clear idea on how to save money and where to invest. So, here we will discuss about a method which will help to invest money with a high return and at the same time tax deductable. ELSS.

ELSS is Equity Linked Savings Scheme. It is a diversified equity mutual fund. ELSS mainly invests in stock market to generate wealth appreciation. If you are investing in ELSS tax saving mutual fund, then you get tax deduction upto Rs. 1.5l akhs under Section 80C of Income Tax Act.ELSS Mutual fund has a minimum lock-in period of 3 years. ELSS mutual fund mainly invests more than 65% of the portfolio in equity. If your capital gain exceeds Rs. 1 lakh after one year,then the long-term capital gain (LTCG) is taxed at 10%. But ELSS provides the best return after the tax cut in comparison to other tax-saving options. You can invest a minimum amount of Rs. 500 in ELSS in 2 ways- either through lump-sum investment or through SIP (Systematic Investment Plan).

Similar to other mutual funds, ELSS tax saving mutual fund has the following investment options-
  • Growth Option

    Under the growth option, you will receive the return at the end of your investment tenure, which will increase the total NAV.
  • Dividend Option

    When dividend is declared by the respective AMCs, you will receive your dividend income (either weekly, quarterly, monthly or yearly) which is tax deductible.
  • Dividend with Reinvestment Option

    Under this option, you can invest the dividend to the invested mutual fund which will help add up to the NAV value.
An intelligent investor aims to invest in a product where he is assured of a good amount of return and at the same time, can helps in tax saving. Under Section 80C of Income Tax Act, there are many tax saving instruments such as- Unit Linked Insurance Plans, Public Provident Fund, ELSS Mutual Fund. But ELSS is one of the best tax saving instrument. For investing in ELSS tax saving mutual fund, there is no limit on your age to invest, You can invest from the day you start earning. Also your parents who are nearer to their retirement can also invest in ELSS as the minimum lock-in period is 3 years. Within these 3 years, you can see your money grow. After enjoying capital gain, you can keep your money in ELSS tax saving mutual fund for a larger time period, where you will enjoy the big return and also save your tax. So, what are you waiting for? Invest in ELSS today, for a better tommorrow.

To have a better idea on ELSS, lets see some of its unique features-
  • You as an investor can enjoy the flexibility of investing in ELSS tax saving mutual fund. You can opt for any of the 2 methods to invest- either one time investment i.e, Lump-Sum Investment or regular monthly investment i.e, Systematic Investment Plan.
  • You can keep your money in ELSS fund for a minimum period of 3 years. After 3 years, if you wish to redeem the fund, you can easily do it.
  • The minimum amount that you can invest is only of Rs.500, which is obviously not so expensive in your part.
  • ELSS has below mentioned investment options for you-
    • Growth option
    • Dividend option
    • Dividend reinvestment option
  • ELSS fund invests majorly in equity related instruments.
  • You can invest in ELSS tax saving mutual fund through online as well as offline mode.
  • When you are investing in ELSS Tax Saving Mutual Fund,definitely you are aware of the risk related to the market.
Here are some of the key points which you should always remember,before investing in ELSS tax saving mutual fund online-
  • Risk Appetite

    At first, you need to focus on your risk appetite. If you have a high risk appetite, then you can easily invest in mid and small cap companies with long investment horizon. But in case, you have a low or moderate appetite, you can go for large cap companies.
  • Performance history of fund houses

    You need to see the performance history of the fund houses online for over 10 years. Always invest in the ELSS of that fund house which has consistently performed for over a period of 5 to 10 years.
  • Fund Performance Criteria

    You should evaluate the fund performance on some important criteria like- Alpha, Beta, Standard Deviation, Sortino ratio and Sharpe ratio. The best ELSS fund should have a higher Sharpe ratio.
  • Fund Performance

    When selecting the best ELSS tax saving mutual fund, always see the performance of the fund online for over 10 years. Always go for that ELSS fund which performs better than the benchmark.
  • Risk for excess Return

    Along with the return, you need to concentrate on the one unit risk taken to generate the excess return.
  • Volatility

    Also, you need to examine the volatility nature of the market. Before going for investment in ELSS online, you need to check the standard deviation, variance value and beta of the portfolio.
  • Expense Ratio

    Last but not the least, you should consider the expense ratio. Now what is expense ratio? It is nothing but the amount of your invested money that is being spent to manage the expenses of the fund. Do remember that, you should invest in that ELSS fund which have lower expense ratio.


. What is the minimum lock-in period for investing in ELSS ?
Ans: ELSS fund has a minimum lock-in period of 3 years.
. Under which section of Income Tax Act, does ELSS falls ?
Ans: Under Section 80C of Income Tax Act, ELSS offers tax benefit.
. What are the options of ELSS fund ?
Ans: Following are the types of ELSS fund-
  • Growth option
  • Dividend option
  • Dividend Reinvestment option
. What are the methods to invest in ELSS fund ?
Ans: There are 2 methods to invest in ELSS fund-
  • Lump-sum Investment
  • SIP (Systematic Investment Plan)
. What is the minimum amount that you can invest in ELSS ?
Ans: You can invest in ELSS fund with a minimum amount of Rs.500 per month.

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