ELSS investments up to 1,50,000 are eligible for deduction from your taxable income under section 80 C.

ELSS has shortest lock in period (3 years).

Capital gains arising from redemptions and dividends are tax free.

Higher return compared to other schemes in the class.

You can Invest through a Systematic Investment Plan.

You can opt for a Dividend Payout option.

Advantages Of Investing In ELSS

How do deduction u/s 80C work?

Particulars Without Tax Saving Investments u/s 80C

With Tax Saving Investments u/s 80C

Gross Total Income Rs.7,50,000 Rs.7,50,000

Exemption u/s 80C Nil Rs.1,50,000

Total Income Rs.7,50,000 Rs.6,00,000

Tax on Total Income Rs.75,000 Rs.45,000

Tax saved Nil Rs.30,000

Comparison of ELSS and other Tax Saving instruments 

Particulars PPF NSC ELSS

Tenure 15 years 6 years 3 years

Returns 8.70 % *(Compounded Annually)

8.50 to 8.80 % *(Compounded half-yearly)

Returns / Dividends are Market linked and not assured

Minimum Investment Rs.500 Rs.100 Rs.500

Maximum Investment Rs.150,000 No limit^ No limit^

Amount eligible for deduction u/s 80C

Rs.150,000 Rs.150,000 Rs.150,000

Taxation for interest Tax free Taxable Dividends and capital gain tax free

Safety/ Risk Highest Safety Highest Safety High Risk

Lock-in Period 15 Years - Partial Withdrawal after 6 years is permitted

6 Years 3 years