What are ELSS Funds?

ELSS Mutual Funds, or Equity Linked Savings Scheme Mutual Funds, are tax-saving mutual funds in India. These funds, categorized as equity funds, primarily allocate their assets to equity or equity-related products. Recognized as tax-saving plans, ELSS funds offer a significant advantage by allowing a tax deduction of up to Rs.1.5L from your annual taxable income under Section 80C of the Income Tax Act. For the amount above 1.5L are taxable at 10%, and there is no benefit of indexation provided. Choosing ELSS funds not only serves as a means to save taxes but also represents an equity-oriented investment strategy. The three-year lock-in period emphasizes a commitment to a mid-term investment horizon, contributing to the overall appeal of ELSS funds as a tax-efficient and growth-oriented financial instrument.

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Main category: Finance

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Tags: mutual funds

Added: 05-01-2024