Equity Linked Savings Schemes offer a potential 80C deduction with a three-year lock-in. This is shorter than many other tax instruments. Here is how they differ from a plain equity fund.
ELSS funds are equity-oriented schemes that qualify for deduction under Section 80C, subject to overall limits and your own tax situation. Because tax rules change, always verify the current law or speak with a chartered accountant before relying entirely on deductions.
Each SIP instalment typically carries its own three-year lock from the allotment date. That is a shorter time frame compared to PPF's long horizon, but it still matters if you might need cash urgently.
ELSS is not free of risk just because it saves tax. It is still a market-linked equity product. Ensure you use only the money you can comfortably leave locked in and tolerate volatility with.
Disclaimer
This article is for general education. It does not recommend specific mutual funds or securities. Past performance does not guarantee future results. Consult a qualified professional before investing.
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