ELSS Investments: Unlocking Tax Benefits With Equity-Linked Savings Schemes

elss investments unlocking tax benefits equity-linked savings scheme

Investors always look forward to indulging in tax-efficient investing, and ELSS investments offer a golden opportunity to those investors. ELSS schemes allow investors to build a robust portfolio while minimizing tax liabilities at the same time. This kind of investment scheme is generally found in the domain of mutual funds and helps the investor unlock substantial tax benefits via equity-linked savings schemes. 

However, one can learn about the total return and tax savings from ELSS schemes by using an ELSS calculator in the respective stock market app that is used by the investor. If you are interested in learning more about ELSS investments and how ELSS calculators prove beneficial in helping investors figure out their total returns and tax savings, read until the end. 

What Is ELSS? 

ELSS or Equity Linked Savings Schemes serve as a mutual fund category that offers investors the double benefit of appreciation of capital through investments in equity as well as potential tax savings. The tax saving scheme of ELSS abides by Section 80C of ITA (Income Tax Act). To secure a thorough understanding of ELSS, it is essential to look at the key features: 

Equity Exposure

A significant portion of ELSS funds are allocated to equities and instruments related to equities. This helps investors secure benefits from higher return potential that is often associated with investments in equities.


The investment strategies adopted by ELSS funds are spread across different sectors and industries, which assists in mitigating the risks as compared to investment in individual stocks. 

Lock-In Period

ELSS funds come with a mandatory lock-in period of three years, which means that the invested fund can’t be redeemed before the completion of the tenure. 

Potential Tax Benefits

Investments in ELSS offer significant tax benefits as it is deductible from the total table income for a given period. This effectively reduces the tax liability on the part of the investor. 

Capital Appreciation Potential

Over the long term, ELSS funds come with the potential to offer a considerable appreciation of capital as a result of their exposure to equity. However, it is to be noted that just like all equity investments, they, too, come with a level of risk which are subject to fluctuations in the market. 

Professional Management

ELSS funds are looked after and managed by expert professionals in the industry who make investment decisions on behalf of the investor. Therefore, the investor is freed from all the hassle of decision-making. 

ELSS Fund Tax Benefits

According to the Income Tax Act of 1961, investing in ELSS mutual funds may ensure tax deductions ranging to a maximum limit of Rs 1,50,000 for a year. Under this, one may save a maximum of Rs 46,800 for one year in taxes. 


Among all the other benefits that ELSS retains, tax saving is one of the most attractive ones for investors. By securing both capital appreciation along with tax deductions, investors can accomplish their long-term financial goals without losing a huge chunk of money in taxation.

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