ELSS Funds – Invest in Tax-Saving Mutual Funds & Save Up to Rs 46,800 a Year in Taxes
INVEST IN TAX SAVING FUNDS & SAVE TAX UP TO
Rs 46,800
Invest before 31st March to claim
80C benefit
ELSS Funds – Invest in Tax Saving Mutual Funds & Save Upto ₹46,800 In Taxes
- Save up to Rs 46,800 a year in taxes
- Potential to offer the highest returns among all 80C options
- Lock-in period of 3 years, the shortest among all 80C options
- Get your investment proof instantly
Why are ELSS Mutual Funds the Best Tax-Saving Option?
Investing in ELSS mutual funds comes with the dual benefit of tax deductions and wealth accumulation over time. ELSS mutual funds have a lock-in period of just three years, the shortest among all tax-saving investments and have the potential to offer the highest returns among 80C options.
The shortest lock-in period of just 3 Years
2x returns of FD/PPF
Option to invest a small amount every month (SIP)
Invest as low as Rs 100 a month
Choose an ELSS Plan or Funds
Comparison of ELSS With Other Tax-Saving Instruments
There are various tax-savings schemes to help you accumulate wealth over time, such as FD, PPF and NSC to name a few. But the returns offered by these schemes are restricted. This is where ELSS stands out – its returns are generally higher, especially when the markets are on the bullish trend. This, coupled with a lock-in period of just three years, makes ELSS mutual funds the best tax-saving investment option. Even the post-tax returns of ELSS are much more attractive than that of any other tax-saving investment option.
| Investment | Returns | Lock-in Period | Tax on Returns |
|---|---|---|---|
| 5-Year Bank Fixed Deposit | 4% to 6% | 5 years | Yes |
| Public Provident Fund (PPF) | 7% to 8% | 15 years | No |
| National Savings Certificate | 7% to 8% | 5 years | Yes |
| National Pension System (NPS) | 8% to 10% | Till Retirement | Partially Taxable |
| ELSS Funds | 15% to 18% | 3 years | Partially Taxable |
Section-80C of the Indian Tax Act allows deduction upto Rs. 150,000 from your total
annual income. Yet, many taxpayers find a major chunk of this getting consumed by mandatory deductions.
1.5 Lakh Investment in ELSS will double in 5 years
Lowest lock-in period of 3 years
Why Should You Invest in ELSS Mutual funds With ClearTax
ELSS is one of the few tax-saving investments that give you the benefit of equity exposure—thereby enabling you to unleash the potential to earn much higher returns as compared to bank FDs, Provident Funds, NSC, and other tax-saving investment options.
Easy to Invest
Invest in top-performing funds handpicked by our in-house experts
Easy to track
Track / monitor your investments 24/7
Easy to withdraw
Withdraw anytime in 1-click with no paperwork
Paperless
The entire investment process is paperless and hassle-free
Bank graded security
Data security is our priority, and all your investments are completely secure
Investment proof for HR
You get your investment proof instantly and submit to HR.
FAQs (Frequently Asked Questions) on ELSS Mutual funds
As a tax-paying citizen of India, you are entitled to claim a tax rebate of up to Rs 1,50,000 a year on making the right use of Section 80C provisions. This helps you save up to Rs 46,800 a year in taxes.
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What are ELSS mutual funds?ELSS funds are tax saving mutual funds covered under Section 80C of the Income Tax Act, 1961. These funds have the potential to offer the highest returns among all Section 80C investment options and invest mostly in equity and equity-linked securities.
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What is the lock-in period of ELSS Funds ?ELSS mutual funds come with a lock-in period of just three years, the shortest of all tax-saving investment options.
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What is the maximum tax benefit that can be availed by investing in ELSS Funds every year?Section 80C of the Income Tax Act, 1961, provides tax deductions of up to Rs 1,50,000 a year. By making the full utilisation of Section 80C provisions, you can save up to Rs 46,800 a year in taxes.
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Why should you invest in ELSS Funds?By investing in ELSS mutual funds, you get the dual benefit of tax-saving and wealth accumulation over time. These funds are suitable for both short and long-term investments as they come with a lock-in period of just three years. The equity exposure of these funds provides you with the potential to earn much higher returns than any other tax-saving investment.
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Who should invest in ELSS Mutual funds?Anyone who wants to claim tax deductions of up to Rs 1.5 lakh under Section 80C provisions and are willing to take some risk should consider investing in ELSS. These mutual funds are equity-oriented, and they invest a minimum of 60% of their portfolio in equity and equity-linked instruments. Hence, it is essential to stay invested for at least three-five years to reap the best returns out of these funds.
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Is there any tax associated with ELSS Funds ?ELSS mutual funds are taxed like an equity fund since they invest primarily in equity and equity-linked instruments. As these funds come with a mandatory lock-in period of three years, the redemption of these funds necessarily results in the levying of long-term capital gains tax. Dividends offered by these funds are added to your income and taxed accordingly.
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What are equity funds?Equity funds are mutual funds that concentrate their investment towards equity and equity-linked instruments of companies of different market capitalisations.
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Should I choose SIP or lump sum?An SIP allows you to invest a fixed sum regularly in mutual fund(s) of your choice. A lump sum is when you invest on-time in bulk in mutual fund(s). SIP comes with few advantages:
- It allows you to invest small amount every month without the stress of paying in bulk
- Investing all through the year averages the cost of investing – you don’t end up paying too much per unit
- Gives you financial discipline
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How to invest in a mutual fund through SIP with ClearTax?The process is very simple on ClearTax.
Step 1: Select the fund(s) and the amount you want to invest every month
Step 2: Provide your details and make payment for the first month
Step 3: Activate SIP payments for the rest of the months via one of the 3 methods we offer -
Why invest through ClearTax?Investing in mutual funds with ClearTax is simple and straightforward. Our in-house experts do the research and shortlist only the best-performing mutual funds. It takes less than 5 minutes to invest on ClearTax.
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How to invest in mutual funds at ClearTax?The process is straightforward on ClearTax.
Step 1: Select the fund(s) and the amount you want to invest every month
Step 2: Provide your details
Step 3: Make payment and you are done -
Is KYC necessary for ClearTax?KYC is necessary for all fund houses. If you are investing through ClearTax, you need to do your KYC just once. The same KYC will be used for all further investments.
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How to do KYC on ClearTax?KYC verification through ClearTax is a very simple process. You can verify by:
Using OTP sent to your Aadhaar-registered mobile number OR
By uploading photos/scans of the required documents
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