ALL >> Investing---Finance >> View Article
What Is Equity Linked Savings Scheme Fund? & Benefit Of The Elss Fund

ELSS stands for Equity Linked Savings Scheme. The scheme is beneficial for an individual or a Hindu Divided Family (HUF) for saving of 1.5 lacs on their tax deduction. The ELSS is carried out under the 80C of Income Tax Act 1961. ELSS funds are similar to diversified equity funds and differ only by the lock-in period and deduction benefits. Equity Linked Savings Scheme is also known as tax saving mutual funds.
The most significant feature of ELSS is that the lock-in period is only 3 years and it is also applicable to your SIPs (Systematic Investment Plan). The lock-in period is the same even for a monthly installment of your SIP. After the period of 3 years, the invested units can be either redeemed or switched.
Here are some benefits of the ELSS fund: The benefits of ELSS are almost similar to the benefits of a mutual fund of other types. The earnings you get after finishing the lock-in period are 100% tax-free. You get to enjoy the total amount of returns without any deduction. The interest is compound, and hence, the earnings will only be in the multiple numbers ...
... of your principal amount.
How is ELSS better than PPF? The most prominent difference between the ELSS and Public Provident Fund (PPF) is the duration of the lock-in period. The lock-in period for ELSS is 3 years, whereas for PPF it is 15 years. Both the investment schemes are issued by the Government of India. The amount invested in ELSS can be displaced a lot quicker in emergency cases than in PPF.
What is the investment procedure for ELSS? The first step is going through the Know your customer (KYC) process and submitting your Permanent Account Details (PAN) to the bank or any asset management company. KYC is a process used for customer identification and is the first step towards opening an account with any financial body. The process is used to set a unique identifier of the account holder with his/her photo identity and residential address proof. Further investment procedures can be done by appointing an agent, or a middle man or the investor can do it on his own.
You can also make ELSS investments online. You can register to an online mutual funds website and immediately start with the procedure.
Ways of receiving benefits from ELSS The benefits gained from ELSS is entirely dependent on market conditions. The investor has the following options for growth:
Dividend: Rather than getting the wholesome amount, you can opt for timely benefits with the option of a dividend. A dividend received by an investor is not liable for taxation.
Dividend Reinvestments: With the option of dividend reinvestments, the investor can give back all the dividends received to be added to the Net Asset Value(NAV). It can be done when the market conditions during the lock-in period of your scheme are favorable.
ELSS is a smart mixture of stability, growth, and tax savings. When invested properly, the ELSS can give huge benefits to the investor.
ELSS stands for Equity Linked Savings Scheme & ELSS is also known as tax saving mutual funds. The most significant feature of ELSS is that the lock-in period is only 3 years and it’s 100 % tax free. Visit us to know more about Mutual Funds Sahi Hai.
Add Comment
Investing / Finance Articles
1. The Rise Of Investment Banking Companies In Hyderabad’s Financial SceneAuthor: Verity knowladge solutions
2. Globe Civil Projects Ipo Gmp 2025 | Price Band ₹67–71, Dates & Gmp ₹0
Author: finowings
3. Investing Ira Gold, California: Gold Ira Investment
Author: Gold and Silver Investment News
4. Expert Accounting Services In South Auckland: Supporting Growth In Manukau And Beyond
Author: WhizBiz
5. A Short Guide To Turn Your Pension Into An Annuity In The Uk
Author: Finance Advisor
6. Globe Civil Projects Ipo: Key Dates, Price Band & Gmp
Author: finowings
7. Why Hyderabad Is The Best City For First-time Homebuyers In 2025
Author: anilsinhaanni
8. Top Crypto Security Trends In 2025: What Every Investor Must Know?
Author: Xiaou Princess
9. Term Loan Vs Line Of Credit: What Hyderabad Businesses Should Know
Author: anilsinhaanni
10. How A Certificate Course In Retail Can Open Doors To High-paying Jobs
Author: sandeep
11. Leveraging Technology: How Virtual Cfos Utilize Tools For Financial Analytics
Author: Dipanjan Das
12. Top Features To Look For In A Stock Trading Platform
Author: Aman Kumar
13. Top Trade Credit Finance Solution Providers: A Substantial Guide For Businesses
Author: Merchant
14. Top Benefits Of Investing In Property Through Your Super In Australia
Author: Rick Lopez
15. The Effect Of Fee Structures On Investment Returns Over The Years
Author: Amit