ALL >> Investing---Finance >> View Article
Elss Vs Other Section 80c Schemes: A Detailed Comparison

Excellent potential of wealth creation and tax efficiency are typically the two most popular considerations when investing in a financial instrument. You want your investment to earn you decent returns and help you meet your goals, but at the same time avoid high tax liability to drain your returns. Schemes classified under Section 80C are a suitable pick. They allow you to build your corpus and promises incredible tax efficiency.
As per Section 80C, you can claim a tax deduction of Rs. 1.5 lakh on your investment. This adds up to Rs. 46,800 of tax savings in a financial year. Several schemes are classified under Section 80C like the Public Provident Fund, National Pension Scheme, and Unit Liked Insurance Plan.
Another popular scheme under Section 80C is Tax-Saving Mutual Fund also called the Equity-Linked Savings Scheme. Following is a detailed comparison between ELSS and other Section 80C schemes:
Investment returns
ELSS Funds can earn better returns than most other Section 80C schemes. This is because the fund primarily invests in Equities and Equity-linked instruments. This allows ...
... you to earn market-adjusted returns. Since the investment returns are linked to market standing, they are not guaranteed. Other Section 80C schemes like PPF and NPS offer reasonable but fixed returns.
Flexibility of investments
With Tax-Saving Mutual Fund, you enjoy maximum flexibility. There are two ways to invest: Lumpsum Investments and Systematic Investment Plans. With Lumpsum Investments, you make a significant one-time investment. By opting for SIPs, you make periodic contributions as per your affordability to the corpus. Furthermore, you can always modify your ELSS investment portfolio.
You can add Equities or switch to a new fund altogether to make better returns. This option is available with most of the other schemes.
Shortest lock-in period
Lock in period is when your invested sum cannot be withdrawn or sold. Almost all Section 80C schemes follow a lock-in period. ELSS Funds have the shortest lock-in period of three years. Schemes like PPF and NPS have a lock-in period of 15 years and until the age of 60 years, respectively. This is a considerable span of time.
A shorter lock-in period ensures you can easily access your invested amount during emergencies. Hence, it is an important consideration to make.
Diversified portfolio creation
A plus point of investing in any types of Mutual Funds in India is it allows you to create a diverse portfolio. This helps you maximise your returns and mitigate associated risks. You can invest in various Equities based on market capitalisation, industry, or sector. Generally, other Section 80C schemes invest in a specific set of assets only, leaving very little or no scope for diversification.
Add Comment
Investing / Finance Articles
1. How To Protect Your Crypto Wallet: Essential Tips Beyond PasswordsAuthor: Eldon Ryder
2. Ipo Grey Market Premium (gmp) Guide | Live & Upcoming Ipo Gmp Trends
Author: finowings
3. Top Benefits Of Enrolling In A Certificate Course In Banking
Author: sandeep
4. Crizac Ipo Gmp 2025: Key Dates, Price Band & Gmp Update
Author: finowings
5. Stock Market Advisory: The Growing Importance Of Professional Stock Advisory Services
Author: Vinay
6. What Is Sip And How Does It Help Build Wealth?
Author: Sagar Shah
7. Choosing The Right Accounting Firm In East And South Auckland: What You Need To Know
Author: WhizBiz
8. Goldco Review: Best Ira Guide For Investors, Retirement Planners, & Retirees
Author: Gold and Silver Investment News
9. Navigating Financial Growth With Avendus
Author: Drishti Desai
10. The 4 Types Of Income You Need For True Financial Freedom
Author: Wealth Samurai
11. Why Hyderabad Millennials Are Choosing Personal Loans Over Credit Cards
Author: anilsinhaanni
12. How A Retail Lending Specialist Can Help You Secure The Best Loan Deals
Author: sandeep
13. How Knee Replacement Improves Quality Of Life For Arthritis Patients
Author: uttam
14. Stock Market Advisory: Unlocking Investment Success With Share Market Advisory Services
Author: Vinay
15. The Rise Of Investment Banking Companies In Hyderabad’s Financial Scene
Author: Verity knowladge solutions