Mutual Funds · Tax-saver
ELSS (Tax-Saving)
Equity Linked Savings Scheme — the only equity MF eligible for Section 80C deduction (₹1.5L/yr). 3-year mandatory lock-in (shortest among all 80C options). Returns 12-18% CAGR historically. Best 80C choice for anyone in old tax regime + 7+ year horizon.
Who needs this
Anyone in OLD tax regime wanting both 80C deduction + equity returns. Suitable for 7+ year horizon. Avoid if your only goal is tax-saving (PPF safer for that).
Category at a glance
Lock-in period
3 years
Shortest of 80C options
Section 80C cap
₹1.5L/yr
Combined with EPF/PPF/NSC
Tax saved at 30% slab
₹46,800/yr
On full ₹1.5L investment
Typical 3-yr CAGR
12-18%
Equity-linked
Expense ratio (direct)
0.5-1.2%
LTCG
12.5%
Above ₹1.25L/yr (post-3-yr lock-in)
Top 5 elss (tax-saving)
Source: AMFI + AMC factsheets · refreshed quarterly
| Fund | AMC | Expense % | 3y CAGR |
|---|---|---|---|
| Mirae Asset ELSS Tax Saver | Mirae | 0.59% | 15.7% |
| Quant ELSS Tax Saver | Quant | 0.81% | 22.3% |
| Axis ELSS Tax Saver | Axis | 0.78% | 12.8% |
| Parag Parikh ELSS Tax Saver | PPFAS | 0.62% | 18.1% |
| Nippon India ELSS Tax Saver | Nippon | 0.70% | 16.4% |
Key decisions
- Q1
ELSS vs PPF vs FD for 80C?
ELSS: 12-15% returns, 3-yr lock. PPF: 7.10% guaranteed, 15-yr lock. FD: 7%, 5-yr lock, taxable interest. ELSS wins on returns; PPF wins on safety; FD rarely wins anything for 80C.
- Q2
Lump sum or SIP for ELSS?
SIP if you can — distributes cost basis. Lump sum if you're rushing in March (last week of FY) — better than missing the deduction entirely.
- Q3
Continue holding past 3 years?
Yes — typically. Lock-in expires but selling is taxable. Hold to use tax-loss harvesting (₹1.25L LTCG free per year).
SEBI rules + scheme specifics
- ELSS: SEBI requires 80%+ in equity + 3-yr mandatory lock-in.
- Section 80C deduction: ₹1.5L/yr (only old regime).
- Each SIP instalment has its own 3-year lock-in (rolling lock).
- LTCG on redemption: 12.5% above ₹1.25L exemption.
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