ELSS Calculator
Calculate tax-saving mutual fund returns
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About ELSS Calculator - Tax Saving Mutual Fund
ELSS (Equity Linked Savings Scheme) is a tax-saving mutual fund that invests primarily in equity and equity-related securities. It offers tax deduction up to ₹1.5 lakhs under Section 80C with the shortest lock-in period of just 3 years among all 80C investment options. ELSS has the potential for higher returns compared to traditional tax-saving instruments like PPF, NSC, and tax-saving FDs, but comes with market risk.
How ELSS Works
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Invest via SIP (monthly) or lumpsum
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Minimum investment: ₹500, No maximum limit
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80% invested in equity, 20% in debt/cash
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3-year lock-in period (can't withdraw)
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Expected returns: 10-15% annually (market-linked)
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Tax deduction: ₹1.5 lakhs under Section 80C
Example:
Invest ₹5,000/month for 10 years at 12% returns - Invested: ₹6 lakhs, Returns: ₹5.5 lakhs, Total: ₹11.5 lakhs! Plus save ₹46,800 in tax every year.
Key Benefits
Shortest Lock-in: 3 years vs 5 years (NSC), 15 years (PPF)
High Return Potential: 10-15% vs 7-8% in FD/PPF
Tax Benefits: Save up to ₹46,800 tax yearly (at 30% slab)
Wealth Creation: Equity exposure for long-term growth
SIP Option: Invest small amounts monthly
LTCG Tax: Only 10% on gains above ₹1 lakh (vs 30% salary tax)
Frequently Asked Questions
What is ELSS and how is it different from regular mutual funds?
ELSS is a tax-saving mutual fund with 3-year lock-in. Regular mutual funds have no lock-in. ELSS invests in equity (80%+) and offers tax deduction under Section 80C. Returns are market-linked in both.
Can I withdraw ELSS before 3 years?
No, ELSS has mandatory 3-year lock-in. You cannot withdraw or redeem units before 3 years, even in emergencies. After 3 years, you're free to redeem anytime.
Is ELSS better than PPF for tax saving?
For long-term wealth: Yes (higher returns, equity growth). For safety: No (PPF is risk-free). ELSS: 10-15% returns but risky. PPF: 7.1% returns but safe. Choose based on risk appetite.
How much tax can I save with ELSS?
₹1.5 lakh investment = ₹46,800 tax saved (30% slab + cess), ₹31,200 (20% slab), ₹15,600 (10% slab). This is deduction amount - actual tax saved depends on your tax slab.
What are the tax implications on ELSS returns?
LTCG (Long Term Capital Gains): 10% tax on gains above ₹1 lakh per year. Dividends: Taxed as per your slab. No TDS deducted. Tax applies only when you redeem after 3 years.
Should I invest lumpsum or SIP in ELSS?
SIP is better: Rupee cost averaging, Lower risk, Disciplined investing, Suitable for salaried. Lumpsum: Only if you have surplus and market is down. For most people, monthly SIP is recommended.
What is the minimum investment in ELSS?
Minimum varies by fund: SIP: ₹500/month, Lumpsum: ₹500-5,000 depending on fund. No maximum limit. To maximize 80C benefit, invest ₹12,500/month (₹1.5L yearly).
Can I have multiple ELSS funds?
Yes, you can invest in multiple ELSS funds. However, the total 80C deduction limit is ₹1.5 lakhs across all investments (ELSS, PPF, LIC, NSC, etc. combined).
Do I get dividend in ELSS?
ELSS funds offer Growth option (recommended) and Dividend option. Growth: Returns reinvested, better for wealth creation. Dividend: Periodic payouts, taxable as per your slab. Growth option gives better long-term returns.
What happens after 3-year lock-in?
You can: 1) Redeem (withdraw) partially/fully, 2) Stay invested (recommended for better returns), 3) Do SWP (Systematic Withdrawal). No automatic redemption - you stay invested until you actively redeem.
Is ELSS safe for beginners?
ELSS has market risk - value can go down. But for tax saving: Yes, it's good (shortest lock-in). Start with small monthly SIP (₹2,000-5,000). Don't invest lumpsum if new to markets. Always invest for 5+ years for better returns.
Can NRIs invest in ELSS?
Yes, NRIs can invest in ELSS on repatriable basis. However, NRIs cannot claim 80C tax deduction in India (they're not liable to pay Indian income tax). ELSS is just a regular equity fund for NRIs.