By continuing, you agree to LoansJagat's Credit Report Terms of Use, Terms and Conditions, Privacy Policy, and authorize contact via Call, SMS, Email, or WhatsApp
Disclaimer: The information published on LoansJagat is intended for general informational and educational purposes only and should not be considered financial, legal, or investment advice. Interest rates, loan terms, statistics, and other data may change over time and may vary by lender or source. Please verify the latest information and consult a qualified financial advisor or the respective Bank/NBFC before making any financial decisions.
Apply for Loans Fast and Hassle-Free
Subscribe Now
About the author
LoansJagat Team
‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.
Related Blog Post
Simplify All Your Loans Into One Affordable EMI
Customers Served
Debt Consolidated
1200+ Reviews
Locations in India
Club all Loans & Credit Card Bills into Single EMI
Quick Apply Loan
Consolidate your debts into one easy EMI.
Takes less than 2 minutes. No paperwork.
10 Lakhs+
Trusted Customers
2000 Cr+
Loans Disbursed
4.7/5
Google Reviews
50+
Banks & NBFCs Offers
Other services mentioned in this article
Key Takeaways
Bonus Tip: Even if you don’t use the full ₹1,50,000 deduction under 80C, run an ELSS scheme tax benefit calculator to check. Investing just what you need this year can cut tax now and still leave room for extras without over-committing your cash.
An ELSS fund is not just a savings too; it’s a long-term equity instrument that doubles up for tax savings. When Dr. Chirag used an ELSS calculator, he saw that investing ₹1,50,000 reduced his tax liability significantly. Over the years, ELSS has given potential equity-market returns while offering tax breaks under 80C.
Ever wondered if you could tell the taxman: “Not today, buddy”? With ELSS, you can. Invest smart, save tax now, and watch your money ride the equity waves for long-term growth. Think of ELSS as a tax-saving time capsule. You lock your money for 3 years, get a tax break now, and after the lock-in, unlock potential growth in equities. It is like planting a seed now and harvesting later.
Dr. Chirag Singh, a professor at a Chandigarh college, always joked that his salary and his research papers were locked for 3 years. But then, he discovered something better. He chanced upon the ELSS scheme and realised it’s a legitimate path to save tax and grow money. By investing monthly in ELSS, his taxable income went down, and he also positioned for growth.
Read More – PPF Tax Benefit – Complete Guide to Save Tax & Grow Savings
Dr. Chirag invested ₹1,00,000 in ELSS in April 2023. Using an ELSS calculator, he saw his taxable income drop. When he redeems after three years, thanks to equity growth, his gains are substantial, while his original tax benefit stays intact.
If you think tax-saving is boring, wait till you see how ELSS turns it into a wealth-building cheat code
Here’s a breakdown of the main benefits, along with a few extra perks you might not always read about.
From the above-mentioned benefits you can see the tax benefits of the ELSS scheme.
Before you invest in ELSS, you must fulfil a few basic criteria and follow standard mutual fund regulations. Dr. Chirag did the same when he first invested.
*T&C Apply
To claim a tax benefit under 80C, you must follow the Old Tax Regime (deductions not available under the New Regime).
For typical salaried Indian citizens (like Dr. Chirag) who meet KYC norms and are okay with a 3-year lock-in, ELSS offers one of the easiest and most efficient ways to claim tax benefits while staying invested for long-term gains.
To invest in ELSS and claim the ELSS scheme tax benefit, you must complete KYC and provide a few essential documents. These ensure identity verification, address confirmation, and eligibility for tax deductions under Section 80C.
These documents complete your KYC and ensure your ELSS investments are valid, compliant, and eligible for tax deductions. With proper documentation, claiming many tax benefits on ELSS becomes effortless each financial year.
Also Read – EPF Benefits – Complete Guide to Savings & Retirement Perks
Can ELSS be used to reduce my taxable income under Section 80C?
Yes, investments in ELSS allow deductions up to ₹1,50,000, reducing taxable income in the year of investment.
For tax-saving purposes, is it wise to put the entire 1.5 lakh in ELSS? Also, is there any benefit in investing in multiple ELSS rather than just one ELSS scheme?
You can invest in two ELSS for diversification, and there is no problem in investing the entire 1.5 lakh in ELSS. But if you don’t want to invest the entire amount, then switch to NPS, which has retirement benefits and extra tax benefits too.
What are the tax benefits of investing in Equity Linked Savings Schemes (ELSS)?
ELSS offers ₹1.5 lakh tax deduction under Section 80C, LTCG tax benefits: gains up to ₹1 lakh are tax-free; above ₹1 lakh taxed at 10%, 3-year lock-in, the shortest among tax-saving options. It’s a tax-efficient way to save and build wealth.
If I shift to the new tax regime, can I still benefit from investing in ELSS?
Yes, even under the new regime, ELSS remains a solid long-term investment for equity growth; while 80C deduction may not apply, the potential for compounding and wealth creation still makes it a smart move.
How risky is ELSS compared to other 80C instruments like PPF or NSC?
ELSS involves equity market risks, hence returns fluctuate. But because it’s diversified and has a 3-year lock-in, the risk somewhat moderates over time. A long-term horizon helps mitigate volatility.
Is ELSS taxable after 3 years?
After 3 years, your gains are treated as Long-Term Capital Gains (LTCG). Gains up to ₹1 lakh (or applicable threshold) can be tax-free; excess taxed as per the prevailing LTCG rate.
Do I need to invest every year in ELSS for tax benefits?
You don’t have to invest every year. But to claim the full benefit (₹1.5 lakh deduction) every year, you must invest each year. You can choose a lump sum or SIP. If you skip a year, the deduction simply won’t apply.
How much tax benefit on ELSS can I get?
If you invest ₹1,50,000, the maximum 80C limit, and you reduce your gross taxable income by that amount, which can translate to significant tax savings depending on your slab. Then, after 3 years, LTCG on gains (above threshold) applies, so it’s a tax-benefit + investment combo.
