Calculate ELSS mutual fund returns and tax savings under Section 80C for India 2026.
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Read Guide →ELSS (Equity Linked Savings Scheme) is a mutual fund investing primarily in equities, qualifying for Section 80C deduction up to 1.5 lakh per year. It has the shortest lock-in (3 years) among 80C options and offers potential returns of 10 to 15% CAGR historically.
ELSS has a mandatory 3-year lock-in from each investment date (including each SIP instalment). This is the shortest among 80C options. PPF is 15 years, NSC 5 years, tax-saving FDs 5 years. After 3 years, redeem freely or continue holding.
Depends on risk tolerance. ELSS invests in equities with potential 10 to 15% returns but market risk. PPF gives guaranteed 7.1% with zero risk and tax-free interest. ELSS typically outperforms over 5+ years. Many investors use a mix of both for balance.
ELSS gains are taxed as equity capital gains. Long-term gains (above 1.25 lakh in a year) are taxed at 12.5%. Since the 3-year lock-in ensures all redemptions are long-term, you benefit from the lower LTCG rate and the 1.25 lakh annual exemption.
SIP is recommended for most investors to average out market volatility. Monthly SIP of 12,500 meets the full 1.5 lakh 80C limit. Lump sum works if markets have corrected. Each SIP instalment has its own 3-year lock-in, so plan liquidity accordingly.