Equity linked savings schemes (ELSS) are categorised as one of the investment options you have to include in your deductions under section 80C of the Indian Income-tax Act. Deductions under this section are fully exempt from tax up to an upper limit of Rs1.5 lakh a year. ELSS shares space with other financial allocations in this section, such as your Employees’ Provident Fund contribution, Public Provident Fund investment (PPF), and your life insurance premium.
An ELSS however is more than just a tax-saving investment. It is an equity mutual fund that is structured like any other, with the objective to generate consistent long-term returns by investing a majority of its corpus in equity shares.
Here are the three things you must keep in mind to maximise the efficiency of your ELSS investment.
