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These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961. E.g. PF, PPF, LIC, ULIPS, Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits.

Equity Linked Saving Schemes (ELSS): ELSS (Equity Linked Saving Schemes) is a mutual fund similar to any diversified equity mutual fund that routes your investmentsinto equity markets. However, it stands apart from a regular mutual fund in one major way. ELSS (Equity Linked Saving Schemes) carries a tax benefit on the amount invested, and therefore you have to lock-in your investment in an ELSS for three years.

As the name of the scheme very clearly suggests, it is a tax saving scheme that’s linked to equity. These schemes are growth oriented and invest pre-dominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme.Few most important features of Equity Linked Saving Schemes (ELSS).


Features of ELSS (Equity Linked Saving Schemes):
  • Proxy route to directstock investments
  • Lock-in feature provideslong-term investing discipline
  • Provides tax saving benefits and the potential for higher returns
  • Flexibility to investsmall amounts through an SIP (SYSTEMATIC INVESTMENT PLAN)who can buy? Section 80C of the Income Tax Act providestax benefitsto a person who buys units of ELSS, either in his own name or jointly. Individuals,what is the minimum & maximum amount of investment? Investments can be made through a systematic investment plan (SIP) or lump sum.