An Equity-Linked Savings Scheme (ELSS), a tax-saver mutual fund helps you reduce your tax bill under Section 80C 1961. ELSS funds invest primarily in stocks and similar investments. This can mean more money for you in the long run, plus you get tax breaks!
Investing in ELSS funds is not just about saving on taxes. It's a commitment to a disciplined approach towards long-term wealth creation. Unlike traditional tax-saving instruments such as the Public Provident Fund (PPF) or National Savings Certificate (NSC), ELSS has a lock-in period of three years. This means that you cannot redeem your investments before three years from the date of investment, ensuring that your money is working for you in the long run.
Due to their equity exposure, ELSS funds are subject to market risks. Still, they have the potential to offer superior returns over the long term compared to debt-oriented tax-saving instruments. They are popular among investors seeking both tax benefits and growth opportunities in the equity markets.