Educational Purpose Only: Tax savings are estimated at 30% slab assuming maximum benefit. Actual tax savings depend on your tax bracket.
ELSS has a mandatory 3-year lock-in period.
What is ELSS?
Equity Linked Savings Scheme (ELSS) is a category of mutual fund that invests primarily in equities and qualifies for a tax deduction of up to ₹1,50,000 per year under Section 80C of the Income Tax Act. It has the shortest lock-in period among all 80C instruments — just 3 years — making it popular among investors who want both wealth creation and tax savings.
Because ELSS is equity-oriented, it carries market risk. However, historically, equity mutual funds have delivered 12–15% CAGR over long periods, significantly outperforming PPF, NSC, and fixed deposits — all of which also qualify for 80C but offer lower, fixed returns.
How is the tax saving calculated?
The tax benefit is based on your annual investment capped at ₹1,50,000. If you are in the 30% tax bracket, you save 30% of ₹1,50,000 = ₹45,000 per year. This calculator uses the 30% slab as a benchmark. Your actual saving depends on which tax slab you fall in — 5%, 10%, 15%, 20%, or 30%. Note: ELSS tax benefits apply only under the Old Tax Regime; under the New Tax Regime, Section 80C deductions are not available.
Frequently Asked Questions
What is the lock-in period for ELSS?
ELSS has a mandatory lock-in period of 3 years — the shortest among all Section 80C tax-saving instruments. Each SIP instalment is locked in for 3 years from its investment date, so if you invest monthly via SIP, each instalment unlocks 3 years after it was invested, not all at once.
How much tax can I save with ELSS?
ELSS investments qualify for deduction under Section 80C up to ₹1,50,000 per year. The actual tax savings depend on your income tax slab. At 30% slab, you save ₹46,800 (including 4% cess) annually. At 20% slab, you save ₹31,200. Note that the tax benefit applies only under the Old Tax Regime.
Is ELSS better than PPF for tax saving?
ELSS and PPF serve different investor profiles. ELSS is market-linked with higher return potential (historically 12–15% CAGR) but with market risk and a 3-year lock-in. PPF offers guaranteed, tax-free returns (currently 7.1%) with a 15-year lock-in. For long-term wealth creation with tax savings, ELSS often outperforms, but PPF is safer.
Are ELSS returns taxed?
Gains from ELSS after the 3-year lock-in are taxed as Long-Term Capital Gains (LTCG). Gains up to ₹1 lakh per financial year are exempt from tax. Gains above ₹1 lakh are taxed at 10% without indexation benefit.
Related Calculators
This calculator is for educational and illustrative purposes only. Mutual fund investments are subject to market risks. Tax rules are subject to change. Consult a qualified tax or financial advisor before making investment decisions.
About ELSS Calculator
Estimate ELSS mutual fund returns and tax savings under Section 80C with a 3-year lock-in period. See your maturity value and how much income tax you can save through ELSS investments. This tool is designed to be simple and accessible for users who need quick, reliable results.
When to use this tool
Use the elss calculator when you need an accurate, immediate calculation without installing software or registering an account. It is especially useful for everyday decisions, quick comparisons, and planning where you need numbers fast.
How it works
The calculator applies standard, well-known formulas and conventions appropriate to the domain. Results are computed instantly in your browser to preserve privacy and avoid sending personal data to servers.
Limitations and tips
This tool provides informative estimates and is not a substitute for professional advice. For complex or high-stakes decisions, verify results with a qualified professional. Double-check inputs such as units, dates, and currency settings before making decisions.