ELSS Calculator

Equity Linked Savings Scheme (ELSS) is a category of equity mutual funds that offers a tax deduction under Section 80C of the Income Tax Act, up to ₹1.5 lakh per financial year. ELSS funds invest predominantly in equities, which makes them higher-risk and higher-return than other 80C instruments like PPF or tax-saving FDs.

The defining feature: each ELSS investment is locked in for 3 years from the date of purchase - the SHORTEST lock-in among 80C options. That makes ELSS attractive for tax-savers who don't want their capital tied up for a decade or more.

The 3-year lock-in applies to each individual instalment, not the scheme as a whole. So if you start a ₹5,000 monthly SIP in April 2024:

• The April 2024 contribution unlocks in April 2027.
• The May 2024 contribution unlocks in May 2027.
• ... and so on, instalment by instalment.

This is why a 5-year ELSS SIP isn't fully redeemable until the 8th year from start - the last instalment also needs its own 3-year window.

Section 80C of the Income Tax Act allows a maximum deduction of ₹1.5 lakh per financial year from your gross taxable income, across a basket of eligible instruments (ELSS, PPF, EPF, life insurance premiums, tuition fees, principal repayment of home loans, NSC, tax-saving FDs, and more).

The tax you save equals your 80C contribution × your marginal tax rate. At the 30% slab, investing the full ₹1.5 lakh saves ₹45,000 in tax in that financial year - that's the saving we tally up over the SIP period.

Annual tax saving = min(annual_contribution, ₹1,50,000) × slab_rate

• vs PPF: ELSS lock-in is 3 years (PPF is 15). ELSS returns are market-linked and can be higher; PPF returns are guaranteed but capped at ~7%.
• vs Tax-saving FD: ELSS has shorter lock-in (3 vs 5 years) and historically delivers higher returns at the cost of equity volatility.
• vs NPS: NPS has an extra ₹50,000 deduction under 80CCD(1B) on top of 80C, but locks in money till age 60.
• vs Life insurance: ELSS is pure investment - no insurance bundled. Buy term insurance separately for cover.

On redemption (after the 3-year lock-in), gains qualify as Long-Term Capital Gains. LTCG up to ₹1 lakh per financial year is exempt; gains above that are taxed at 10% (without indexation). Plan redemptions across financial years to make the most of the ₹1 lakh annual exemption.