(Last Updated: May 16, 2019)

What is full form of ELSS? Meaning

  • The full form of ELSS is Equity linked saving schemes. ELSS scheme are basically diversified mutual fund schemes which enjoy tax benefits under Section 80C of The Income tax Act. They are a great savings instrument to grow your money faster than fixed deposits or PFs.

    These schemes are called Equity linked as the mutual fund schemes invest in majority equities. Most of the ELSS( Equity linked saving schemes ) are diversified mutual fund schemes which mean they invest across all classes of the equity of large-cap, mid-cap, and small caps.

    ELSS schemes are also called tax saving mutual funds because they are eligible for section 80C benefits as well.
    What do you think of ELSS? Is it a good investment option? You can share your views on the same.

  • @Ishu Hi, thanks for sharing full form of ELSS i.e. Equity Linked Savings Scheme. ELSS used to be a good long term investment option in India. Is it still so?

    The lock-in period is 3 years only. But, I think few things have changed .

    The maximum tax deduction of 80C is Rs.1.5 lakhs only. So, if one invests in PPF, ELSS both the total amount that can be claimed including both these investment options can't exceed Rs.1.5 lakhs. This seems a bit less to me. If this limit is raised, we can save more taxes.

    Moreover, the overall tax benefit on ELSS seems to have reduced since this is an equity linked saving scheme. With re-introduction of tax on equity, LTCG shall be applicable @10% on equity mutual funds above Rs.1 lakh that too without any indexation benefit. Hasn't this reduced the attractive tax benefit that ELSS gave earlier?

    ELSS used to be a tax free investment previously, that was its biggest highlight. But, now it is not so.

    Am I right in saying so? What do you think?

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