ELSS funds – Invest In ELSS mutual funds online

Mutual funds are a sought-after investment avenue for new and expert investors alike. It offers several benefits such as professional management, diversification and higher returns compared to traditional investments. Equity-Linked Savings Scheme (ELSS) are mutual fund tax saver schemes that can help build wealth and save tax at the same time.

The article looks at the features of ELSS mutual funds and how to invest in them.

Understanding ELSS funds

ELSS funds are tax saving investments with the lowest lock-in period of three years and the potential to offer good returns to investors. They can be well-suited for new investors as they provide a window to equities.

Benefits of investing in ELSS funds

  • Tax-saving

You can get a tax deduction under Section 80C up to Rs.1.5 lakh through ELSS investments. If you are in the 30% tax bracket, you can save up to Rs.46,800 (31.2% of 1.5 lakh).

  • Better post-tax returns

ELSS funds invest almost 80% in equity-oriented instruments, which explains their positive returns. Since 1st April 2018, long-term capital gains on ELSS is now exempt up to Rs.1 lakh. Further, returns beyond Rs.1 lakh is taxable at the rate of 10%. However, despite the introduction of LTCG, ELSS can give better post-tax returns compared to other 80C investments.

For instance, annual returns on fixed deposits are in the range of 6.5% to 8.25%. PPF and NSC offer returns around 8%. On the other hand, ELSS offers returns between 15% and 18%.

  • Lowest lock-in period

As noted earlier, ELSS funds have the lowest lock-in period of three years. A tax-saving fixed deposit and PPF have a lock-in period of five and fifteen years respectively. However, you need not withdraw funds from your ELSS investment after completing three years. You can re-invest in the scheme to utilise the tax-saving option.

How to invest in ELSS

You can invest in ELSS either via a lump sum or Systematic Investment Plans (SIPs). While lump-sum investments involve investing a one-time amount in the mutual fund scheme, SIPs give you the option of investing small amounts steadily. The intervals can be weekly, monthly, quarterly, semi-annually or annually depending on your financial budget.

Utilise online ELSS calculators available to help you decide how much to invest. Or, consider taking the services of a professional finance expert to determine the right amount and tenure.

Once you have decided the mode of investment and the ELSS scheme of your choice, complete the KYC documentation. The process requires the following documents:

  • Passport-sized photograph
  • Proof of address
  • Proof of identity
  • First payment to the ELSS provider as a cheque


ELSS tax saving mutual funds can be an excellent option for a new investor looking to invest in mutual funds online. Not only do they offer the lowest mandatory lock-in period but also provide tax savings up to Rs.1.5 lakh under Section 80C.