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ELSS funds post DTC

You can claim tax deductions on investments in ELSS funds up to March 31, 2012

I have been regularly investing in ELSS funds for the past few years. Now with the new DTC coming from April 1, 2012, there will be no tax breaks in ELSS funds. I want to know what the future of these funds will be. Should I redeem my existing holdings in these funds before that date? Since I am locked in, I may be able to withdraw only part of my funds. What happens to the remaining amount? Will it be taxed on withdrawal?
- Nidhi Rastogi

The new Direct Tax Code (DTC) will only be applicable to fresh investments made from April 1, 2012, not on existing investments. Any investments up to March 31, 2012, in ELSS funds will allow you to claim tax deduction for that financial year. However, you have to remain locked in for three years for availing tax benefit on you investment.

This article was originally published on September 30, 2010.

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