I am a 31-year-old salaried person. I have a very simple yet extremely important question. Why should one invest in Equity Linked Savings Scheme (ELSS) which has a lock-in period of three years when I can invest in other mutual fund schemes and get better returns for just more than one year and avail the same tax benefit under Section 80C?
- Sameer
You cannot invest in any other mutual fund schemes and claim a tax deduction under Section 80C. Only Equity Linked Savings Schemes (ELSSs) qualify for a tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. Every tax saving investments comes with a mandatory lock-in period and ELSSs have a the shortest lock-in period (three years) among investments permitted under Section 80C.
This article was originally published on March 14, 2016.
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