I am invested in several ELSS schemes; what is the tax payable on profits earned after a compulsory three-year lock-in?
As of now the profits redeemed after the three-year lock-in period are exempt from taxation. The method followed for taxation of savings as of now is - exempt-exempt-exempt i.e. contributions to specified schemes are exempt from tax (ELSS being one of them), accumulation (earnings on investments) is exempt from tax. Similarly, withdrawals, benefits from these schemes are exempt as well. Therefore, the current tax laws significantly favour investing in ELSS. Firstly, you get tax breaks at the time of investment (subject to the investment limit of Rs 1 lakh). And subsequently, all your capital gains as well as the original amount invested become completely tax-free at the time of withdrawal.
But this may not last for long, as the government have been contemplating the introduction of EET (exempt exempt tax) system, whereby the withdrawals would attract tax.