ELSS Full Form: Equity Linked Savings Scheme
ELSS full form is Equity Linked Savings Scheme — a tax-saving equity mutual fund with a 3-year lock-in, eligible for Section 80C deduction up to ₹1.5 lakh.
What is ELSS?
An Equity Linked Savings Scheme (ELSS) is a diversified equity mutual fund that qualifies for a Section 80C deduction of up to ₹1.5 lakh. It has the shortest lock-in among 80C options — just 3 years — and invests predominantly in stocks.
Why ELSS matters
ELSS combines tax saving with equity growth. Compared with other 80C options (PPF: 15-year lock-in, tax-saving FD: 5 years), ELSS offers the shortest lock-in and the highest long-term return potential — though with market risk.
Example
Investing ₹1.5 lakh a year in an ELSS fund saves up to ₹46,800 in tax (30% bracket) while the money is locked for only 3 years and stays invested in equities for growth.
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Frequently asked questions
What is ELSS full form?
ELSS stands for Equity Linked Savings Scheme, a tax-saving equity mutual fund eligible for Section 80C with a 3-year lock-in.
What is the ELSS lock-in period?
ELSS has a 3-year lock-in from the date of each investment — the shortest among all Section 80C instruments. For SIPs, each instalment is locked for 3 years from its own date.
Is ELSS return taxable?
Yes. Gains are long-term capital gains (held over a year). LTCG on equity above ₹1.25 lakh a year is taxed at 12.5% (post-Budget 2024 rate).