Tax planning is an essential aspect of financial management, and Equity Linked Savings Schemes (ELSS) offer a dual benefit: tax savings and potential wealth growth. ELSS are mutual fund schemes that invest primarily in equities, providing investors with an opportunity to earn market-linked returns while also availing tax deductions. In this post, we’ll delve into the features and benefits of ELSS, helping you understand why they might be an excellent addition to your investment portfolio.

What is ELSS?

Equity Linked Savings Schemes (ELSS) are a type of mutual fund that invests predominantly in equity shares. What sets ELSS apart from other mutual funds is its tax-saving feature under Section 80C of the Income Tax Act, 1961. An investment in ELSS allows individuals and Hindu Undivided Families (HUFs) to claim a tax deduction of up to ₹1.5 lakhs in a financial year.