6 things you wanted to know about ELSS

What do ELSS schemes invest in?

ELSS invest in a diversified basket of mostly shares and some debt.

What are the risks involved in ELSS?

ELSS invest in shares, and are therefore exposed to market risk.

What is the tax benefit of ELSS?

Investments in ELSS are deductible from taxable income up to Rs 1.5 lakh under section 80C of the Income Tax Act.

Are returns from ELSS tax-free?

You have to pay long term capital gain tax of 10% if returns are over Rs 1 lakh in a year.

What is the lock-in?

Among 80C investments, ELSS has the shortest lock-in of 3 years.

Can one invest in ELSS through SIPs?

Yes, you can invest in ELSS through SIPs. However, you will have to hold the units allocated against each installment for 3 years.