Why you should choose ELSS?

Equity Linked Savings Schemes (ELSS) is a mutual fund investment that reduces your taxable income by `1,50,000. With a minimum lock-in period of just 3 years, ELSS has the potential to earn higher returns than most other tax-saving options as most of the portfolio is invested in the stock market.

	ELSS	Tax‑saving FD	ULIP	NSC	PPF	EPF
Lock‑in period	3 years	5 years	5 years	5/10 years	15* years	Till termination of employment
Taxation aspect	Dividend tax free in the hands of the investors and Capital Gains taxed at 10%#	Interest is taxable as per IT slab of individual	Maturity/claims proceed are tax free	Interest is taxable as per IT slab of individual	Interest is tax free	Interest is tax free
Returns (p.a.)	Market‑Linked	6%^	Market‑linked	**7.6% (for 5yrs deposit)	7.6%	8.4%

Lock‑in period

Taxation aspect

Returns (p.a.)

*Disclaimer

Source: PPF, NSC data from India post, 5 year Fixed Deposit rate from SBI website (as on 30th Sept'16), EPF rate from EPFO
*Premature closure is not allowed before 15 years. Withdrawal is permissible every year from 7th financial year from the year of opening account.
^Interest rate of SBI 5 year deposit of less than a crore for non-senior citizen. Bank fixed deposit are relatively safer as they are covered under Deposit Insurance and Credit Guarantee Corporation of India to the extent of `1 lakh per account.
**Interest Compounded six monthly but payable at maturity.
^^Taxable if withdrawn before 5 years of continuous service (in case of job change, the investor can transfer account to new employer to maintain continuity).
^#Fund is locked in for 3 years.