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Why ELSS

Why is ELSS the best tax‑saving investment for you?

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.

See how ELSS compares with other tax-saving instruments:

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 & capital gains are tax‑free Interest is taxable as per your IT slab Maturity/claims proceed are tax‑free Interest is taxable as per your tax‑slab Interest is tax‑free Interest is tax‑free^^

Returns (p.a.)

 Market‑linked# 7%^ Market‑linked 8.5% & 8.8%**
For FY 2014‑15		 8.7%*
For FY 2014‑15		 8.75%
For FY 2014‑15

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^^Taxable if withdrawn before 5 years of continuous service (in case of job change, the investor can transfer account to new employer to maintain continuity).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.

Mutual fund investments are subject to market risks, read all scheme related documents carefully. © 2018 IDFC Mutual Fund