Equity-linked savings scheme (ELSS)

ELSS or equity-linked savings schemes are equity funds which are designed to offer tax benefits under section 80C of the Income Tax Act. ELSS provides you with high returns compared to fixed deposits and public provident funds because they primarily invest in equity. They come with a low lock-in period of 3 years compared to other tax-saver investments. The three-year lock-in period qualifies for a tax exemption under section 80C of the Income Tax Act which allows maximum tax exemption of ₹. 1,50,000. ELSS offers returns between 12-18% compared to other tax saver investments, however, the returns are subject to long-term capital gains tax at 10%.