Frequently Asked Questions
How much tax can I save with ELSS SIP?
ELSS investments up to ₹1.5 lakh/year qualify for Section 80C deduction. At 30% tax bracket + 4% cess, you save ₹46,800 in taxes. That's ₹12,500/month SIP giving you dual benefit: tax savings + wealth creation.
What is the lock-in period for ELSS?
ELSS has the shortest lock-in among 80C investments - just 3 years. Compare: PPF (15 years), NSC (5 years), Tax-saving FD (5 years). Each SIP installment has its own 3-year lock-in from the date of investment.
Is ELSS better than PPF for tax saving?
For returns: ELSS wins (10-14% vs 7.1%). For safety: PPF wins (guaranteed returns). For flexibility: ELSS wins (3-year vs 15-year lock-in). Best strategy: Use both - PPF for safety net, ELSS for growth.
How much ELSS SIP should I start for tax saving?
To claim full ₹1.5 lakh 80C deduction via ELSS alone, invest ₹12,500/month. If you have other 80C investments (EPF, LIC), calculate remaining limit and invest accordingly. Even ₹5,000/month (₹60,000/year) helps.
Is ELSS return taxable?
Yes, ELSS gains are taxable. Long-term capital gains (LTCG) above ₹1.25 lakh/year are taxed at 12.5%. For large corpus, redeem gradually across financial years to utilize the annual exemption limit efficiently.