Equity-Linked Savings Schemes (ELSS) are diversified equity mutual funds with a mandatory 3-year lock-in and a tax benefit under Section 80C of the Income Tax Act.
About this calculator
Equity-Linked Savings Schemes (ELSS) are diversified equity mutual funds with a mandatory 3-year lock-in and a tax benefit under Section 80C of the Income Tax Act. They are the only mutual-fund category that qualifies for an 80C deduction, and they typically deliver higher long-term returns than rivals like PPF, NSC or tax-saver FDs because they invest predominantly in equities. The trade-off is short-term volatility -- you can see meaningful drawdowns inside the 3-year lock-in.
This calculator does the math two investors usually do separately. First, it projects the maturity value of your monthly SIP using the standard SIP future-value formula, with monthly compounding at your expected return. Second, it computes the income-tax saving on the 80C-eligible portion of your annual contribution at your marginal slab rate. Note the 80C combined ceiling is Rs 1,50,000 across ELSS, EPF, PPF, life insurance premium, principal on home loan, and tuition fees -- the calculator caps the deduction accordingly.
The new tax regime (default for FY 2025-26) does not allow Section 80C deductions, so ELSS in that regime is purely an equity investment with no tax saving. Toggle the regime switch to see the impact. If you are in the old regime, the after-tax IRR of ELSS materially beats PPF for most investors with a 5+ year horizon, and dramatically beats tax-saver FDs whose interest is fully taxable. To compare across choices, use the [[ppf]] calculator for guaranteed returns, the [[fd]] calculator for short-term safety, the [[mutual-fund]] calculator for non-tax-saving equity funds, and the [[income-tax]] calculator to verify your marginal slab.
Common uses
- Choosing how much of your annual 80C limit to allocate to equity vs PPF/EPF
- Comparing ELSS lifetime returns against tax-saver FDs and NSC
- Planning a salary-linked monthly SIP that exhausts the 1.5 lakh deduction
- Year-end tax planning if you have not yet used your full 80C quota
- Switching from old to new regime: quantifying what you give up
Frequently asked questions
Is ELSS better than PPF for tax saving?
Over a 7+ year horizon ELSS has historically returned 11-13% pre-tax versus PPF
Does the 3-year lock-in apply to the whole investment or each SIP?
Each SIP installment has its own 3-year lock-in starting from its purchase date. So your January 2026 SIP is locked till January 2029, the February SIP till February 2029, and so on. You cannot redeem the full corpus at year 3 -- only the units that have completed their lock-in.
How much tax do I save with ELSS?
Up to your marginal slab rate × the lower of (your annual ELSS contribution, 1,50,000). For a 30% slab taxpayer fully utilising the limit, that is Rs 46,800 saved per year (including 4% cess), repeated for every year you contribute.
What is the tax on ELSS gains at maturity?
Gains above Rs 1 lakh per financial year are taxed as LTCG at 12.5% (FY 2024-25 onwards). Below that threshold, gains are exempt. Because of the lock-in, all redemptions are by definition long-term, so STCG of 20% never applies.
Can I claim ELSS deduction in the new tax regime?
No -- the new regime removes most deductions including Section 80C. ELSS still works as an equity investment, but you would not get any extra tax saving on top of the lower slab rates of the new regime.