ELSS Calculator
Calculate returns on Equity Linked Savings Scheme investments with tax benefits under Section 80C
Calculate Your ELSS Returns
Choose between regular SIP or one-time lumpsum investment
Select what you want to calculate
Amount to invest at regular intervals
How often you'll make the investment
Expected annual return rate (typically 12-16% for ELSS)
Investment period (minimum 3 years lock-in for ELSS)
When you plan to start investing
ELSS Key Features
Lock-in Period
3 years (shortest among tax-saving options)
Tax Benefit
Up to ₹1.5 lakh deduction under Section 80C
Capital Gains Tax
10% tax on gains above ₹1 lakh per year
ELSS Investment Results
| Final Balance | ₹23,69,135 |
| Monthly Investment | ₹10,000 |
| Total Investment | ₹12,00,000 |
| Total Returns (Before Tax) | ₹11,69,135 |
| Tax Savings (Section 80C) | ₹45,000 |
| Taxable Capital Gains | ₹10,69,135 |
| Tax on Capital Gains (10%) | ₹1,06,913 |
| Net Returns (After Tax) | ₹10,62,221 |
| Number of Payments | 120 |
| End Date | August 29, 2035 |
Investment Performance
Expected CAGR
12.5%
Total Return %
97.4%
Effective Tax Rate
9.1%
Net Return Multiple
1.97x
Yearly Investment Breakdown
| Year | Investment | Balance | Returns |
|---|---|---|---|
| 2025 | ₹1,20,000 | ₹1,27,119 | ₹7,119 |
| 2026 | ₹2,40,000 | ₹2,71,071 | ₹31,071 |
| 2027 | ₹3,60,000 | ₹4,34,085 | ₹74,085 |
| 2028 | ₹4,80,000 | ₹6,18,684 | ₹1,38,684 |
| 2029 | ₹6,00,000 | ₹8,27,727 | ₹2,27,727 |
| 2030 | ₹7,20,000 | ₹10,64,451 | ₹3,44,451 |
| 2031 | ₹8,40,000 | ₹13,32,521 | ₹4,92,521 |
| 2032 | ₹9,60,000 | ₹16,36,088 | ₹6,76,088 |
| 2033 | ₹10,80,000 | ₹19,79,851 | ₹8,99,851 |
| 2034 | ₹12,00,000 | ₹23,69,135 | ₹11,69,135 |
Projected values based on expected return rate of 12.5%
ELSS Benefits
Shortest lock-in period (3 years) among tax-saving options
Tax deduction up to ₹1.5 lakh under Section 80C
Higher potential returns (12-16% annually)
Open to NRI investments
No upper investment limit
Tax Information
Section 80C Benefit
• Deduction up to ₹1.5 lakh
• Saves 30% tax (₹45,000 max)
• Available from first year
Capital Gains Tax
• First ₹1 lakh gains tax-free
• 10% tax on gains above ₹1 lakh
• Calculated per financial year
ELSS vs Other Tax-Saving Options
| Option | Lock-in | Returns |
|---|---|---|
| ELSS | 3 years | 12-16% |
| PPF | 15 years | 7.1% |
| Tax-saving FD | 5 years | 5-6% |
| NSC | 5 years | 6.8% |
Understanding ELSS (Equity Linked Savings Scheme)
What are ELSS Funds?
ELSS (Equity Linked Savings Scheme) are tax-saving mutual funds that primarily invest in equity and equity-related instruments. They offer the dual benefit of tax savings under Section 80C and potential for higher returns through equity market exposure. ELSS funds invest at least 80% of their corpus in equity and equity-related securities, making them suitable for long-term wealth creation.
Key Features
- •Lock-in Period: 3 years from each investment date (shortest among 80C options)
- •Tax Benefit: Deduction up to ₹1.5 lakh under Section 80C of Income Tax Act
- •Investment Options: SIP (Systematic Investment Plan) or Lumpsum
- •Market Risk: Returns subject to market fluctuations (high risk, high return)
- •Dividend Option: Available in both Growth and Dividend options
How ELSS Calculator Works
SIP Formula:
FV = PMT × (((1 + r)^n - 1) / r)
FV = Future Value
PMT = Periodic Payment
r = Periodic Interest Rate
n = Number of Payments
Lumpsum Formula:
FV = PV × (1 + r)^n
FV = Future Value
PV = Present Value (Investment)
r = Monthly Return Rate
n = Number of Months
Tax Calculations
Section 80C Savings: Investment × Tax Rate (30%)
Capital Gains Tax: (Gains - ₹1 lakh) × 10%
Net Returns: Total Returns - Capital Gains Tax
Why Invest in ELSS?
Tax Efficiency
Save up to ₹46,800 annually on taxes (at 30% tax bracket) through Section 80C deductions. Long-term capital gains up to ₹1 lakh per year are tax-free, making ELSS highly tax-efficient.
Wealth Creation
Historical returns of 12-16% annually outperform traditional tax-saving instruments like PPF, NSC, and tax-saving FDs. Ideal for long-term wealth accumulation and beating inflation.
Shortest Lock-in
3-year lock-in period is the shortest among all Section 80C investment options. Unlike PPF (15 years) or NSC (5 years), you get your money back faster while still enjoying tax benefits.
Flexibility
Start with as low as ₹500 per month through SIP. No upper limit on investment (though only ₹1.5 lakh qualifies for tax deduction). Switch between funds or add investments anytime.
Who Should Invest in ELSS?
Salaried Individuals
Looking to reduce tax liability while building wealth for long-term financial goals like retirement, children's education, or buying a house.
Risk-Takers
Investors comfortable with market volatility and seeking higher returns than traditional fixed-income instruments. Suitable for those with 5+ year investment horizon.
First-time Investors
New to equity markets but want to start with a disciplined approach through SIP. ELSS provides a structured entry into equity investing with tax benefits.
High Tax Bracket Individuals
Those in 20-30% tax brackets who want to maximize tax savings while investing in equity markets. Can save significant tax amount annually through ELSS investments.
ELSS Investment Strategies
SIP Strategy (Recommended)
Invest a fixed amount monthly through SIP to benefit from rupee cost averaging. This reduces the impact of market volatility and builds discipline in investing.
- • Minimizes timing risk
- • Spreads investment over time
- • Suitable for all market conditions
- • Builds long-term investing habit
Lumpsum Strategy
Invest entire amount at once, typically when markets are down or you have surplus funds. Suitable for experienced investors who can time the market.
- • Maximizes gains in bull markets
- • Requires market knowledge
- • Suitable for large windfalls
- • Higher risk, higher potential return
Frequently Asked Questions (FAQs)
1. What is ELSS and how does it work?
ELSS (Equity Linked Savings Scheme) is a type of mutual fund that invests primarily in equity markets and offers tax benefits under Section 80C. It combines wealth creation through equity investments with tax savings, featuring a mandatory 3-year lock-in period. At least 80% of the fund's portfolio is invested in equity and equity-related instruments.
2. How much tax can I save by investing in ELSS?
You can claim a deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. For someone in the 30% tax bracket, this translates to a tax saving of ₹46,800 per year (including cess). Additionally, long-term capital gains up to ₹1 lakh per financial year are tax-free, and gains above ₹1 lakh are taxed at 10% without indexation benefit.
3. What is the minimum investment amount for ELSS?
Most ELSS funds allow you to start with as low as ₹500 per month through SIP (Systematic Investment Plan). For lumpsum investments, the minimum amount typically ranges from ₹500 to ₹5,000 depending on the fund house. There is no upper limit on investment, though only ₹1.5 lakh qualifies for tax deduction under Section 80C.
4. Can I withdraw my ELSS investment before 3 years?
No, ELSS has a mandatory lock-in period of 3 years from the date of each investment. You cannot withdraw, redeem, or switch your investment during this period. This is the shortest lock-in period among all Section 80C investment options. After 3 years, you can redeem your investment partially or fully without any restrictions.
5. What returns can I expect from ELSS funds?
ELSS funds have historically delivered returns in the range of 12-16% annually over the long term (5+ years). However, returns are market-linked and can vary significantly based on market conditions. Past performance is not indicative of future results. It's important to note that ELSS carries higher risk compared to debt instruments like PPF or FD due to equity market exposure.
6. ELSS vs PPF: Which is better for tax saving?
Both offer tax benefits under Section 80C, but they differ significantly:
ELSS
- • 3-year lock-in
- • 12-16% potential returns
- • Market-linked (high risk)
- • Partial withdrawals allowed after 3 years
- • LTCG tax: 10% above ₹1 lakh
PPF
- • 15-year lock-in
- • 7.1% fixed returns
- • Government-backed (low risk)
- • Partial withdrawals from 7th year
- • Tax-free returns
Choose ELSS for higher returns and shorter lock-in; choose PPF for stability and guaranteed returns.
7. Can NRIs invest in ELSS?
Yes, Non-Resident Indians (NRIs) can invest in ELSS funds and claim tax benefits under Section 80C if they have taxable income in India. NRIs need to complete KYC formalities and can invest through repatriable or non-repatriable basis. However, NRIs should consult with a tax advisor regarding their specific tax situation in both India and their country of residence.
8. What happens to my ELSS investment after 3 years?
After the 3-year lock-in period, you have complete flexibility with your investment. You can: (1) Continue holding it to benefit from long-term wealth creation, (2) Redeem partially or fully as per your financial needs, (3) Switch to another fund within the same fund house (if available), or (4) Set up a Systematic Withdrawal Plan (SWP) for regular income. Many investors prefer to stay invested beyond 3 years to maximize returns.
9. How to choose the best ELSS fund?
Consider these factors when selecting an ELSS fund:
- Historical performance over 3, 5, and 10 years
- Consistency of returns across market cycles
- Fund manager's track record and experience
- Expense ratio (lower is better)
- Assets Under Management (AUM)
- Portfolio composition and diversification
- Fund house reputation and ratings
It's advisable to compare multiple ELSS funds and consult with a financial advisor before investing.
10. Can I invest in multiple ELSS funds?
Yes, you can invest in multiple ELSS funds to diversify your portfolio. However, the total tax deduction under Section 80C is limited to ₹1.5 lakh per financial year across all eligible investments (including ELSS, PPF, life insurance premiums, etc.). Investing in 2-3 ELSS funds from different fund houses can provide better diversification and reduce concentration risk, but ensure you can track and manage all investments effectively.