What is the full form of ELSS

ELSS: Equity Linked Saving Scheme

ELSS stands for Equity Linked Savings Scheme. It is an open ended Tax saving mutual funds that help you avail tax deductions. It is also known as tax-saving funds. It mainly invests in equities (shares) of the companies listed in the stock exchanges to generate market-linked returns.

These are saving alternatives under section 80C of the income tax act. These are meant to be mutual funds that people invest in throughout the year.

ELSS can be invested using both SIP (Systematic Investment Plan) and lump sums investment options. There is a 3 years lock-in period, and thus has better Liquidity compared to other options like NSC and Public Provident Fund

Advantages of ELSS over other tax saving instruments

Lock in period of an ELSS fund is much lower compared to traditional tax saving instruments like Public Provident Fund (PPF), National Savings Certificate (NSC) and bank fixed deposits
As ELSS is an investment in equity markets and investing in this for a long term can give you better returns compared to other asset classes over the long term.
Good ELSS Funds offer returns in between 10 to 12 percent in the long run, which is highest among the tax-saving instruments.
You can start by investing a small amount as low as Rs. 500.
The investor does not need to have the knowledge of the stock markets as the funds are managed by financial experts and fund houses on their behalf.