Question 1

What is the lock-in period for ELSS?

Accepted Answer

ELSS has a mandatory lock-in period of 3 years — the shortest among all Section 80C tax-saving options. PPF locks in for 15 years and NPS until age 60. Each SIP installment in ELSS has its own 3-year lock-in from the date of investment.

Question 2

How much tax can I save with ELSS?

Accepted Answer

Investing up to ₹1,50,000 in ELSS qualifies for Section 80C deduction. At 30% tax bracket, this saves ₹46,800 (including 4% cess) in taxes. At 20% bracket, savings are ₹31,200. At 5% bracket, savings are ₹7,800.

Question 3

Is ELSS better than PPF for tax saving?

Accepted Answer

ELSS offers higher potential returns (12-15% vs PPF's 7.1%) and shorter lock-in (3 years vs 15 years), but carries market risk since ELSS is equity-linked. PPF is risk-free with guaranteed returns but ties up money for 15 years. ELSS suits investors comfortable with market risk and shorter horizons.

Question 4

How is ELSS taxed at maturity?

Accepted Answer

Gains from ELSS are treated as Long Term Capital Gains (LTCG) since the 3-year holding period exceeds the 1-year LTCG threshold. LTCG above ₹1,00,000 in a financial year is taxed at 10% (plus cess). Gains up to ₹1 lakh per year are tax-free.

Question 5

Can I withdraw ELSS before 3 years?

Accepted Answer

No, ELSS has a strict 3-year lock-in with no premature withdrawal option, unlike PPF which allows partial withdrawal after 7 years. Each SIP installment is locked for 3 years from its own investment date, not from the first installment.

Question 6

ELSS SIP or lumpsum — which is better?

Accepted Answer

SIP is generally recommended for ELSS as it averages out market volatility and matches monthly income. However, if investing near the financial year-end (January-March) to complete your 80C limit, lumpsum is common since there is limited time left in the tax year.

Year	Invested	Value	Status
1	₹1,50,000	₹1,60,117	🔒 Locked
2	₹3,00,000	₹3,40,540	🔒 Locked
3	₹4,50,000	₹5,43,846	✅ Withdrawable
4	₹6,00,000	₹7,72,935	✅ Withdrawable
5	₹7,50,000	₹10,31,080	✅ Withdrawable
6	₹9,00,000	₹13,21,963	✅ Withdrawable
7	₹10,50,000	₹16,49,737	✅ Withdrawable
8	₹12,00,000	₹20,19,082	✅ Withdrawable
9	₹13,50,000	₹24,35,269	✅ Withdrawable
10	₹15,00,000	₹29,04,238	✅ Withdrawable

Factor	ELSS	PPF	NPS
Lock-in	3 years	15 years	Till 60
Returns	12–15%	7.1%	10–12%
Risk	Market-linked	Zero	Market-linked
Tax on maturity	10% LTCG	Tax-free	Partial
Extra 80C limit	No	No	+₹50K (80CCD1B)

ELSS Calculator

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Year-by-year breakdown

ELSS vs PPF vs NPS — tax saving comparison

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