Section 80C of the Income Tax Act allows individuals and Hindu Undivided Families (HUFs) to claim deductions from their taxable income for certain investments and expenses. The maximum deduction allowed under Section 80C is Rs. 1.5 lakhs for the financial year 2022-23.
ELSS are managed by fund managers and hence a safe investment option for tax saving purposes. It also comes under 80C of the Income Tax Act, 1961 and you will get a tax exception of 150000 a year. And it is the only Mutual Fund scheme that is eligible for tax benefits. Investments made in ELSS have a lock-in period of 3 years. The advantage of mutual fund is that as we all know it is invested in a blanched way into the equity markets.
Features of ELSS (Equity-Linked Savings Scheme) Funds
Here are some of the features of ELSS,
- Investment only upto 150000 comes under section 80C
- The long-term capital gain of upto 1 lakh is tax exempt
- The risk involved is still higher compared to a fixed deposit
- These tax-saving investments have a lock-in period of 3 years
- The scheme is open-ended
- SIP is applicable for ELSS as well
80C Tax Saving Investments
Under this section, you can reduce your tax liability every year. According to section 80C these investments are eligible for tax deduction
- Public Provident Fund
- National Savings Certificate
- Post Office Term Deposit
- National Pension System
- Senior Citizen Saving Scheme
- Tax saver Fd
- Unit Linked Insurance Plan
- Sukanya Samridhi Account.
- Employee Provident Fund