When we talk about Long term wealth creation along with the benefits of tax saving, ELSS are the best tools of investment. According to Section 80c, ELSS Schemes are eligible for income tax deductions.

Normal salaried employees have to submit their Investment proofs in order to save Tax.  In order to fit in the scheme, many people invest in life insurance and things like that. The question is do you really need to buy unwanted policies just for the purpose of fitting in the tax saving schemes?

ELSS Mutual Funds have a lock in period of 3 years and this is the least among all tax saving options available under Section 80c.

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Top performing ELSS funds are:

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ELSS returns are tax free. Along with ELSS only PPF returns are tax free. In all other tax saving options, the returns are taxable based on the investors tax slab.

Although, returns in PPF are tax free, but they come with a lock in period of 15 Years.

Which means – The only Tax saving investment option for a short term are ELSS funds.

Any returns received from equity funds after 1 year is tax free, hence ELSS funds which comes with a 3-year lock-in period, dividends/returns/capital gains from such funds are also tax free.

A Quick overlook of Top ELSS Funds listed by ProsperX.

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Risk Involved: ELSS Funds invest 65 % in Equity. Which means yes, they do have a risk element involved in them. Investors who are willing to take moderate or high risk can consider investing in ELSS Funds.

Also, the past performance of the fund does not indicate its performance to be as good in the future, which means you should invest only if you have the Risk appetite for it.

Points to Remember!

  • Your Lock in period is of 3 years and hence long term capital gains are not applicable.
  • Do not Withdraw all your money as soon as the lock in Period gets over. ELSS are connected to the market and you may have to stay a little longer than your lock in period in order to avail better and decent returns.
  • ELSS are the best funds for long term financial planning.
  • Do not cluster your portfolio with ELSS funds. keep diversity. It is a must!

We at ProsperX wish you the best with your Investments.

ProsperX Editor

Happy Investing!


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