What is Difference Between ELSS & Other Funds?

What is the Difference Between ELSS & Other Funds?

ELSS means Equity Linked Savings Scheme. ELSS Mutual Funds are also known as Tax Saving mutual funds means it comes under Section 80c. It means that Up to 1 Lakh invested in ELSS is totally Tax-free. In fact, up to 1 lakh invested in any financial product that comes under Section 80c is a tax free.

The another difference is that, ELSS mutual funds have a lock-in period of 3 Years. While the regular Equity funds don’t have any lock-in period. Rather than going for PPF or 5 Year Recurring Deposits, if you go for ELSS Funds than the returns will be much more after 5 years than simply putting your money in PPF or RD.

This is because ELSS is the Equity Product. These are the only 2 differences between ELSS & other mutual fund. Otherwise there is not a dime of difference between ELSS & other mutual funds. ELSS funds also have a fund manager whose job is to maintain the portfolio of stocks like other mutual funds.

ELSS is the only tax saving product that is Equity Linked. And that’s why it offers much better returns than any other tax saving financial product in the long run. ELSS can be a good tax saving option for you.