It’s that time of the year again. The deadline for tax filing is approaching, and you are scrambling to find ways to save money.
Usually, people rush to buy traditional insurance policies or lock their money in 15-year Public Provident Funds (PPF) just to save tax under Section 80C. While these options save tax, they often offer low returns that barely beat inflation.
What if there was a way to save tax AND grow your wealth significantly at the same time?
Enter ELSS (Equity Linked Savings Scheme), popularly known as Tax Saving Mutual Funds.
In this guide, we will decode ELSS funds, compare them with other tax-saving options, and show you how to start investing in minutes using the Sanchay Karo App.
What is an ELSS Mutual Fund?
ELSS stands for Equity Linked Savings Scheme. It is a diversified equity mutual fund that qualifies for tax exemption under Section 80C of the Income Tax Act, 1961.
- Tax Benefit: You can claim a deduction of up to ₹1.5 Lakh from your taxable income in a financial year. This can help you save up to ₹46,800 in taxes (for those in the highest tax bracket).
- Equity Exposure: ELSS funds invest at least 80% of their corpus in the stock market (Equity). This gives them the potential to earn inflation-beating returns (12-15% historically) over the long term.
- Lock-in Period: ELSS funds come with a mandatory lock-in period of 3 years. This means you cannot withdraw your money before 3 years from the date of investment.
Why Should You Invest in ELSS Funds?
ELSS funds offer a dual benefit that no other instrument can match effectively: Wealth Creation + Tax Saving.
1. Highest Return Potential
Traditional tax savers like PPF or NSC offer fixed returns (around 7-8%). ELSS, being market-linked, has the potential to deliver 12-15% returns over the long term, helping you beat inflation significantly.
2. Shortest Lock-in Period
Money invested in ELSS is locked for only 3 years. Compare this to PPF (15 years) or Tax-Saving FDs (5 years). This gives you liquidity faster than any other Section 80C option.
3. The “Forced” Discipline
The 3-year lock-in acts as a blessing in disguise. It prevents you from selling in panic during market volatility, forcing you to stay invested for the long term—which is the secret to making money in equity.
ELSS vs. PPF vs. FD: The Ultimate Comparison
Many investors stick to traditional options out of habit. Here is why ELSS wins:
| Feature | ELSS (Tax Saving Fund) | PPF (Public Provident Fund) | Tax Saving Fixed Deposit |
|---|---|---|---|
| Lock-in Period | 3 Years (Lowest) | 15 Years | 5 Years |
| Returns | Market Linked (12-15% potential) | Fixed (~7.1%) | Fixed (~6-7%) |
| Risk | Moderately High | Low (Govt backed) | Low |
| Inflation Beating? | Yes | Barely | No |
| Flexibility | SIP or Lump Sum | SIP or Lump Sum | Lump Sum only |
Verdict: If you have a risk appetite and want to grow your wealth while saving tax, ELSS is the undisputed champion.
Who Should Invest in ELSS Funds?
ELSS funds are ideal for almost every taxpayer.
- Young Earners: If you have just started working, you have a long horizon. ELSS helps you take equity exposure early to maximize compounding.
- Wealth Creators: Investors who want to use the Section 80C limit not just to save tax, but to build a corpus for future goals like a home or education.
- Last-Minute Tax Planners: If it is March and you still need to save tax, a lump sum ELSS investment is the quickest fix.
How to Invest with Sanchay Karo App (Step-by-Step)
Investing in tax-saving funds is seamless with Sanchay Karo. Our AI algorithms analyze hundreds of ELSS funds to recommend the ones with the most consistent track record.
Step 1: Download the App
Start your tax-saving journey today.
- 📲 Android Users: Click to Download from Play Store
- 📲 Apple Users: Click to Download from App Store
Step 2: Complete Paperless KYC
Sign up with your mobile number and complete your video KYC in under 2 minutes using your PAN and Aadhaar. No physical paperwork required.
Step 3: Explore “Tax Saving” Funds
- Open the app dashboard.
- Tap on the “Save Tax” or “ELSS Funds” category.
- You will see a curated list of top-rated ELSS funds from fund houses like Quant, SBI, Mirae Asset, Bandhan, etc.
Step 4: Choose SIP or Lump Sum
- SIP (Systematic Investment Plan): The smarter way. Invest a fixed amount (e.g., ₹5,000) every month to spread your tax planning across the year.
- Lump Sum: If you are nearing the tax deadline, invest a one-time amount to exhaust your limit instantly.
Step 5: Invest & Download Proof
Make the payment via UPI or Net Banking. Once processed, you can instantly download the Statement of Account (SOA) from the app to submit to your HR or CA as investment proof.
Why Sanchay Karo for Tax Planning?
- Smart Recommendations: Our AI looks at “Rolling Returns” and “Downside Protection” to ensure you pick a fund that performs well even in bad markets.
- Family Tax Planning: Manage tax investments for yourself, your spouse, and your parents all in one app.
- Capital Gains Reports: Easily download reports to file your ITR at the end of the year.
Conclusion: Stop Procrastinating, Start Saving
Tax planning should not be a last-minute panic. It should be a strategic part of your wealth creation.
By investing in ELSS via Sanchay Karo, you turn a mandatory tax-saving exercise into a profitable investment opportunity.
Save Tax. Build Wealth. Start Now.
👇 Download Sanchay Karo Now:
📲 Android: Get it on Google Play 📲 iOS: Get it on App Store
Smart Investment. Simple Process. Secure Platform. 🔒📈
Disclaimer: Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully. ELSS funds have a mandatory 3-year lock-in period.
