ELSS has a lock-in period of only 3 years.
ELSS is one of the most preferred tax saving options under Section 80C of the Income Tax Act due to the shortest lock-in period of three years.
- February 19, 2021, 3:51 PM IST
What is ELSS?
ELSS is an equity mutual fund category in which tax exemption is available on investment under Section 80C of the Income Tax Act. The best part of it is also that it has a lock-in period of only 3 years.
Palka Chopra, Senior Vice President, Master Capital Services, said that if we look at the returns of ELSS schemes in the last year, we have got more than 35 percent.Average return is around 25%
Last year, ELSS Mutual Fund has given an average return of around 25 per cent. The best performing scheme has given 60 per cent returns and the worst performer in the category has given 11.5 per cent returns in the same period. Now the question arises whether these returns are sustainable? Mutual fund managers believe that ELSS schemes will continue to provide such returns as long as the stock market continues to boom.
Harish Bihani, fund manager of ICSSI Prudential Mutual Fund, ELSS, says, “Currently equity markets are booming due to the liquidity driven by the global central market. As long as this situation persists, the markets will reach a higher level and will get good returns. However, no one knows yet when the global central bank raises interest rates. But there does not seem to be a possibility in the near future.