5 reasons to invest in Equity Linked Savings Schemes and also to save tax

Equity Linked Savings Schemes are essentially mutual funds which invest in equity. These funds are amongst the best options today that allow you to grow your capital while helping you save tax. 5 key reasons why you should opt for this scheme is as below:

  1. Tax Savings – ELSS investments allow you to claim deductions of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. What’s more, both your principal and capital growth are exempt from tax. If you opt for a dividend plan, the dividends are also tax free. There are very few investment options today where both the principal and the returns are tax free.
  2. Low lock in period – When it comes to a tax saving investment, ELSS funds have among the lowest lock in periods as compared to all others. ELSS have a lock in period of 3 years, compared to 5 years for bank FDs or 15 years for Public Provident Funds (PPF).
  3. Growth opportunity– ELSS offers one of the best opportunities to grow your funds since the returns are linked to market performance. While it is true that it carries its fair share of risks and one cannot guarantee a return, historically ELSS funds have provided one of the best returns among other tax saving options for a horizon of 3 years and above.
  4. Flexible investments– If you are unwilling to invest your entire money at one go, you can choose to opt for Systematic Investment Plans (SIPs) where you pay a specified fixed amount every month over the period of investment.
  5. Option for regular income– If you invest in a dividend payout plan, you get an opportunity to earn regular income even when your investments are locked in. As mentioned earlier, since these are equity schemes, the dividend income is tax free in your hands.


To know more about Investment Services offered by Standard Chartered Bank, click here or SMS ‘SAVETAX’ to 57575.

Tax Benefits will be as per applicable tax laws. The user/investor needs to verify all the facts and circumstances with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. Tax laws are subject to amendments from time to time.
Mutual Funds investments are subject to market risks. Please read all Scheme Information Documents carefully before investing. Investors in the scheme(s) are not offered a guaranteed or assured rate of return and there can be no assurance that the scheme(s) objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the scheme(s).
Standard Chartered Bank, India is a distributor or referrer of the relevant third party investment products. In its capacity of a distributor or referrer of relevant third party investment product, Standard Chartered Bank, India may offer advice which is incidental to its activity of distribution/referral. Nothing in this document should be construed as ‘Investment Advice’ as defined under the Securities and Exchange Board of India (Investment Advisors) Regulations, 2013 or otherwise.

Back to Top