Tax-deferred investments such as equity linked savings plan (ELSS) offer market linked returns and tax exemption are some tax-deferred investment options in India. Use our ELSS calculator along with ROI calculator to find your potential returns using investment amount, time horizon, and expected rate of return.
What is an ELSS Calculator?
An ELSS calculator online: It can calculate the maturity value and potential returns from ELSS investments. Similar to a SIP calculator or lumpsum calculator, you can specify parameters such as investment amount, annual yield and time horizon to estimate your returns.
How to Use an ELSS Calculator?
- Visit an online ELSS calculator tool on a reliable platform.
- Enter the monthly or lump-sum investment amount.
- Specify the expected annual return (typically ranges between 12% to 15%). You can use our interest rate calculator to compare different scenarios.
- Input the investment duration (minimum 3 years).
- Click on "Calculate" to view the maturity value and estimated returns.
Advantages of Using an ELSS Calculator
- Efficiency: Quickly estimates potential returns with minimal input, similar to our compound interest calculator.
- Clarity: Helps in understanding the impact of market performance on investments.
- Goal Planning: Facilitates financial goal-setting by providing clear projections.
- Free to Use: Available on various financial platforms at no cost.
How Does an ELSS Work?
ELSS is a kind of mutual fund, it's mostly equity. It has 3 years mandatory lock-in and also includes tax exemption under Section 80C of the Income Tax Act. Returns are market correlated and subject to market performance. For long-term planning, consider using our NPS calculator alongside ELSS calculations.
ELSS Investment Returns Example
| Investment Type | Amount Invested (INR) | Tenure (Years) | Expected Annual Return (%) | Maturity Amount (INR) |
|---|---|---|---|---|
| Lump Sum | 1,00,000 | 3 | 12 | 1,40,492 |
| SIP | 5,000/month | 5 | 14 | 4,47,093 |
| Lump Sum | 2,00,000 | 7 | 15 | 5,34,569 |
Comparison of ELSS with Other Tax-Saving Investments
| Investment Option | Lock-in Period | Expected Returns | Risk Level | Tax Benefit |
|---|---|---|---|---|
| ELSS | 3 years | 12-15% | High | Up to INR 1.5 lakh under Section 80C |
| PPF | 15 years | 7.1% | Low | Up to INR 1.5 lakh under Section 80C |
| NSC | 5 years | 7.7% | Low | Up to INR 1.5 lakh under Section 80C |
| Tax-Saving FD | 5 years | 6.5-7.5% | Low | Up to INR 1.5 lakh under Section 80C |
Benefits of ELSS Over Other Investments
| Feature | ELSS | Other Options |
|---|---|---|
| Shortest Lock-in Period | 3 years | 5-15 years |
| Potential for High Returns | Yes (12-15%) | No (7-8%) |
| Market-Linked Growth | Yes | No |
| Tax Benefit | Up to INR 1.5 lakh under Section 80C | Up to INR 1.5 lakh under Section 80C |
Key Policies and Regulations Regarding ELSS
- Benefits Under Section 80C of Income Tax Act: You can deduct upto INR 1.5 Lakh for investments.
- Lock-in Period: Minimum lock-in of ELSS is 3 years, which is the shortest among tax savings funds.
- Eligibility: Any resident person can invest in ELSS. NRIs can even get invested with certain mutual funds.
- Returns: Returns are market dependent and can fluctuate according to the equity market performance.
- Investment Approach: ELSS is investable in the form of lump sum or SIP.