Income Tax
ELSS (Equity Linked Savings Scheme)
Tax-saving mutual fund with 3-year lock-in — qualifies for Section 80C deduction up to ₹1.5L.
Full Definition
Equity Linked Savings Scheme (ELSS) is a type of mutual fund that invests primarily in equity and equity-related instruments. ELSS has the shortest lock-in period (3 years) among all Section 80C investments. Returns are market-linked and historically higher than PPF/NSC over long periods. After the 3-year lock-in, gains above ₹1.25 lakh attract LTCG tax at 12.5%. ELSS is only available under the old tax regime — no 80C benefits in the new regime. SIP in ELSS is popular — each monthly SIP creates a separate 3-year lock-in.
More Income Tax terms
ITR (Income Tax Return)
Annual declaration filed with India's Income Tax Department reporting income, deductions and tax paid.
AY (Assessment Year)
The year in which income earned in the previous financial year is assessed and taxed.
FY (Financial Year)
The 12-month period from April 1 to March 31 during which income is earned and recorded.
PAN (Permanent Account Number)
Unique 10-character alphanumeric identifier issued by the Income Tax Department to every taxpayer.
TAN (Tax Deduction Account Number)
10-character number required by entities that deduct or collect tax at source (TDS/TCS).