4 Things To Check Before Buying An ELSS Plan

Tax deduction available under Section 80C

Find out tax deduction available for equity linked savings scheme (ELSS) investments, out of annual limit of Rs 1.5 lakh under Section 80 C. Provident fund contributions and existing tax-saving investments like Public Provident Fund (PPF) and life insurance premiums qualify for deductions.

Your risk appetite

The growth of ELSS is dependent on the equity market conditions. If you are a long- term investor i.e. investing in equities to 8-10 years or more, and can handle short-term market turbulence, consider investing in ELSS.

Fund performance

Look for established performance track record of the scheme over one-, three- and five-years. This will tell you about the scheme performance in market upturns and downturns over time.

Fund expenses

Fund houses charge you a recurring expense for managing your money called expense ratio. Beware of higher expenses since they eat your returns.