What Is an ELSS Fund?
ELSS (Equity Linked Savings Scheme) is a type of mutual fund that primarily invests in equity markets and offers Section 80C tax benefits up to ₹1.5 lakh per financial year.
It’s the only type of mutual fund eligible for tax deductions under Section 80C.
Lock-in Period: 3 Years
What Does Lock-In Mean?
The lock-in period refers to the minimum holding period during which you cannot redeem or switch your investment.
- Duration: 3 years (from the individual date of investment)
- Applicable To: Every SIP or lumpsum investment in ELSS
- After 3 Years: You can redeem the units anytime
SIP in ELSS? Each SIP Installment Has Its Own Lock-In
If you start a monthly SIP in an ELSS fund:
- Each installment is locked for 3 years from its investment date
- For example:
- Jan 2022 SIP → Redeemable after Jan 2025
- Feb 2022 SIP → Redeemable after Feb 2025
So, you can’t withdraw the entire investment after 3 years of starting the SIP, only the earliest installments.
Why ELSS Is Still Worth It Despite the Lock-In:
| Benefit | Why It Matters |
| Shortest Lock-In | Just 3 years (vs. 5 years for tax-saving FDs, 15 for PPF, etc.) |
| Market-Linked Returns | Potential to earn 12–15% annually over long term |
| 80C Tax Benefit | Save up to ₹46,800 in taxes/year (if in 30% bracket) |
| Wealth Creation + Tax Saving | Dual benefit unmatched by most other 80C options |
How EzyMoneyDeals Helps You Manage ELSS Lock-In Efficiently
| Feature | How It Helps |
| ELSS Tracker | Tracks each SIP/lumpsum with individual lock-in countdown |
| Smart Alerts | Notifies you when specific investments complete their 3-year lock-in |
| Growth Dashboard | See how your ELSS is performing and projected to grow |
| Auto-Redeem Option | Option to schedule withdrawal post lock-in for rebalancing |
| Tax Summary View | Easily track how much 80C benefit you’ve claimed each year |
| ELSS Advisory | Get help choosing the best-performing ELSS funds |
Quick FAQs on ELSS Lock-in
| Question | Answer |
| Can I withdraw before 3 years? | No, not allowed |
| Does SIP have separate lock-ins? | Yes, each SIP has a 3-year lock-in |
| Can I switch to another fund within 3 years? | No, switching = redeeming, which is locked |
| Are ELSS returns taxable? | Gains above ₹1 lakh/year are taxed at 10% (LTCG) |
Pro Tip:
Use ELSS SIPs as a long-term wealth tool, not just for tax saving. The lock-in builds investing discipline and helps ride out short-term volatility.
