Types of funds
What is ELSS?
An ELSS is an equity fund with a 3-year lock-in whose investments qualify for a tax deduction under the old tax regime, within the overall ₹1.5 lakh yearly limit.
How it works
It invests at least 80% in equity. The 3-year lock-in is the shortest among the old regime's tax-saving options, and for a SIP each instalment is locked for 3 years from its own date.
Under the new tax regime there is no deduction, but an ELSS still works as a diversified equity fund.
Example
A SIP instalment made on 10 March 2026 can be redeemed from 10 March 2029; the instalment of 10 April 2026, from 10 April 2029.
Keep in mind
- Gains are taxed like other equity funds when you redeem.
- Do not choose ELSS for the tax break alone; it is still equity with equity's risks.
Questions people ask
Can I withdraw from ELSS before 3 years?
No. Each investment is locked for 3 years from its date.
Does ELSS save tax in the new regime?
No. The deduction is available only under the old regime.
Related terms
General information for education, not investment advice or a recommendation of any scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance may or may not be sustained in future. Last reviewed 25 October 2026.