Income Tax Act, 1961’s section 80C enables an Indian citizen avail tax rebate up to ₹150000 a year. ELSS mutual funds investment comes under 80C. By investing up to 1.5Lac per year in these tax savings schemes, one can save up to ₹47000 per year in taxes.

Next, we are going to learn how to invest in ELSS to save tax on income.

As you might already know tax savings are not limited to tax saving mutual funds; there are other ways too. But here we will stick to ELSS which stands for Equity Linked Savings Scheme because I’m sure you know equity linked savings schemes have good potential give you decent returns as compared to other savings instruments.

At the same time, you must know that just like other mutual funds schemes ELSS schemes also come with market risk.

One last thing to know before I show you how to invest ELSS mutual funds is that these investments have 3 years lock-in period. So make sure, you are willing to hold your investments for 3 years.

How to invest in ELSS?

You can watch above video to know step-by-step how to invest in ELSS schemes. Alternatively you can read on to know the process.

It is super easy.

All you need to do is open your account with a stock broker or directly with concerned asset management company and start investing.

I would suggest you open your account with a stock broker because by doing so you will get all mutual funds schemes offered by different AMC companies at one place.

On the contrary, if you would choose to invest directly with the concerned AMC company then you will need to create account with them first. And in future, let’s say you would like to invest in some other company’s ELSS scheme then you will be required to open account with them too. By doing so you would end up opening so many accounts.

But not in the case of stock brokers. A reputable stock broker just like Zerodha helps you directly invest in different scheme without the need to open account with all asset management companies.

You know what is the best part, your ELSS mutual fund investment will be considered direct investment if you will choose Zerodha to invest in tax savings funds. This way you will save 1% commission fee on your investment.

Why should you open Zerodha account to invest in ELSS?

• Zerodha is India’s No.1 discount broker and their client base is 9+ million (it is so huge).
• The firm is registered with the Securities and Exchange Board of India (SEBI).
• With one account, you will be able to invest in mutual funds, stocks, currency and commodities.
• Mutual Fund investment is free in Zerodha. You don’t pay any brokerage.
• Your investment will be considered direct which means you will not pay 1% commission fee; which you usually pay when you invest through a financial adviser.
• Zerodha trading platform is super fast and advanced.
• It only takes 15 minutes to complete Zerodha account opening application process and within 24-48 hours you will be ready to invest. Click to know whether Zerodha is safe for investment.

Here is the link to open Zerodha account:

Steps to invest in ELSS Mutual funds:

• Open your phone’s app store and install Zerodha Coin app. This is their dedicated app for mutual fund invest.
• Login to the app and from the dashboard, click on Save Taxes. Alternatively, you can directly use the search bar to search ELSS mutual fund scheme of your choice.
• Then you will have two options: Buy and SIP.
• Simply choose Buy if you would like to invest one time lumpsum amount. Or you can tap on SIP if you would like to investment on monthly basis.
• Before you choose any option, make sure to add required amount to your Zerodha account by using Add Funds option.

That’s it. This is all you need to start investing in ELSS schemes.