ELSS stands for Equity-Linked Saving Scheme, which is a type of mutual fund in India that offers tax benefits to investors. Zerodha is an Indian financial services company that offers online trading and investment services. If you are a Zerodha customer, you can invest in ELSS funds through their platform.
Today’s article will discuss How to Invest in ELSS through Zerodha? Before that, we will understand what is it with features and benefits on the same.
ELSS Funds in Zerodha
ELSS funds are mutual funds in India that invest primarily in equity and equity-related instruments. Some features and benefits of ELSS include:
- Tax benefits: Investments in ELSS are eligible for tax deductions under Section 80C of the Income Tax Act, up to a limit of Rs 1.5 lakh per financial year.
- Diversification: ELSS funds invest in a diversified portfolio of equity and equity-related instruments, which helps to spread the risk across different sectors and companies.
- Equity exposure: ELSS funds provide investors with exposure to the equity market, which has the potential for higher returns over the long term compared to fixed income investments.
- Lock-in period: ELSS funds have a lock-in period of 3 years, which means that the investment cannot be redeemed before that period. This helps to align the investor's interests with the long-term nature of the equity market.
- Risk and returns: ELSS funds are considered moderately high-risk investments, but have the potential for higher returns compared to other tax-saving options.
Best ELSS Funds in Zerodha
As the performance of mutual funds can be affected by various factors such as market conditions, the fund manager's investment strategy, and the performance of the underlying assets. However, some ways to evaluate mutual funds are by considering their:
- Past performance: Look at the fund's historical returns over different time periods and compare them to the returns of similar funds in the same category.
- Risk and volatility: Evaluate the fund's risk profile and volatility, and compare it to other funds in the same category.
- Fund manager: Research the fund manager's track record and investment strategy.
- Expense ratio: Look at the fund's expense ratio, which is the percentage of assets used to cover the fund's operating expenses.
Here I have shortlisted a few mutual funds to invest in based on the above parameters.
| Scheme Name | CAGR (%) | |
| 3 Years | 5 Years | |
| Parag Parikh Tax Saver Fund | 25.37 | -- |
| Canara Rob Equity Tax Saver Fund | 22.54 | 16.79 |
| Mirae Asset Tax Saver Fund | 20.59 | 15.71 |
| Quant Tax Plan | 37 | 20.7 |
How to Invest in ELSS through Zerodha?
Time Needed : 1 minutes
If you are a Zerodha customer, you can invest in ELSS funds through their platform by following these steps:
- Zerodha account
Sign in to your Zerodha account and Go to the Coin app.
- Coin App
Go to the Mutual Funds tab on the top menu and select "Mutual Funds"
Select "Equity" as the fund type and "ELSS" as the category. - ELSS funds
Browse through the available ELSS funds and select the one you want to invest in.
Enter the investment amount and select the frequency of investment (one-time or SIP). - Review
Review the details of your investment and click on "Invest" to confirm.
Follow the on-screen instructions to complete the transaction.
FAQs
- What are the tax benefits of investing in an ELSS?
Investors can claim a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act for investments made in ELSS.
- How much can I invest in an ELSS?
There is no upper limit on investment in an ELSS.
- What is the lock-in period for an ELSS?
The lock-in period for an ELSS is 3 years.
- How does an ELSS differ from other mutual funds?
ELSS has a lock-in period of 3 years and also offers tax benefits, unlike other mutual funds. Additionally, ELSS funds mainly invest in equity shares of companies, while other mutual funds may invest in a variety of assets.
- How can I invest in an ELSS?
You can invest in an ELSS by visiting the website of any Asset Management Company (AMC), or by visiting the website of a mutual fund distributor or by visiting your bank which provides mutual funds.
- How do I track the performance of my ELSS investment?
You can track the performance of your ELSS investment by visiting the website of the Asset Management Company (AMC) that manages the fund, or by visiting websites that provide mutual fund information.