Will ELSS Lose Its Sheen?

Tax has always been a deciding factor for many while choosing investment avenues. Equity-linked savings scheme (ELSS) has been among the most sought-after tax-saving products. Interestingly, exactly 30 years after its launch, it might lose its sheen, thanks to the government’s intent of moving towards the new tax regime, which doesn’t allow deductions on tax-saving investments. “The Budget proposes to move to a clutter-free new tax regime,” writes State Bank of India (SBI) in its budget report. That could push people towards the new tax regime. “The increase in the tax slabs under the new regime may prompt taxpayers to shift to it,” says Ashish Patil, head, product and strategy, LIC Mutual Fund. Once that happens, the dynamics for ELSS could change. A Favourite With Investors ELSS, which comes with a three-year lock-in period, qualifies for a...