ELSS Calculator

ELSS Calculator

The ELSS mutual fund calculator is a tool that can help you estimate the value of your ELSS investment over a specific period. You can use either the lump sum or SIP ELSS calculator. The lump sum calculator requires you to enter the amount of investment, the expected rate of returns, and the duration of the investment.

Once you've entered all the necessary details, the calculator will display the amount your investment would have accumulated at the end of the investment period. If you need to achieve your goals sooner, the ELSS calculator can help you estimate the additional amount you need to invest.

What is an ELSS and How Does it Work?

Equity Linked Savings Schemes (ELSS) are diversified equity funds that primarily invest in the stocks of listed companies. These funds select stocks from across market capitalisation (large, mid, and small caps) and sectors to maximize capital appreciation over the long run. The fund manager carefully chooses stocks after conducting in-depth market research to deliver optimal risk-adjusted portfolio returns.

ELSS funds qualify for tax benefits under Section 80C of the Income Tax Act. The maximum tax deduction allowed is Rs. 1.5 lakh and investing in ELSS can help save up to ₹46,800 annually in taxes.

Let us find out the formulae to calculate the ELSS maturity amount and we will understand the concept with an example as well.

FV = C(1+r)^t

Where,

• FV = Future Value
• C = Investment
• r = expected rate of return
• t = time horizon of investment

Suppose you invest ₹100,000 in an ELSS mutual fund with an expected rate of return of 12% per annum for 5 years.

So, the future value of your investment after 5 years would be approximately ₹176,234.

How to Invest Using the ELSS Calculator?

With the help of Investkraft’s ELSS calculator, you can find out how much investment you need every 15 days, a month and 3 months and estimate the potential future value of your investment. Here is how you can use the calculator:

1. Select either “SIP” or “Lumpsum”
2. Enter the amount you want to invest
3. Now choose the frequency of your investment
4. Select a tentative interest rate
5. Enter a number to represent the duration for which you want to stay invested
6. Click on the “Invest Now” button

What are the Benefits of ELSS?

Listed below are the benefits of investing in ELSS mutual funds -

• Tax Savings: ELSS funds are the only mutual funds eligible for tax deductions up to Rs 1.5 lakh under section 80C of the Income Tax Act. They offer better post-tax returns than other investment options like ULIPs or PPF. (ULIPs) or Public Provident Fund (PPF).
• Short Lock-in Period: ELSS funds remain locked in for 3 years, unlike other investments with a minimum lock-in period of 5 years.
• Can Provide a Long-Term Return: Funds can grow by not redeeming them for three years. Investing in equities can create considerable wealth over time.
• Inculcates the Habit of Saving: ELSS schemes can be invested in with a minimum of Rs 500 per month through SIP. Monthly investments can help grow your wealth.
• Higher Returns: ELSS funds, which invest in equities, offer higher returns than traditional savings schemes. On average, ELSS generates around 12% returns over 10 years, compared to schemes like PPF that generate around 8%.
• Redemption Not Necessary After 3 Years: ELSS investors aren't required to redeem their investments after 3 years. There's no maximum investment duration.