Why should one consider ELSS even after opting for the New Tax Regime?

The new tax regime has a default tax system, so there is no provision for exemptions and deductions, which were available under the old tax system. In such a situation, the question arises whether the benefits of ELSS can be availed under the new tax regime. According to the data released by CBDT, about 74% of taxpayers have already adopted the new tax system.

From the financial year 2024-25, the new tax system has been made the default tax system, that is, if a taxpayer does not choose the old tax system, then he will be considered under the new tax regime by default. To encourage taxpayers, the new tax system has been made more attractive, in this taxpayers do not need to worry much.

Will you get the benefit of ELSS?

The new tax regime has a default tax system, so there is no provision for exemptions and deductions, which were available under the old tax system. In such a situation, the question arises whether the benefits of ELSS can be availed under the new tax regime. According to the data released by CBDT, about 74% of the taxpayers have already adopted the new tax system.

Will you save tax or will you only get return on investment?

It is important to know that under the new tax system, if taxpayers invest in ELSS, then they will also get any benefit in saving tax from it or they will only get return on investment. Many investors are investing money in ELSS, also known as Tax Saving Mutual Fund Scheme. They want to increase their wealth by investing in the scheme. Even though they are not getting the benefit of tax exemption.

According to the data, the AUM of ELSS category till January 2025 is Rs 2.32 lakh crore. Which is 13.6 percent more than last year.

You can create a better fund

According to the notification issued by the Ministry of Finance, as per the Equity Linked Savings Scheme 2025, it is necessary for ELSS to invest at least 80 percent of its total assets in equity and equity related instruments.

The lock in period of these schemes is only 3 years. Which is much less than other schemes. Even after being linked to the market, their returns have the potential to create a strong fund for investors.

In the last few years, investors have got an annual return of 14.56 percent under this scheme. Due to which this scheme still remains a favorite for taxpayers. In the last 3 years, the average return under direct in this category has been 14.6% and in the last 5 years it has been 17.7 percent

You will get more benefit in the long term

If you continue your investment for a long time, then in such a situation you can get more returns because the risk can be high in the short term.

Currently, most ELSS funds keep a large part of the portfolio in large caps keeping in mind their valuation.

Benefits of investing in ELSS

It has a short lock-in period, which can be used to get better liquidity along with better returns.

Wealth can be created by investing in it.

Investors can achieve their financial goals in a short time.

You will have to choose the old tax regime.

If you want to save tax through ELSS and also get good returns, then you will have to adopt the old tax regime for this.