Here are the reasons why one should invest in an ELSS funds:

1. Save tax and create wealth

ELSS funds are equity mutual funds and they invest in large, mid and small companies across all sectors. Being an equity mutual fund, it has the potential to create wealth over the long term through equities.

Section 80CCC allows an individual to claim a deduction of up to ₹1.5 lakh per year for contributions made to specified pension funds.

2. Lock-in period

ELSS funds come with a lock-in period of three years, and there are no provisions to make a premature exit. If you compare the lock-in period for ELSS with other tax saving investment options, then ELSS scores an extra point.

Lock-in period for tax-saving investments
Investment option	Lock-in period
ELSS	3 yrs
PPF	15 years
Tax-saving FD	5 years
NSC	5 yrs and 10 yrs
ULIP	5 yrs

3. Small investment via SIPs

You can start an SIP for an ELSS mutual fund from a minimum of ₹500. And like other mutual funds, as and when your income increases you can increase your investment amount via SIP top-up.