ELSS fund
is typically a diversified mutual fund with major investments in the equities.
As it is equity fund, the returns generated through the ELSS are often
influenced by the standing of the equity market.

The basic characteristics of ELSS:

The following is the major characteristics of ELSS:

• Tax benefit: In an ELSS scheme, there is no upper limit for
  making an investment but an investor can avail tax benefit under section 80C of
  the current Income Tax Act up to the sum of Rs.150000.
• Lock-in period: An ELSS scheme comes with a minimum
  lock-in period of 3 years that starts from the day of investment. An investor
  can choose to exit from an ELSS scheme after the completion of the lock-in
  period.

The major benefits of ELSS funds:

The following is the major benefits of an ELSS fund:

• Tax
  Savings: As persection 80C of the prevailing
  Income Tax Act, an investor can enjoy
  the benefit of tax deduction under ELSS funds. This not only helps them to earn
  higher returns but at the same time gives them the chance to save money on tax.
  
• Lowest
  lock–in period:When compared to the other tax saving
  investment options, ELSS has the lowest lock-in period. This not only helps the
  investor generate higher returns but also offers them a chance to exit from the
  scheme without much ado.
• A lower rate of Tax on Gains: As per
  the current law, the rate of tax on long-term gains is shorter than short-term
  gains. Owing to the feature of 3 years lock-in period, the gains derived from an
  ELSS fund is automatically long-term in nature, which ultimately means a lower
  rate of tax on gains.
• The power of Compounding: Most of
  the time the investors are advised to invest in a fund that stretches over a
  broader time frame. An investment in an ELSS fund demands a disciplined
  approach towards a long-term investment habit by default, which in turn assists
  them to derive the benefit of compounding over time.
• Higher Returns:
  Investments in equity schemes generate higher returns when compared to most
  other investment schemes. The ELSS funds typically invest in equity schemes
  which in turn generate a higher rate of returns when compared to the different
  tax saving investment options.
• Optional
  redemption: After the completion of the
  lock-in period, the investor has the liberty to either continue or redeem their
  investment. If the investor is happy with the flow of returns from their chosen
  ELSS fund, they may continue with their investment.
• The option of SIP: An ELSS
  investor may opt for the SIP option of investment. Such an option allows them
  to invest a fixed sum of money at predefined intervals and also facilitates
  savings in the long run.

An investor can make a lump-sum Investments in ELSS or opt for a SIP.
Each type of investment options has its own pros and cons; to find out more in
details, consult our professional fund managers and clarify all your doubts
about ELSS funds.