Even as March sets in and investors look to plan their finances for the upcoming financial year to save tax and grow their money at the same time, an ELSS mutual fund may help the investors to achieve the goal. An ELSS scheme is an acronym for Equity Linked Savings Scheme. Notably, the plan will invest into diversified equity plans. Under this scheme, unlike regular equity funds which are taxed, ELSS provides an equity exposure but also provides a tax benefit under Section 80C of the Income Tax Act, as it qualifies as one of the designated investments are eligible for a tax deduction. We take a closer look at the salient features of ELSS funds. Tax benefit While there is no maximum investment limit to invest into ELSS funds, investments up to Rs 1.50 lakh are eligible for a tax break. Notably, this limit in inclusive of other investments and deductions applicable under this section. ELSS is a good blend of a tax saving and long-term wealth creation. Lock-in period Just like any other tax-saving investments, ELSS has a lock-in period. While investments such as Public Provident Fund (PPF) and National Savings Certificate (NSC) have a lock-in period of 15 years and 5 years respectively, ELSS has a lock-in period of 3 years. Accordingly, investors cannot sell units before the completion of this period. In case of SIPs, every subsequent investment is treated as a fresh lump-sum amount and accordingly, the lock-in period is calculated from date of investment. \u201cSo, for the SIP done on, say, March 1, 2018, the lock-in period will be 3 years starting from March. For the instalment made on December 1, 2018, the lock-in period will commence for 3 years from then,\u201d Morningstar explains. Notably, once the 3-year period lapses, the investors can access their money and treat the fund as any other open ended equity mutual fund. Long term capital gains tax After Union Budget 2018, investors in equity mutual funds will have to pay a long-term capital gain (LTCG) tax of 10%, if the long-term capital gains for that financial year are above Rs 1 lakh. Therefore even in the case of ELSS funds, if the long-term capital gains in any year exceed Rs 1 lakh investors will have to pay LTCG tax. After the lock-in period of three years, investors may consider to exit the plan, as the ELSS then is like any other open ended fund.