ELSS Calculator
An ELSS Calculator is a helpful tool for investors planning to invest in Equity Linked Saving Schemes (ELSS), which are tax-saving mutual funds with a lock-in period of 3 years. The calculator estimates:
- Returns based on expected rate of return
- Maturity amount for SIP (Systematic Investment Plan) or lump sum investments
🧾 What is ELSS?
Equity Linked Savings Scheme (ELSS) is a type of mutual fund that offers tax benefits under Section 80C of the Income Tax Act. By investing in ELSS, you can claim deductions of up to ₹1.5 lakh per financial year.
For someone in the 30% tax bracket, this means potential tax savings of up to ₹46,800 annually. Apart from tax benefits, ELSS funds invest primarily in equities, offering the potential for high long-term returns—often in the double digits. They also come with a 3-year lock-in period, the shortest among tax-saving instruments.
🧮 What is an ELSS Calculator?
An ELSS Calculator is an online tool designed to estimate the future value of your investment in ELSS funds—whether through SIP (Systematic Investment Plan) or lump sum. It helps you:
- Forecast the maturity value
- See total invested amount
- Understand potential gains
- Compare different investment scenarios
All you need to input are:
- Fund name
- Investment amount (monthly SIP or lump sum)
- Investment duration
- Expected rate of return
Some calculators also allow you to:
- Extend investment duration to see long-term growth
- Modify investment amount to achieve specific financial goals
💡 How Can the ELSS Calculator Help You?
The ELSS calculator isn’t just for estimating returns. It can help you:
- Get accurate projections of potential growth
- Compare different ELSS funds
- See how SIP vs lump sum investments perform
- Plan long-term wealth creation
- Decide how much you need to invest to reach a financial goal
⚙️ How Does the ELSS Calculator Work?
The calculator determines returns based on your input:
Inputs Required:
- Investment amount (SIP or lump sum)
- Investment duration (in years)
- Expected rate of return
- Frequency (monthly for SIP)
Formulas Used:
For Lump Sum Investments: Future Value (FV)=C×(1+r)t\text{Future Value (FV)} = C \times (1 + r)^tFuture Value (FV)=C×(1+r)t
For SIP Investments: FV=P×(1+r)n−1r×(1+r)\text{FV} = P \times \frac{(1 + r)^n – 1}{r} \times (1 + r)FV=P×r(1+r)n−1×(1+r)
Where:
FV= Maturity amountC= Initial lump sum amountP= SIP amountr= Monthly return (Annual return ÷ 12 ÷ 100)t= Yearsn= Number of months
🧾 ELSS SIP Calculator Example:
Suppose you invest ₹5,000 monthly in the Quant Tax Plan for 5 years at an expected return of 30.71% annually.
The calculator will show a maturity value of around ₹7.12 lakh.
💼 ELSS Lump Sum Calculator Example:
If you invest ₹1,00,000 as a lump sum in the Quant Tax Plan for 5 years, assuming a 24.9% annual return,
you’ll see a projected maturity of about ₹3.04 lakh.
📊 Example Calculation Using the Formula:
Lump Sum:
Investment = ₹2,00,000
Expected return = 15% p.a.
Duration = 5 years FV=2,00,000×(1+0.15)5≈₹4,02,271FV = 2,00,000 \times (1 + 0.15)^5 \approx ₹4,02,271FV=2,00,000×(1+0.15)5≈₹4,02,271
SIP:
Investment = ₹5,000/month for 5 years
Return = 15% annually FV≈₹4,42,873FV ≈ ₹4,42,873FV≈₹4,42,873
📌 Note: These are estimates. Actual returns may vary based on market performance and fund management.
✅ How to Use the ELSS Calculator
- Select the ELSS fund of your choice
- Choose investment type: SIP or lump sum
- Enter the investment amount
- Set the investment duration
- View projected maturity, returns, and investment summary
Additional features include:
- ET Money rank of the fund
- Fund age, AUM, expense ratio, and exit load details
🌟 Benefits of Using an ELSS Calculator
Make more informed investment decisions
Quickly estimate future value of investments
Compare different investment strategies
Plan tax savings and returns more effectively
Understand the impact of increasing SIP/lump sum amounts
