Will investments in large cap funds fetch me deduction under Section 80C?

Can you please tell me if investing in a large cap fund can give me tax benefits under Section 80C? Or do I have to invest in ELSS funds to get tax deductions under 80C?

-Barsha Sharma

Investments in large cap mutual funds will not help you to save taxes under Section 80C of the Income Tax Act. You must invest in Equity Linked Saving Schemes or ELSS to claim tax deduction under Section 80C. Investments in ELSS or tax saving mutual funds qualify for tax deductions of up to Rs 1.5 lakh in a financial year.

Here are our recommended ELSS funds: Best ELSS funds to invest in 2020

Here are a few things you should remember before investing in ELSS funds. Though ELSS funds have a mandatory lock-in period of only three years, do not invest with a horizon of just three years in them. You should always have an investment horizon of at least five to seven years when you are investing in an equity mutual fund scheme, including ELSS funds. Also, do not overlook the risk in these schemes. These schemes invest most of their corpus in stocks. And they mostly follow a flexi cap investment strategy. So, they have a higher risk element in them.