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Market Intelligence › Basic Terminologies
Each installment has its own lock-in, and the rush of tax season
Published by The Retail Trader · AUG 03, 2026 · Mutual Funds & AMC
ELSS is an equity fund that comes with a tax deduction benefit, and in exchange it carries a lock-in. The mechanism is simple, but there is one detail people often miss.
The lock-in applies not to the whole folio but separately to each investment. That is, every SIP installment has its own lock-in period, counted from its own date.
So when you take ELSS through a SIP, the entire amount does not become free at once — it becomes free installment by installment.
These points make the decision better:
• You do not have to withdraw after the lock-in ends — it becomes a normal equity fund.
• It is an equity fund, so the full market risk applies.
• Check first whether the deduction is available under your tax regime.
• Buying in a rush at the end of the year often leads to picking the wrong fund.
An investment made to save tax is still an investment — the fund selection should be as carefully thought through. Setting up the SIP at the start of the year removes the biggest problem of this whole category.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no guaranteed-return claim, and is not advisory. Rules, rates and mechanics are changed from time to time by the exchanges, SEBI and RBI, so verify every number yourself with your broker or an official source.