New mutual fund rule: How new ELSS passive funds will differ from existing schemes
The passive ELSS scheme will be based on one of the indices comprising equity shares from top 250 companies in terms of market capitalisation.
The move by capital markets regulator Sebi to allow mutual funds to launch passively managed Equity-Linked Savings Schemes (ELSS) will allow a cost-effective tax-saving alternative to individual investors. ELSS funds are basically tax saving equity mutual funds, in which majority of the funds are invested in stocks. They come with a lock-in period of 3 years. Under Section 80C, investment of up to ₹1.5 lakh in a financial year in eligible instruments (including ELSS) are exempt from tax.