NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Which of the following investments gives a deduction under Section 80C of the Income-tax Act for a mutual fund investor, subject to the overall limit?
An Equity Linked Savings Scheme qualifies for the Section 80C deduction, up to the overall limit, under the old tax regime. ELSS has a mandatory three-year lock-in, while liquid, gilt and index funds do not offer any such tax deduction.
- AInvestment in a liquid fund
- BInvestment in an Equity Linked Savings Scheme (ELSS)Correct
- CInvestment in a gilt fund
- DInvestment in an index fund
Explanation
ELSS units, which carry a 3-year lock-in, qualify for Section 80C deduction up to the overall limit of Rs 1.5 lakh under the old regime. Liquid, gilt and index funds carry no such deduction.
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