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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation

Which of the following investments in a mutual fund scheme qualifies for a deduction under Section 80C of the Income-tax Act (old regime)?

Investment in an Equity Linked Savings Scheme qualifies for Section 80C deduction under the old regime, up to Rs 1.5 lakh a year, because ELSS units carry a mandatory three-year lock-in. Other fund categories carry no such deduction.

  1. AUnits of an Equity Linked Savings Scheme (ELSS)Correct
  2. BUnits of a liquid fund
  3. CUnits of a large-cap equity fund
  4. DUnits of a gilt fund

Explanation

ELSS has a statutory 3-year lock-in and qualifies for deduction up to Rs 1.5 lakh under Section 80C in the old tax regime. Liquid, large-cap and gilt funds do not carry this benefit.

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