Equity Linked Savings Schemes (ELSS) are eligible for deduction under Section 80C of the Income Tax Act. However, such schemes have a lock-in period of _______ from the date of investment.

Practice question from Nism VA Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

3 years from the date of allotment of each individual unit

Correct answer
B

3 years from the date of original investment even in case of subsequent purchases
C

5 years from the date of allotment of each individual unit
D

If tax exemption is NOT availed, there will not be any lock-in period

Why this is the answer

ELSS funds have a 3-year lock-in period from the date of allotment of each unit. For Systematic Investment Plan (SIP), each installment has its own 3-year lock-in period.

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