Investment
Why Tax-Saving Plans Are Still Popular Despite ELSS Rise?
According to January 2025 reports, the Equity Linked Savings Scheme (ELSS) was considered one of the best tax-saving schemes. Despite impressive figures and trends, many Indians continue to rely on traditional plans, such as PPF, NSC, and life insurance policies.
Traditional tax savings plans have a strong appeal amongst Indian investors for reasons such as steady growth and minimal risk that sometimes surpasses modern investment instruments like ELSS. Let’s understand this better with an example.
When Gunjan Agnihotri, a 31-year-old software engineer from Noida, considered investing in tax-saving instruments, there were two options that confused her. While ELSS seemed to offer decent returns, she felt more inclined towards traditional options like endowment policies. Despite being a modern investor, she could not undermine the security offered in the form of guaranteed returns and long-term discipline.
Just like Gunjan, many investors prefer stability over market-linked risks. In many ways, traditional plans also align with cultural preferences for secure savings. Therefore, despite the rise in ELSS, many Indians still choose traditional tax-saving policies. Let’s understand why tax-saving investment plans continue to be popular despite the rise of ELSS.