Meaning

Systematic Investment Plans (SIP) is a method where an assessee can invest fixed amount of funds in mutual funds.

Equity Linked Savings Schemes (ELSS) is a scheme wherein funds are invested in equity which gives a lock in period of 3 years and gives deduction under 80C in Income tax

Advantages of SIP with ELSS

• Tax Benefits – Offers tax advantage under Section 80C up to ₹1.5 lakh 
• Disciplined Investing – Investing regularly keeps investing in a disciplined way.
• Flexibility – Gives us flexibility in terms of investment amount and frequency
• Convenience - It is convenient way to invest in ELSS through SIPs as it can be done online. 
• Diversification – Risk can be minimized here by spreading investment across a variety of assets.
• Compounding – Allows compounding where your investment grows over time and generate returns.
• Rupee Cost Averaging -Lowering your average cost per unit by spreading investments.

Tax Considerations

• Lock-in Period - It gives a mandatory 3-year lock-in period hence assessee cannot redeem its investment before 3 years from the date of investment. 
• Long-Term Capital Gains (LTCG) - Since ELSS has a 3-year lock-in, there is no short-term capital gains tax.
• Tax Rate - TCG on ELSS is taxed at 12.5% (plus applicable surcharge and cess) on gains exceeding ₹1.25 lakh in a financial year. 

Tips to Get Better Returns

• One should start early
• Invest regularly
• Increase SIP amount overtime
• Choose the right fund 
• Utilise Tax Benefits – Deduction U/s 80 C OF 1.5 lakh
• Rebalance portfolio – Shift your  funds to maintain risk level and maximize returns
• Invest for long term, avoid withdrawing early for better returns due to equity’s long-term nature.

Conclusion 

Investing through SIPs is a great way to accumulate wealth over time. By following some basic principles like setting an investment horizon, choosing the right fund, and regular investing, you can get better returns with your SIPs. It can further help you achieve your financial goals and maximize your returns for the future.