Clarificatory Notification on ELSS (Notification 259/2005) dated 13 Dec, 2005

The CBDT has issued a clarificatory notification amending the earlier issued ‘Equity Linked Savings Scheme, 2005’.

The first part pertains to the amendment of the definition of ‘year’. A year will now refer to a year commencing from the date of allotment or holding of units (as against the earlier definition of year meaning an year commencing from 1st April)

The second part of this amendment inserts a new clause to include open-ended plans. The Unit Trust or other mutual funds can operate one open-ended equity linked saving plan, subject to the prior approval of SEBI. The intention it appears is not to restrict the equity linked saving plans to close-ended schemes only; and at the same time allow the existing open-ended schemes to continue to be operational.