Best ELSS Mutual funds to invest for tax savings in 2013


Best ELSS Mutual funds to invest for tax savings in 2013Best ELSS Mutual funds to invest for tax savings in 2013

Many of the investors are doing their tax planning from Apr itself instead of thinking during Dec/Jan. While there are several tax savings investment options, one of the best investment options for tax planning which has potential to provide more returns are Equity Linked Tax saving schemes (ELSS). In this article we would discuss about these equity linked saving schemes and how they can be used to enhance our returns through such investments.

Equity Linked Saving Schemes (ELSS) mutual funds

In simple terms Equity linked saving schemes (ELSS) are those which provide the investor, tax exemption/rebates under section 80C. Under this section, a tax payer can get exemption up to Rs 1 lakh by investing in various investment options like PPF, ELSS, Tax saving FD, NSC etc., However all investment options provide returns around 7% to 8.5% apart from tax saving. Investment in Top ELSS mutual funds provides greater chances to increase your investment apart from getting tax savings.

Where does equity linked saving schemes (ELSS) invest?

ELSS saving schemes invest 65% of its portfolio in equity related investments and are notified to avail tax benefits.

Also Read: Complete guide on National Saving Certificate (NSC) to save tax

Why should you invest in Best ELSS mutual funds?

Chances for higher returns: While you would get fixed returns in other tax saving options, if you invest in Best ELSS mutual funds, the returns would depend upon the equity markets and mutual fund scheme performance and there are greater chances that you would get higher returns compared to other tax saving options.

Tax saving option: Investment up to Rs 1 lakh in ELSS can be claimed for tax rebate under section 80C

Lock-in period helps for higher returns: The lock-in period for ELSS mutual funds are 3 years. For such tenure, there are higher chances that your mutual fund scheme performance generates more returns.

Tax free returns: The returns from all tax saving options except for PPF are not tax free. Means the returns on such investment options are taxable. E.g. The returns from NSC are taxable. It can be claimed thru 80C as deduction which is a different question. Returns from ELSS are tax free as the investment period is 3 years and any returns from equity mutual fund for more than one year is not taxed.

Best ELSS mutual funds to invest for tax saving

We have analyzed 4 best ELSS mutual funds which can be invested for tax planning purpose. However, instead of investing a lump sum amount, invest in these top ELSS mutual funds through SIP to get higher returns.

1) Axis Long Term equity:

  • Axis Long Term equity (qualified for tax saving mutual fund) has been ranked by Crisil as Rank-1 and as 3 Star (Out of 5) by Value research.
  • This scheme has delivered annualized returns of 11.3% in 3 years period and 19.5% in the last 1 year.
  • Assets under management are Rs 369 Crores, end of the last quarter which indicates that it gained investors confidence. This is one of the best ELSS mutual funds.

2) Can Rebeco Equity Tax Saver:

  • Can Rebeco tax saver have been ranked by Crisil as Rank-2 and as 5 Star (Out of 5) by Value research.
  • This scheme has delivered annualized returns of 10.7% in 5 years and 6.5% in 3 years period and 14.6% in the last 1 year.
  • Assets under management are Rs 506 Crores, end of the last quarter which indicates that it gained investors.

Also read: Latest info on Post office saving schemes in India

3) Franklin India Tax Shield:

  • Franklin India Tax Shield has been ranked by Crisil as Rank-2 and as 4 Star (Out of 5) by Value research.
  • This scheme has delivered annualized returns of 7.7% in 5 years and 7.9% in 3 years period and 13.7% in the last 1 year.
  • Assets under management are Rs 905 Crores, end of the last quarter which indicates that it gained investors.

4) Reliance tax saver:

  • Reliance tax saver has been ranked by Crisil as Rank-3 and as 5 Star (Out of 5) by Value research.
  • This scheme has delivered annualized returns of 8.5% in 5 years and 6.5% in 3 years period and 10.9% in the last 1 year.
  • Assets under management are Rs 2104 Crores, end of the last quarter which indicates that it gained investors confidence. This is one of the top ELSS mutual funds in terms of stability.

Invest In Top Tax Saving/ELSS Funds Online Today.

Conclusion: Investment in these best ELSS mutual funds provides tax savings and tax free returns. Instead of investing a lump sum, invest through SIP in these funds from beginning of the financial year and do the tax planning.

Readers, I would invite your views about this article.

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Suresh
Best ELSS Mutual funds to invest for tax savings in 2013


There are 44 comments left Go To Comment

  1. BIPIN KANDARI /

    present port follio
    1000 P/M SIP IN –UTI OPPORTUNITIES- GROWTH
    1000 P/M SIP IN –UTI WEALTH BUILDER SERIES -II -GROWTH
    1000 P/M SIP IN– UTI DEVIDENT YEILD -GROWYH
    500 P/M SIP IN — MNC FUND -GROWTH
    500 P/M SIP IN UTI EQUITY- GRWTH
    500 P/M SIP IN UTI MID CAP -GRWTH
    500 P/M SIP IN SBI MAGNUM EQUITY-GRWTH
    500 P/M SIP IN SBI MAGNUM MID CAP-GRWTH
    PLEASE ANALYSE MY PORT FOLLIO AND COMMENT
    PLANNING TO START SIP TOWARDS ELSS FOR TAX SAVING PURPOSE . YOUR SUGGESTIONS ?

    1. Suresh KP / Post Author

      You can review and exit UTI WEALTH BUILDER SERIES. Others are good. Regd ELSS, you can invest in funds indicated in this article. http://myinvestmentideas.com/2014/12/top-5-best-elss-tax-saving-mutual-funds-to-invest-in-2015/

      1. BIPIN KANDARI /

        sir
        (i) please name the ELSS where i can invest through SIPs
        (ii)what is the maximum extent of investment in ELSS that is eligible for tax exemption ?
        (iii) is it true, that you are allowed to awail tax exemption on ELSS, only once ?
        if i invest 3000 rupees every month in ELSS then how much amount will be exempted from tax and for how long .

        1. Suresh KP / Post Author

          You can invest Rs 1.5 Lakhs u/s 80C and you can invest all 1.5 L in ELSS mutual funds. Check this article about top funds to invest in 2015. http://myinvestmentideas.com/2014/12/top-5-best-elss-tax-saving-mutual-funds-to-invest-in-2015/

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