Top 5 Best ELSS Tax Saving Mutual Funds to invest in 2015

Top and Best ELSS Mutual Funds to invest in 2015Top 5 Best ELSS Tax Saving Mutual Funds to invest in 2015


Last year, I have written best ELSS mutual funds to invest in India for 2014. These mutual funds have extremely done well and some of them gave extra-ordinary returns. From this year onwards, Govt. of India has increased 80C tax rebate from Rs 1 Lakh to Rs 1.5 Lakhs. If you are in high tax bracket of 30%, you can get tax rebate of as high as Rs 45,000 in a year. Since 2015 is fast approaching, I thought, I would review and recommend top and best ELSS tax saving mutual funds in India to invest for 2015 too.

Also Read: How you can save income tax u/s 80C and beyond?

What are ELSS Tax Saving Mutual Funds?


If you are already familiar about this, you can skip this section. Equity Linked Mutual Funds (ELSS), commonly known as Tax Saving Mutual funds primary objective is to provide tax rebated u/s 80C (Tax rebate u/s 80C is Rs 1.5 Lakhs from Financial year 2014-15 onwards) along with providing good returns. You can invest more than Rs 1.5 Lakhs, however they do not qualify for 80C rebate beyond this limit. They have a lock-in period of 3 years from the date of investment. However, you can keep them beyond 3 years too for long term investment.

Advantages of investing in ELSS Tax Saving Mutual Funds?


  • Offers highest returns (not fixed and not guaranteed) compared to PPF and NSC.
  • Lowest lock-in period of 3 years. NSC has 5 years and PPF has 15 year lock in period.
  • Investors can opt for dividend option and get regular income even during the lock-in period.
  • Investing in ELSS funds through SIP every month would help you reduce burden of investing lump sum, take care of market fluctuations and provide higher returns.

Top 5 Best ELSS Tax Saving Mutual Funds to invest in 2015


These top 5 mutual funds in India have been analysed and shortlisted based on below key parameters.

  • These are picked based on highest returns received in the last 5 years
  • Which are rated by Crisil as Rank-1, Rank-2, Rank-3 and Rank-4 which indicates good fundamentals for these top 5 mutual funds.
  • Value research (VRO) rated these mutual funds as 5 star and 4 star.
  • AUM (Assets under management) > 100 Crores. This proves investor confidence among these top 5 mutual funds.

Top-1: Reliance Tax Saver ELSS


Strategy of the fund: The mutual fund scheme aims to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments and provides tax saving u/s 80C.

Performance of the fund: As per our analysis, this is Top-1 ELSS mutual fund which has beaten even equity mutual fund returns. It has generated 100% returns in last 1 year and 22% annualized returns in last 5 years. If one would have invested Rs 1,000 per month through SIP, for 5 years the investment would have been Rs 60,000 and your money would have grown to Rs 120,000. If one would have invested Rs 1,000 per month through SIP, for 3 years the investment would have been Rs 36,000 and your money would have grown to Rs 68,000.

Reasons to invest: This fund consistently beats its peer mutual fund schemes and its benchmark. AUM of this scheme is Rs 2,940 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-1 and Value Research rates this as 5-Star (5 out of 5).

Also Read: How Opportunity Mutual Funds grow your money in various market conditions?

Top-2: ICICI Pru tax Plan


Strategy of the fund: This fund invests in large cap up to 65% of its portfolio and balance in mid-cap companies. Its investment strategy is to invest for 3 to 5 years in growth companies across market capitalization.

Performance of the fund: As per our analysis, this is a 2nd top ELSS mutual fund. It has generated 58% returns in last 1 year and 18.5% annualized returns in last 5 years. If one would have invested Rs 1,000 per month through SIP, for 5 years the investment would have been Rs 60,000 and your money would have grown to Rs 106,000. If one would have invested Rs 1,000 per month through SIP, for 3 years the investment would have been Rs 36,000 and your money would have grown to Rs 57,000.

Reasons to invest: This is diversified multi-cap fund with average risk and high growth prospects. One should have this fund in their portfolio. AUM of this scheme is Rs 2,123 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-2 and Value Research rates this as 5-Star (5 out of 5).

Top-3: Franklin India Tax Shield


Strategy of the fund: This fund’s primary objective is to invest in medium to long term in growth companies and provide investors with IT rebate.  It invests in 50 to 55 companies across various market capitalization.

Performance of the fund: This is a 3rd top performing ELSS mutual fund as per our key parameters. It has generated 58% returns in last 1 year and 17.8% annualized returns in last 5 years. If one would have invested Rs 1,000 per month through SIP, for 5 years the investment would have been Rs 60,000 and your money would have grown to Rs 103,000. If one would have invested Rs 1,000 per month through SIP, for 3 years the investment would have been Rs 36,000 and your money would have grown to Rs 58,000.

Reasons to invest: This scheme is from one of the reputed old houses which has vast experience and works well in volatile markets too. AUM of this scheme is Rs 1,303 Crores which shows investor confidence for the scheme. Crisil Ranks this mutual fund as Rank-3 and Value Research rates this as 4-Star (4 out of 5).

Top-4: BNP Paribas Tax Advantage plan


Strategy of the fund: It aims to get long term capital growth by diversifying its portfolio across various sectors.

Performance of the fund: This is the 4th top performing mutual fund under tax saving. It has generated 55% returns in last 1 year and 17% annualized returns in last 5 years. If one would have invested Rs 1,000 per month through SIP, for 5 years the investment would have been Rs 60,000 and your money would have grown to Rs 105,000. If one would have invested Rs 1,000 per month through SIP, for 3 years the investment would have been Rs 36,000 and your money would have grown to Rs 58,000.

Reasons to invest: It has beaten equity mutual funds performance. AUM of this scheme is Rs 250 Crores which shows investor confidence for the scheme. Crisil Ranks this mutual fund as Rank-2 and Value Research rates this as 5-Star (5 out of 5).

Also Read: How to create and invest your emergency fund?

Top-5: Can Robeco Equity TaxSaver


Strategy of the fund: This fund invests in large cap and mid-cap companies and can invest in small-cap as and when the opportunity arises. It invests majorly in financial services and technology companies.

Performance of the fund: This is the 5th top performing ELSS mutual fund as per our analysis. It has generated 50% returns in last 1 year and 16.7% annualized returns in last 5 years. If one would have invested Rs 1,000 per month through SIP, for 5 years the investment would have been Rs 60,000 and your money would have grown to Rs 98,000. If one would have invested Rs 1,000 per month through SIP, for 3 years the investment would have been Rs 36,000 and your money would have grown to Rs 55,000.

Reasons to invest: This fund consistently beats its peer mutual fund schemes and its benchmark. This fund is a consistent performer in rising and falling markets. One should have such funds in their portfolio. AUM of this scheme is Rs 787 Crores which shows investor confidence in the scheme. Crisil Ranks this mutual fund as Rank-4 and Value Research rates this as 4-Star (5 out of 5).

Conclusion: These best ELSS Tax saving mutual funds provides opportunity for individuals who are looking to save tax u/s 80C and also aiming to get higher returns. Since this investment option has several benefits of less lock-in period, highest returns, etc., investors can opt this as one of the best tax saving option.

If you enjoyed this article, share it with your friends and colleagues through Facebook and Twitter.

Suresh
Tax 5 Best ELSS Tax Saving Mutual Funds to invest in 2015

95 comments

  • P.S.Chanda

    What is the limit of investment /month?

  • virendr kr

    Sir I select two elss fund reliance tax saver. And axix long term equity. Which is best.

  • Pradheep S

    Hi Suresh,
    Your blog has really improved my knowledge in investment. Do keep up the good work!
    I earn 8,00000 per annum. Currently all I hold is a ULIP with an annual premium of 50000 and this ends next year. The tax i pay monthly is close to 4k. I would like to invest in a combination of ELSS, PPF and a term insurance to reduce the taxes I pay. What is the best way to do this safely? How much will I be able to bring down the tax I pay?

    • Shobhit Verma

      Hi Pradeep ,

      Though i am not expert as Suresh but i can provide you a bit of your suggestion that might help you in financial planning . One fore most thing ,we should always remember risk and profit go hand in hand . If you go for more profit it also has the greater risk . So make sure that you financial planning should be diverse . It should have the component of higher profit/higher risk as well lesser profit/lesser risk .

      You can save your tax by investing into following combination :

      1) SIP Mutual Funds (HIgh Profit/bit of Market risk 15-16 ROI on an average)
      2) PPF (Lesser profit/lesser risk – 8.75 ROI)
      3) FD (Lesser Profit /lesser risk – 8.75 ROI)
      4) You can also show avail 50% saving on the amount invest in shares for first time under Rajiv Gandhi Saving Scheme.

      There are other ways as well to save the tax .

      Please let me know if it help you anyway .

      Thanks,
      Shobhit

  • M D Desai

    During Feb-mar-2015, Reliance Tax Saver was in top ranking but after marekt fall now its legging behind.
    Can you throw light reasons for not including Axis Tax Saver which is in top ranking and Franklin Tax Shield which is very consistent since last 15 years.

    • Desai, Yes I do agree. These are top funds based on consistent performance, Crisil and Value research ranking. We should not just see downfall which keep happening in stock market. The other 2 funds indicated by you does not fell in top-5 based on my criteria. However ever these are good funds.

Leave a Reply

Your email address will not be published. Required fields are marked *