Top 8 Best ELSS Tax Saving Mutual Funds to invest for 2018-2019

 Top 8 Best ELSS Tax Saving Mutual Funds to invest for 2018-2019Top 8 Best ELSS Tax Saving Mutual Funds to invest for 2018-2019


Every year, I am recommending Best ELSS tax saving mutual funds to invest in India. Last year recommended Top ELSS Funds for 2017-2018 which gave returns between 30% to 46% in just 1 year. ELSS Funds are useful for employees or business men who want to save income tax u/s 80C. If you are in the highest tax bracket of 30%, you can get a tax exemption of over  Rs 45,000 in a financial year along with getting good returns. What are ELSS Tax Saving Mutual Funds? Which are the Top 8 Best ELSS Tax Saving Mutual Funds to invest for 2018-2019? Which are the good ELSS Tax Saving Funds to invest now in India?

Also Read: Top 10 Mutual Funds to earn high returns with low risk in 2018

What are ELSS Tax Saving Mutual Funds?


If you are already familiar with this, you can skip this section.

Equity Linked Mutual Funds (ELSS), generally called as ELSS or Tax Saving Mutual funds provide tax exemption u/s 80C upto Rs 1.5 Lakhs along with mutual fund scheme benefits. You can invest upto Rs 1.5 Lakhs to get tax exemption. If you invest beyond it, excess invested amount does not qualify for 80C exemption.

Benefits of investing in ELSS Tax Saving Mutual Funds


1) Investing in ELSS Funds offers a tax exemption upto Rs 1.5 Lakhs u/s 80C.

2) Tax Saving Funds provides higher returns (which are not fixed and are not guaranteed) compared to other tax saving schemes like PPF, NSC, bank saving FD schemes etc.,

3) ELSS funds have low lock-in period of 3 years. Other instruments like NSC has six years and PPF has 15 year lock-in period if you save money in these instruments.

4) Investors have an option to choose dividend option in these ELSS funds. For dividend option, one would get regular dividends (again, not guaranteed) even during the lock-in period of 3 years.

5) Investing in Tax Saving mutual funds by monthly SIP would help individuals save every month instead of a lump sum. You can invest as low as Rs 500 per month through SIP in these ELSS Funds.

Disadvantages of investing in ELSS Funds


1) Tax Saving ELSS funds invest in equities, hence these are risk compared to other tax saving options.

2) ELSS funds have 3 year lock-in period for lump sum and for each and every SIP. As an example, if your SIP is on 1-Jan-18, it has lock-in period of 3 years. Your next SIP is on 1-Feb-18, even this too would have 3 year lock-in period.

Top 8 Best ELSS Tax Saving Mutual Funds to invest for 2018-2019


These top 8 mutual funds to invest in 2018-2019 have been analysed and shortlisted based on key parameters.

1) Picked based on highest returns received in the last 5 to 10 years. Preference given for ELSS funds which are consistent performers.

2) Picked-up ELSS funds that gave highest returns through SIP.

3) Funds that are rated by Crisil as Rank-1, Rank-2, Rank-3 and Rank-4 which indicates good fundamentals for these top 8 tax saving mutual funds. Means these are best ELSS funds as per Crisil rating.

4) Value research Online (VRO) rated these mutual funds as 5 star, 4 star and 3 star. Means these are best ELSS Tax Saving funds as per value research.

5) AUM (Assets under management) > 500 Crores. This proves investor confidence among these top ELSS mutual funds.

Top#1: Reliance Tax Saver Fund


Reliance Tax Saver Fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund: The MF scheme aims to generate L/T capital appreciation from a stock portfolio that is invested predominantly in equity and equity related instruments in India.

Performance of the fund: This is my favorite fund, I have been recommending and which has been consistently performing well. This mutual fund has generated 46% returns in last 1 year and 23% annualized returns in the last 5 years. Since inception this fund gave 17% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 113,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.52 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.8 Lakhs.

Reasons to invest: This fund performed well and gave 23% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-3 (Lowest is better) and Value Research rates this as 3-Star (Higher is better). This is one of the Best ELSS Tax Saving Mutual Funds to invest in 2018-2019.

Top#2: Axis Long Term Equity Fund


axis long term equity Fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund: The ELSS scheme is to generate regular long term capital growth from a diversified portfolio of equity and equity related securities in India. The MF Scheme will invest in a company that has strong growth and sustainable business model.

Performance of the fund: This is the Top-2 ELSS mutual fund which has been consistently performing well. This mutual fund has generated 39% returns in last 1 year and 23% annualized returns in the last 5 years. Since inception this fund gave 20% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 103,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.5 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.8 Lakhs.

Reasons to invest: This fund performed well and gave 23% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-3 (Lowest is better) and Value Research rates this as 4-Star (Higher is better). This is one of the Top ELSS Tax Saving Mutual Funds to invest through SIP in 2018.

Top#3: Aditya Birla SL Tax Relief 96 Fund


aditya birla sl tax relief fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund: This mutual fund scheme aims for long term capital appreciation by investing upto 80% in equity and balance in debt related instruments.

Performance of the fund: This is the Top-3 Tax Saving mutual fund which has been consistently performing well. This mutual fund has generated 46% returns in last 1 year and 22% annualized returns in the last 5 years. Since inception this fund gave 26% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 109,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.6 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.7 Lakhs.

Reasons to invest: This fund performed well and gave 22% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-2 (Lowest is better) and Value Research rates this as 5-Star (Higher is better). This is one of the good Tax Saving Mutual Funds to invest in India in 2018-2019.

Top#4: IDFC Tax Advantage ELSS Fund


idfc tax advantage elss fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund:

Performance of the fund: This is new entrant in our list which is listed now in Top 8 ELSS funds. This mutual fund has generated 55% returns in last 1 year and 22% annualized returns in the last 5 years. Since inception this fund gave 22% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 109,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.6 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.7 Lakhs.

Reasons to invest: This fund performed well and gave 22% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-1 (Lowest is better) and Value Research rates this as 4-Star (Higher is better). This is one of the Best Tax Saving Mutual Funds in India for 2018-2019.

Also Read: Best Mutual Fund Platforms to invest in Direct Mutual Funds

Top#5: Tata Tax Advantage Fund


tata tax saving fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund:

Performance of the fund: Even this fund is new entrant in our tax saving funds list. This mutual fund has generated 47% returns in last 1 year and 22% annualized returns in the last 5 years. Since inception this fund gave 20% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 109,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.68 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.7 Lakhs.

Reasons to invest: This fund performed well and gave 22% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-1 (Lowest is better) and Value Research rates this as 5-Star (Higher is better). This is one of the Best ELSS Mutual Funds to invest in 2018-2019 in India.

Top#6: DSP BR Tax Saver Fund


DSP BR Tax Saver Fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund: The mutual fund scheme aims to generate medium to long-term capital appreciation from a diversified stock portfolio of equity and equity related securities along with tax savings.

Performance of the fund: This mutual fund has generated 38% returns in last 1 year and 21% annualized returns in the last 5 years. Since inception this fund gave 16% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 105,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.6 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.6 Lakhs.

Reasons to invest: This fund performed well and gave 21% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-3 (Lowest is better) and Value Research rates this as 4-Star (Higher is better). This is one of the Top 10 Best ELSS Tax Saving Mutual Funds to invest in India.

Top#7: Invesco India Tax Fund


invesco india tax plan fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund: This mutual fund scheme aims to get capital appreciation and provide tax saving to fund holders.

Performance of the fund: This mutual fund has generated 38% returns in last 1 year and 21% annualized returns in the last 5 years. Since inception this fund gave 16% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 101,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.5 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.6 Lakhs.

Reasons to invest: This fund performed well and gave 21% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-3 (Lowest is better) and Value Research rates this as 3-Star (Higher is better). This is one of the Best Tax Saving Mutual Funds to invest in 2018-19.

Top#8: Franklin India Tax Shield Fund


franklin india tax shield fund - Best ELSS Tax Saving Mutual Funds 2018-2019-min

Strategy of the ELSS fund: The MF scheme aims medium to long term growth of capital along with income tax rebate. This scheme invests in equities and it has good exposure to PSU Bonds, debentures and other debt related instruments.

Performance of the fund: This mutual fund has generated 31% returns in last 1 year and 19% annualized returns in the last 5 years. Since inception this fund gave 24% annualized returns. If you have invested Rs 1,000 per month through SIP, in 5 years the investment would have been Rs 60,000 and your investment value would have grown to Rs 100,000.  If you would have invested Rs 1 Lakh 3 years back, your investment amount would have grown to Rs 1.4 Lakhs. If you would have invested Rs 1 Lakh 5 years back, your investment amount would have grown to Rs 2.4 Lakhs.

Reasons to invest: This fund performed well and gave 19% annualized returns in 5 years. Crisil Ranks this mutual fund as Rank-3 (Lowest is better) and Value Research rates this as 3-Star (Higher is better). This is one of the Best ELSS Mutual Funds to invest now in India.

Also Read: Top 10 Mutual Funds portfolio of largecap, midcap and balanced funds

Summary of all Top 10 ELSS Mutual Funds of 2018-2019


Summary of Top and Best ELSS Tax Saving Mutual Funds to invest for 2018-2019-min

How to buy ELSS funds online?


These are like any other mutual funds. You can login to your mutual fund account and create SIP or invest in lumpsum to buy ELSS funds online.

Should you invest lumpsum or SIP in ELSS Mutual Funds?


No one can time the market. Hence it is always better to invest in ELSS Mutual Funds through SIP. If you cannot invest for 1-2 years, you should atleast for a period of 6-9 months. You can also invest in lumpsum, however, invest for a longer period of 5- 8 years in such case.

Conclusion: If you are looking to save tax savings u/s 80C and want to get highest returns, you should invest in these Top ELSS Tax saving mutual funds.

All the best for your tax saving in 2018-2019 !!!

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Suresh

Top 8 Best ELSS Tax Saving Mutual Funds to invest for 2018-2019

16 comments

  • Rajesh

    Hi Suresh,
    Thanks for nice article.
    For tax exemption am investing in two ELSS funds as SIP
    ICICI-ICICI Prudential Long Term Equity Fund (Tax Saving) – Growth(4k)
    RELIANCE TAX SAVER (ELSS) FUND – GROWTH PLAN – GROWTH OPTION – GROWTH (2k)

    Is it recommendable to go another ELSS or increase in the SIP amount is suggestable?

    Apart above ELSS am investing in few funds, pl suggest whether portfolio is good or any suggestions to change it

    BirlaSoft – ABSL Top 100 Fund – Growth-DIRECT – (Large cap)(2k)
    LNT – L&T Emerging Businesses Fund Direct Growth – (small & Mid cap)(2k)
    HDFC Balanced Fund (G)(2k)

    Thanks in advance,
    Rajesh

  • Sanjay singh

    Thanks for writing, it look good to take the decision for ELSS investment.

    Can you please help me to purchase new SIP and Lumsum ELSS to save the tax in this year. Below are my investment-

    1. Motilal Oswal MOSt Focused Long Term Fund – Direct Growth (10,000 lumsum) invested in Dec 2017

    2. Mirae Asset Tax Saver Fund- Direct Growth (10,000 lumsum) invested in Jan 2018

    3. Axis Long Term Equity Fund- Direct Growth (2000/month SIP) started since Aug 2016

    4. Aditya Birla SL Tax Relief 96 (2000/month SIP) started since Nov 2017

    5. Reliance Tax Saver ELSS Fund- Direct Growth (2000/month SIP) started since Dec 2017

    I am intrested to invest 2000-3000 per month in SIP & 10-20K for Lumsum, Kindly suggest where i can invest the same. Thanks

  • Amit

    Hello Suresh,

    I would like to invest Lumsum 50k amount in ELSS tax saving MF schemeeach year for 5 years. Which ELSS MF scheme is best to invest for Lumsum amt and Is it good time to invest in january 2018 to avail tax benefit under 80c for Financial Year 2017-1018. If you have other possible way then Please suggest me. Thank you.

    • Hi Amit, We cannot time the market, hence I always advice to invest through SIP. However, since you don’t have an option now as you are looking for tax saving, you can go ahead with ELSS funds. Next year onwards, you should plan ahead and invest say Rs 5,000 per month for 10 months from Apr-2018 to Jan-2019 so that you get tax benefit + you are investing over a period of time which can benefit you.

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