Top 5 Best Tax Saving Mutual Funds or ELSS Funds for 2019-2020

Top 5 Best Tax Saving Mutual Funds or ELSS Funds for 2019-2020Top 5 Best Tax Saving Mutual Funds or ELSS Funds for 2019-2020


Many of the employees or business men would have started their tax saving exercise now. There are various tax saving investment options to get a tax benefit u/s 80c and beyond. One of the popular tax saving investment options u/s 80C is investing in tax saving mutual funds. While one would get tax benefit up to Rs 1.5 Lakhs they would also benefit with high returns. Which are the Top 5 Tax Saving Mutual Funds or ELSS Funds to invest in 2019-2010? Which are the Best Tax Saving Mutual Funds for 2019 that can provide high returns post categorization of mutual fund schemes by SEBI in April/May-2018?

Also Read:Best Mutual Fund Schemes that gave 30% annualised returns in the last 5 years

What are Tax Saving Mutual Fund Schemes or ELSS Funds?


If you are already aware about ELSS tax saving funds, you can skip this section.

Tax Saving Funds popularly known as ELSS Funds are equity mutual fund schemes that qualifies for tax deduction upto Rs 1.5 Lakhs u/s 80C as per income tax act. These tax saving Funds have lock-in period of 3 years. Beyond 3 years, investors can continue to invest. The ideal period of investment should be 8 to 10 years to get good returns.

Who can invest in these ELSS Mutual Fund Schemes?


While there are several other tax saving investment options like PPF, Tax saver FD schemes, VPF etc., these are for conservative investors who look for safety and compromise on returns. ELSS Funds though offer tax benefits, these are risky, as they invest in equity / stocks. If you are high risk investors and willing to take the risk for higher returns, you can invest in these Tax Saving Mutual Funds for 8 to 10 years tenure.

How we filtered these Tax Saving Mutual Funds or ELSS Funds?


Below are some of the key parameters considered while filtering these funds.

1) Funds selected that have outperformed in the last 5 years, 3 years, 1 year have been considered.

2) Preference is given to the highest performance in the last 10 years. This shows that such funds has been performing well in the last 8-10 years.

3) Selected mutual funds that quickly bounced back from the recent fall in the stock market.

4) Selected funds that have the highest rating from Value Research and Crisil.

5) Considered mutual funds that appreciated in the highest value if invested in lump sum in the last 3-5 years.

6) Filtered Funds that have Assets under management (AUM) of more than Rs 100 Crores which shows investor confidence.

Top 5 Best Tax Saving Mutual Funds or ELSS Funds for 2019-2020


Here are the top tax saving mutual funds list.

#Top-1 – Axis Long Term Equity Fund


Investment Strategy: This mutual fund aims to generate regular long term capital growth from a diversified portfolio of equity and related securities.

Funds Performance: This fund gave 20% annualized returns in the last 5 years, which is highest in ELSS funds. If you have invested Rs 1 Lakh 3 years back, your investment would have grown to Rs 1.35 Lakhs. If you have invested Rs 1 Lakh 5 years back, your investment would have grown to Rs 2.5 Lakhs. If you would have invested Rs 1,000 per month through SIP for 5 years, your investment amount would have been Rs 60,000 (Rs 1,000 x 60 months) and your investment would have grown to Rs 80,200.

Reasons to invest: This fund was able to bounce back in the last 3-6 months and reduced its losses which we have seen in ELSS funds due to market volatility. This fund outperformed among the ELSS fund category. This fund is rated as 5 star (5 out of 5) by value research and Rank-2 by Crisil. This is one of the Best Tax Saving Mutual Funds for 2019-20.

#Top-2 – Aditya Birla Sun Life Tax Relief 96


Investment Strategy: The MF scheme seeks long-term capital growth and will invest approximately 80% of its assets in equity and balance would be a invested in debt and money market instrument. A combination of top down & bottom up approach will be followed in the stock selection process.

Funds Performance: This fund gave 19% annualized returns in the last 5 years, which is 2nd highest in ELSS funds. If you have invested Rs 1 Lakh 3 years back, your investment would have grown to Rs 1.4 Lakhs. If you have invested Rs 1 Lakh 5 years back, your investment would have grown to Rs 2.4 Lakhs. If you would have invested Rs 1,000 per month through SIP for 5 years, your investment amount would have been Rs 60,000 (Rs 1,000 x 60 months) and your investment would have grown to Rs 81,200.

Reasons to invest: This fund too was able to bounce back in the last 3 months during market volatility. This fund outperformed among the ELSS fund category even in the last 5-10 years. This fund is rated as 5 star (5 out of 5) by value research and Rank-1 by Crisil.This is one of the Top Tax Saving Mutual Funds in India to invest.

#Top-3 – Invesco India Tax Plan


Investment Strategy: The scheme expects to generate long-term capital growth from a diversified portfolio. It will aim to have concentrated well researched portfolio, which would be around 20 – 50 stocks.

Funds Performance: This fund gave 18% annualized returns in the last 5 years, which is the 3rd highest in ELSS funds. If you have invested Rs 1 Lakh 3 years back, your investment would have grown to Rs 1.35 Lakhs. If you have invested Rs 1 Lakh 5 years back, your investment would have grown to Rs 2.3 Lakhs. If you would have invested Rs 1,000 per month through SIP for 5 years, your investment amount would have been Rs 60,000 (Rs 1,000 x 60 months) and your investment would have grown to Rs 80,300.

Reasons to invest: When the majority of the ELSS funds have been falling, this fund has able to sustain the invested amount in the last 1 year under current market volatility. This fund outperformed among the ELSS fund category in the last 10 years and gave 19% annualised returns. This fund is rated as 4 star (4 out of 5) by value research and Rank-1 by Crisil.This is one of the good ELSS Tax Saving Mutual Funds to invest now.

#Top-4 – Franklin India Taxshield Fund


Investment Strategy: The fund aims to provide tax benefits and medium to long term growth of capital. The scheme invests in equities and there is an exposure to PSU Bonds and debentures and Money Market instruments.

Funds Performance: This fund gave 16% annualized returns in the last 5 years and 18% annualized returns in the last 10 years. If you have invested Rs 1 Lakh 3 years back, your investment would have grown to Rs 1.3 Lakhs. If you have invested Rs 1 Lakh 5 years back, your investment would have grown to Rs 2.1 Lakhs. If you would have invested Rs 1,000 per month through SIP for 5 years, your investment amount would have been Rs 60,000 (Rs 1,000 x 60 months) and your investment would have grown to Rs 77,000.

Reasons to invest: This fund outperformed in the last 5-10 years in terms of returns. This fund is rated as 3 star (3 out of 5) by value research and Rank-3 by Crisil.This is one of the Best ELSS funds to invest now in 2019-2020.

#Top-4 – ICICI Prudential Long Term Equity Fund (Tax Saving)


Investment Strategy: The mutual fund scheme aims for long-term capital appreciation by investing approximately 90% of the investment in equity instruments and balance 10% in debt and money market instruments.

Funds Performance: This fund gave 16% annualized returns in the last 5 years and 20% annualized returns in the last 10 years. If you have invested Rs 1 Lakh 3 years back, your investment would have grown to Rs 1.3 Lakhs. If you have invested Rs 1 Lakh 5 years back, your investment would have grown to Rs 2.1 Lakhs. If you would have invested Rs 1,000 per month through SIP for 5 years, your investment amount would have been Rs 60,000 (Rs 1,000 x 60 months) and your investment would have grown to Rs 78,000.

Reasons to invest: This is one of the top performing mutual fund in the last 10 years with 20% annualized returns. This fund is rated as 3 star (3 out of 5) by value research and Rank-2 by Crisil. This is one of the best tax saving mutual fund to invest for long term of 8-10 years.

Note that some of the tax saving funds like Motilal Oswal Long term equity fund has been recommended by several mutual fund experts now. However, this fund was launched in 2015 and not completed even 4 years, hence we have not considered this in our Top ELSS funds list as of now.

Summary of Top / Best Tax Saving Mutual Funds or ELSS Funds to invest in 2019-2020

List of Top 5 Best Tax Saving Mutual Funds or ELSS Funds for 2019-2020

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Top 5 Best Tax Saving Mutual Funds or ELSS Funds for 2019-2020

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

13 Comments

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  1. Suresh ji,

    In my folio axis long term equity and ABSL tax relief 96 is already very high amount invested .
    Can i consider Mirae Asset tax saver for tax investment in present market for next few years

    rgds.

  2. Dear Sir,

    Please suggest any 3 top ELSS funds to invest now.. Many Thanks.

    1. Hello Anantha, you can select any of the 3 funds indicated in this article. All the best

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