3 Best ELSS Funds to Invest and Save Tax

We are slowly approaching towards the end of financial year and most cumbersome task for every one will come into picture i.e., tax saving. Very soon your company will ask for the investment declaration related to tax savings. Many people make investment in hurry at this point of time without even thinking of the investment plans, return, lock-in period etc. They become so eager to invest the money that they put all their of it either in PPF or in any other xyz policy. Without any proper planning this can be dangerous for you in a longer period of time.

Are you looking for tax saving option?? Are you investing in an ELSS mutual fund to save your taxes?

I always favor to invest money in ELSS (Equity linked saving schemes) for tax saving purpose. To understand it better I have mentioned few benefits of investing in ELSS:

• It is one of the best tax saving options under Section 80C.
• It is pure investment option by which one can take exposure to equity markets under Section 80C.
• It comes with a lock-in period of three years and it is the lowest among all the tax saving options that are available under Section 80C – PPF’s lock-in period is 15 years, Tax saving Bank Fixed Deposit’s is 5 years, National Saving Certificate’s is 5 years etc.
• The returns generated via this investment is tax free as long term capital gain generated through equity mutual fund bears no capital gain if one holds the investment for at least 1 year.
• Dividends declared by ELSS are tax free in the hands of unit-holders i.e., investors.
• In ELSS you can start SIP with minimum investment as low as Rs 500.
• You can fill you investment requirement under Section 80C of Rs. 1.5 lakh via ELSS fund.

Read More: ELSS: Best Tax Saving Tool

Best 3 ELSS Tax Saving Mutual Funds: Many tax saver while investing money in ELSS select scheme via their recent performance. You always need to consider the funds’ long term performances and other important factors too while shortlisting the best funds. Like wise I have selected 3 best funds in which you can invest right now to maximize your returns and minimize your risk.

Read More: Advantages of Mutual Funds for an Investors

Key Points to remember on ELSS:

• Lock-in period of ELSS  is three years only but it is advisable to invest in them with a long-term view only. ELSS is associated with high risk therefore, you will be better off if you invest in them for long term wealth creation perspective only.
• Remember that ELSS has a lock-in period of 3 years and each SIP installment will be locked for 3 years so, you can redeem each SIP after its completion for 3 years. It might be cumbersome when you start redeeming the mutual fund units. But if you are focused for long term then while redeeming your many SIPs have already completed 3 years or you can consider investing once a quarter.
• Go with only 2 or maximum 3 ELSS funds only, don’t go for over-diversification. In the name of diversification do not invest in multiple funds from the same fund category.

ELSS funds don’t come with return guarantee but their past track record tells us that they always beat the traditional options with huge margins over long period of time.

I think I have summed up my points in a defining manner…Hope you all found the above mentioned funds fruitful? Please share your views and comments. Would love to hear from you all….ThankYou!!