The ELSS Funds are Equity Linked Saving Schemes that make it possible for people to save huge money on their tax payments while incurring profit through equities at the same time. There are takers for ELSS Funds by people of every age group and in every profession.
While there are many benefits that come with investing in equities, such investments have to be carried out with care so as to avert long term risks and losses that these investments may otherwise be prone to. For this purpose it is a good idea to be well acquainted with some of the best ELSS Funds that can be invested in.
Equity Linked Savings Scheme or ELSS Funds is an open-ended Equity Mutual Funds that help you save and provide an opportunity to grow money. When almost all equity funds restrain you from paying long-term capital gains tax of 10.4% up to an amount of Rs. 1 lakh, ELSS mutual funds offer tax benefit. That’s why these MF funds are also known as tax saving mutual fund schemes. By investing in ELSS, you can save tax up to Rs. 1.5 lakh as per the Section 80C of IT( Income Tax) Act.
The only catch is here is best ELSS funds comes with a lock-in-period of 3 years. That means every instalment you make towards ELSS is subject to 3 a year-lock-in.
ELSS funds come with huge benefits. The most common reasons for investing in an ELSS fund are:
As there are a plenty of options that offer good investment opportunities like PPF, NSC, FD to name a few. However, the catch is the returns you earn from these investments are taxable. This is where ELSS is exceptional which comes with higher returns that are partially taxable, only if the gains are above Rs 10 lakh.
With the next fiscal year approaching close and responses for equity markets turning positive, investments in ELSS are on the rise. Let’s know some of the best ELSS funds that you can consider for the upcoming year.
ELSS Scheme |
3-year Returns |
5-year Returns |
Axis Long-term Equity Fund |
14.5% |
24.6% |
SBI Magnum Taxgain Scheme |
8.7% |
17.4% |
ICICI Prudential Long-term Equity fund |
12% |
20.1% |
Adity Birla Sun Life Tax Relief 96 |
15.9% |
23.5% |
Reliance Tax Saver Fund |
9.2% |
21.12% |
DSP BalckRock Tax Saver Fund |
14.3% |
20.7% |
Well, the list is not a comprehensive one and it is recommended to do thorough research whenever is investing in these funds.
The Axis Long Term Equity Fund is an ELSS Investment Scheme that was launched in December 2009. This is one of the best investment plans to opt for in order to save on income tax payments every year and there are a number of benefits associated with such an investment.
The Franklin India Tax Shield Fund also ranks among one of the best Equity Funds in the stock market. As the name suggests, this too is an ELSS Funds scheme that can enable investors to incur huge savings from their annual tax payments.
The Franklin India Tax Shield Fund investment options that we offer are certainly worth investing in as these are also investments that are characterised by a lock in period of only three years. The tax savings are pretty substantial, with investors being capable of saving as much as 50,000 INR annually on their income tax payments.
Apart from being able to save on their tax payments, investors can also incur great returns from growth potential that is associated with equities. While it cannot be denied that equities are subject to market volatility, the returns that investors can reap are also very substantive. The long term growth in capital that is typical of ELSS Funds including the Franklin India Tax Shield Fund makes it worth the risk associated with investing in such ELSS Funds in the first place.
It is very convenient to invest in ELSS Funds like the Franklin India Tax Shield Fund. The entire investment procedure is one that can be carried out online in a smooth and efficient manner. Investment applications get processed almost instantly and there is no long drawn out or tedious paperwork to attend to.
Another convenient aspect that is associated with Franklin India Tax Shield Fund investment is the fact that investors can begin investing with an amount as low as 500 INR. This allows investors to test the market volatility and decide whether they would like to continue with the investment for the long term or not.
It is always a good idea to invest in the ICIC Prudential Tax Plan in order to be able to save on income tax payment and incur growth through equities all at the same time. This is an ELSS Fund that has been in existence for quite some time now and caters to the interests of investors of every age group from both salaried and business backgrounds.
There are several benefits that are associated with the ICICI Prudential Tax Plan that are worth keeping in mind for those looking to invest in this at any point of time
The Canara Robeco Equity Tax Saver Fund is highly beneficial for tax payers as it gives them opportunity to save on income tax payments while experiencing growth through equities at the same time. This is an investment plan for which the lock in period is around 3 years.
One can invest an amount as meagre as 500 INR to begin with. It is possible to carry out a Systematic Investment Plan as far as the Canara Robeco Equity Tax Saver Fund is concerned with investments being made in multiples of 500 and 1000.
While the risks that come with such an investment plan can never be wished away, the returns that investors are likely to incur are many more in number. Investors can often end up reaping 50% more of what they had invested in when they choose the Canara Robeco Equity Tax Saver.
The formalities that are associated with signing up for such a mutual funds scheme are very minimal. The application will have to be submitted online along with certain personal and financial details.
It takes three to four months for these details to get verified. Thereafter potential investors are likely to be provided with a username and password with which to access their mutual funds account online and monitor their investments on a daily or monthly basis.
Name of the Scheme |
NAV Date |
Current NAV |
Canara Robeco Equity Tax Saver Regular Growth |
28.12.2016 |
44,7800 |
Canara Robeco Equity Tax Saver – Regular Dividend |
28.12.2016 |
21,4800 |
Canara Robeco Equity Tax Saver – Direct Growth |
28.12.2016 |
45,6400 |
Canara Robeco Equity Tax Saver – Regular Dividend |
28.12.2016 |
30,4700 |
Religare Invesco Tax Plan
The Religare Invesco Tax Plan is a sound ELSS Funds investment scheme that is worth opting for on the apart of business owners and salaried employees who want to make huge savings on income tax payments. This tax plan was launched on 20th November 2006 and is an open ended equity investment option catering to investors of any and every budget.
The minimum amount that can be invested as a part of this scheme is 500 INR and then in multiples of 500 thereafter. The dividends associated with the Religare Invesco Tax Plan are not immune to market risks but are very high.
As is the case with all other ELSS Funds schemes, the lock in period is for 3 years thus making it possible for investors to benefit from the long term appreciation and growth of capital. Signing up for this investment scheme can be done in a matter of minutes as the investment applications are always processed online.
Helpful Resourcess: Income Tax Calculator