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Want to Save Tax and Enjoy High Returns on Your Investment? Choose from These ELSS Funds

Want to invest in an instrument that can help you save tax? Equity-linked Savings Scheme (ELSS), a type of equity mutual fund that invests predominantly in the high return proposition of equity and equity-related instruments, is one of the options you can contemplate on. And, if you want to invest for long and have a high risk appetite, there’s probably none better than ELSS! Having said that, you’ll have to contend with a lock-in period of 3 years, still shorter than competing tax savers.

Coming to the tax-saving part, you can avail tax deduction upto ₹1.5 lakh from your annual gross income in a financial year. The total tax savings could be a maximum of ₹46,800 in a year. In some cases, the tax liability could even be zero! You just need to mention the investment details in a declaration form and submit it to your office. Once the details are verified, the tax deduction will take effect and help you bring home more.

But as a vigilant investor, you should invest in the best ELSS. So, how can you call an ELSS fund the best? Factor in the performance of the fund in the long run, its asset allocation, availability and affordability before coming to the conclusion. The stats & other info provided in this post will only help you make an informed decision.

Performance of Best ELSS Funds Over Different Periods (Lump Sum)

ELSS Funds1-year Return3-year Return5-year Return10-year Return
Tata India Tax Savings Fund14.02%13.91%11.95%13.05%
Axis Long Term Equity Fund13.30%16.03%11.41%-
Mirae Asset Tax Saver Fund13.20%17.25%--
DSP Tax Saver Fund14.91%11.77%10.95%13.04%
Kotak Tax Saver Fund12.13%12.37%9.68%10.90%
Motilal Oswal Long Term Equity Fund12.43%13.39%--

Performance of Best ELSS Funds Over Different Periods (SIP)

ELSS Funds1-year Return3-year Return5-year Return10-year Return
Axis Long Term Equity Fund15.91%11.42%11.61%-
DSP Tax Saver Fund13.55%7.96%10.28%14.03%
Kotak Tax Saver Plan 12.17%7.91%9.55%12.17%
Mirae Asset Tax Saver Fund14.58%10.91%--
Tata India Tax Savings Fund12.76%8.23%10.56%14.19%

Reasons for Choosing These ELSS Funds

  • These funds have mostly outperformed their respective benchmarks
  • Their numbers are way better than the average return of the ELSS category over different periods
  • Assets of these funds are mostly into the stocks of established companies having strong bottom lines and high operational efficiency
  • All these funds are open to subscription by resident Indians across the country
  • The affordability is there as you can invest with an amount as low as ₹500

Where These Funds Have Invested the Money? Let’s Find Out

ELSS FundsPortfolio Composition
Tata India Tax Savings FundAssets are mostly in the stocks of ICICI Bank, SBI, Axis Bank, HDFC Bank, Kotak Mahindra Bank, Infosys, Reliance Industries, Tata Consultancy Services, among others
Axis Long Term Equity FundAssets are invested in HDFC Bank, Bajaj Finance, Kotak Mahindra Bank, Info Edge, Pidilite Industries, etc
Mirae Asset Tax Saver FundThe money is invested predominantly in the stocks of ICICI Bank, HDFC Bank, SBI, Axis Bank, Reliance Industries, Larsen & Toubro, ITC, Tata Consultancy Services, etc
DSP Tax Saver FundThe fund has invested mainly in ICICI Bank, HDFC Bank, SBI, Axis Bank, Infosys, Reliance Industries, BPCL, Larsen & Toubro
Kotak Tax Saver FundThe money is mostly in the stocks of ICICI Bank, HDFC Bank, Axis Bank, Reliance Industries, GSK Consumer Healthcare, Tata Consultancy Services, Infosys
Motilal Oswal Long Term Equity FundICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, HDFC Life Insurance, Larsen & Toubro, United Breweries, Shree Cement form the bulk of the equity holdings
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Note – Data Sourced from Value Research as on Dec 12, 2019

Disclaimer – “Mutual fund investments are subject to market risks. Please read the scheme related documents carefully before investing”.

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