What are Tax saving Mutual funds?

Tax saving Mutual Funds also known as ELSS (EQUITY LINKED SAVINGS SCHEMES) are mutual fund schemes where investments get a rebate under sec 80 CC of the Income Tax act. Under section 80 CC of Indian Income Tax Act, individuals & HUF are allowed tax exemption up to Rs. 1.5 Lakh. These schemes (ELSS) are locked in for a period of 3 years from the date of investments. Hence, tax saving mutual funds is a closed ended fund. All returns from these ELSS schemes are tax free.

Other eligible investments under sec 80cc are like NSC, PPF, PF, and ULPI’s. However, ELSS (Equity Linked Saving Scheme) has several advantages-

  • It has a very low lock-in period. Just 3 years. Compared to 15 years for PF and PPF, 7 years for NSC, and over 5 years for LIC/ULIP’s.
  • Returns are far better and can be easily monitored.
  • Unlike PPF. PF and ULIP’s investing each year is not compulsory.
  • To get the benefit of rupee cost averaging investor can use the SIP mode to invest in ELSS.

How can Mutualfundwala help in saving tax?

To foster capital appreciation and wealth creation, Mutualfundwala will assist in selecting the best scheme for ELSS investment. Investors may earn an ROI of over 15% CAGR along with tax saving.

Top 10 (ELSS) tax saving funds

Scheme (Returns as on Sep 13, 2017) 1 Year Return 3 Years Return 5 Years Return
Axis Long Term Equity Fund (G) 20.1% 14.5% 24.0%
Franklin India Tax Shield (G) 14.4% 13.2% 19.6%
Birla Sun Life Tax Plan (G) 21.7% 16.3% 21.7%
Birla SL Tax Relief 96 (G) 22.2% 17.1% 22.5%
DSP-BRTax Saver Fund (G) 22.0% 16.1% 22.4%
SBI Magnum Tax Gain (G) 15.3% 10.6% 17.8%
L&T Tax Advantage (G) 27.7% 15.8% 19.8%
BNP Paribas Long Term Equity (G) 18.9% 12.6% 19.9%
Tata Tax Advantage Fund (G) -10.8% 15.7% 11.6%
UTI Equity Tax Saving (G) 17.0% 10.8% 16.2%