Best Tax Saving Mutual Funds
ELSS or Equity Linked Saving Schemes are a popular investment avenue for long-term wealth creation. These funds offer tax benefits under Section 80C of the Income Tax Act 1961.
ELSS funds invest in equities across market capitalisation and sectors. They may follow a growth or value style of investing.
Mirae Asset Tax Saver Fund
Mirae Asset Tax Saver Fund is one of the best ELSS funds available in India. It aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity related securities. It also offers a statutory lock-in period of 3 years which is the shortest amongst other ELSS schemes.
This fund has a strong track record and is backed by a process-driven fund house known for its superior risk management skills. It invests in high growth stocks with robust business models and sustainable competitive advantages at reasonable prices.
It has delivered a CAGR of 15.6% since its inception, outperforming the benchmark NIFTY – TRI by a large margin over the last five years. Its portfolio is primarily dominated by large-cap stocks but it also diversifies into sectors like technology, automobiles, energy, FMCG and metals.
The fund manager, Mr Neelesh Surana, invests in companies with a sound business model and a sustainable competitive advantage. He also sticks to a conservative investment strategy that helps the fund retain its capital.
Canara Robeco Equity Tax Saver Fund
The Canara Robeco Equity Tax Saver Fund is the best option for investors looking to create long term wealth in a tax-efficient manner. It has a three-year lock-in period which helps investors to avoid premature redemptions and achieve their investment goals in the long run.
The fund invests in equities with an aim to create superior wealth and generate capital appreciation. It is one of the oldest mutual funds in India and was established by Canara Bank and Robeco Asset Management Company in 2007.
ELSS funds are ideal for investors who have higher risk appetites and want to accumulate wealth over the long run. They have a short lock-in period of 3 years, which allows the fund managers to take strategic asset allocation decisions without any fear of premature redemptions.
Canara Robeco Equity Tax Saver is a growth-oriented fund that invests in large caps. It also goes after sectors that have found favour in the current market context.
ICICI Prudential Tax Saver Fund
ICICI Prudential Tax Saver Fund is one of the best tax saving mutual funds available in the market. It is an equity-based fund with a lock-in period of three years and offers tax benefits up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961.
Its investment objective is to generate long-term wealth creation and tax saving. This scheme invests in a diversified portfolio of equity stocks.
Investors should understand the associated risks before investing in a tax saving mutual fund like this. These funds carry moderately high to high market risk as the value of investments may fluctuate due to numerous factors such as price and volume changes in the stock markets, interest rates, exchange rates, government policies, tax laws and other economic developments.
Moreover, investors should consider the fund’s investment objectives and align their long-term strategies with these objectives. This will help them achieve their goals and also get the maximum benefits from these tax-saving schemes.
HDFC Tax Saver Fund
HDFC Tax Saver Fund is one of the best tax saving mutual funds that can help you grow your wealth over time. The scheme is managed by HDFC Asset Management Company Limited and offers a range of investment options for investors across all stages of life.
This equity-oriented ELSS fund is suitable for investors looking to build long-term wealth and seek capital growth in the medium to long term. This scheme invests in a diversified portfolio of companies with growth potential and sustainable business models.
Moreover, this tax saving fund also provides an attractive rate of return that is immune to market fluctuations. Additionally, it offers a special interest rate for senior citizens.
Investors can also claim deductions on the basis of their investment in this scheme under section 80C of the Income Tax Act. However, it is important to remember that ELSS investments carry risk. It is recommended to take advice from financial experts before investing in these funds.