Got some money in hand, be ready its time to pay Taxes. Everyone feels the tax is an axe on their income and wandering around to find some TIPS to save it. In India, the government has come up with an amazing scheme. Its called SAVE TAX for WEALTH CREATION - Deduction under Income Tax Section 80C.


TIPS

How to save income tax under section 80C - ELSS

There are various options to save income tax under section 80C. But, today we will discuss the Best Tax Saving Option: Equity Linked Saving Scheme or ELSS. An equity-linked savings scheme (ELSS) is an equity mutual fund that invests at least 80% of its total assets in equity and equity-related instruments. Note: Return on ELSS are presently taxed under LTCG (Check Mutual Fund Offer Documents and Income Tax notifications before investing).   

Why ELSS is the Best Tax Saving Option?

  1. Tax saving - ELSS helps you to save tax up to ₹46,800 based on your tax bracket. I would personally recommend starting investing in ELSS the day your salary becomes taxable. You already have PF as a debt investment. So additional PPF may not be required.
  2. Equity for Beginners - As a beginner we all are excited about equity but as soon as volatility entries our portfolio we start moving to debt. But, the lock-in period helps us learn patience and create long term compounding generating higher returns (based on market conditions).
  3. Lowest lock-in period - Investing for quick liquidity. ELSS has the lowest lock-in of 3 years, within other available tax saving options. 
  4. Best for Last Minute Investors - Need instant Investment Proof: ELSS are just for YOU 😊
  5. Planning for Systematic Investment (SIP) - ELSS might be your most convenient and tax-efficient option. 


Top ELSS Mutual Funds for SIP

Below are present top performing ELSS funds for SIP. 
Always remember the performance and rating of funds keep on fluctuating from time to time. 
I have already discussed on Mutual Funds and  How to select the best mutual fund ? in my previous post. Read them before investing in ELSS Mutual Funds. 

Mutual fund investments are subject to market risks.
Please read the offer document carefully before investing.
ELSS
Source: Valueresearchonline


My personal favourite: 

  • Aditya Birla Sun Life Tax Relief '96 (Direct Plan) - It's an old fund (considering its regular plan) with a good compounding record of ~19%. Also, they provide free term insurance with SIP. Would you like to miss something for free? 
  • Axis Long Term Equity Fund (Direct Plan) - Great fund with a good portfolio and track record of ~19%. Also, the total expense ratio (TER) is reasonably low. 



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