Best ELSS / Tax Saving Mutual Fund to Invest in 2022

Current Financial Year is completing soon and as usual practice, now every one is searching for tax saving products to reduce their tax burdens, this post will give you some insights about ELSS or Tax saving Mutual funds. Many of us already investing in PPF, ULIPs, Insurance policies, FDs etc. for tax saving purposes. With so many tax savings options in India, ELSS or Tax Saving Mutual funds stand out the best because they offer benefits beyond tax savings. What are the additional benefits we will get in ELSS / Tax Saving Mutual funds?


What is ELSS / Tax Saving Mutual Fund?


An ELSS or Tax Saving Mutual fund is a Diversified Equity Mutual fund with a lock-in period of 3 years. The only difference with other category of Diversified Mutual funds is the tax benefit along with the gains from Stock markets. It means, ELSS or Tax Saving Mutual fund gives double bonanza to the investors by providing tax exemptions and capital appreciations. Investors can invest lump-sum of through SIP approach into any ELSS or Tax Saving Mutual fund.

Comparison of ELSS / PPF / ULIPs:

Why ELSS / Tax Saving Mutual Funds?

  1. ELSS / Tax Saving Mutual Funds provide tax benefits as well as capital appreciations from the stock market.

  2. Investments in ELSS / Tax Saving Mutual Funds having 3-year lock-in period, which is lowest lock-in period compared to any other Tax saving products like PPF, FDs, Insurance products etc.

  3. Investments in ELSS / Tax Saving Mutual Fund provides tax benefits under Section 80C up to Rs 1.5 Lakhs per annum.

  4. The 5-year track records of ELSS / Tax Saving Mutual Fund showing the highest returns compared to any other tax saving products in India

  5. After 3-year lock-in period, you can continue the investments further with out any lock-in conditions.

Best ELSS or Tax Saving Mutual Funds to Invest in 2022


The following are the good ELSS or Tax Saving Mutual Funds that one can consider to Invest in 2020:

Following Factors Considered in Selection of the above Funds:

  1. Funds with 10 years track record

  2. Funds with AUM more than Rs. 500 crores

  3. Funds with big Fund houses

  4. Funds with returns above the category bench-mark performances from the last 10 years

  5. Funds with 4-star or 5-star rating from the last 5 years

Conclusion:


All Tax Saving products are its own pros and cons. Your investment strategy should be diversified and your portfolio should consists combination of high, medium and low risk investment products. When compared to other Tax Saving products, ELSS or Tax Saving Mutual funds are giving higher returns along with the tax benefits.

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