ELSS or Equity linked savings scheme is one of the best tax saving product available in the market, it has the lowest lock in, easy to cash, managed by a professionally employs and you can even do SIP with a starting amount of Rs. 500 per month. It’s always worthwhile to start saving for taxes as early as possible so that you can enjoy the power of compounding and have enough time to choose right fund. You can save upto Rs. 1, 50,000 under section 80 C.ELSS not only helps you to save taxes under section 80C but also help you use the same amount for your future needs. You should always link some goal to you investment.
Steps to Invest in ELSS:
Once you have decided to save taxes via ELSS, now you much have questions like how to invest in ELSS or which is the best ELSS available in the market or what the steps to follow to invest in ELSS are.
Step 1: Control your Tax slab and taxable income – It’s really important that you have a clear idea about your taxable income and tax slab. This will make clear that under which units you can save taxes and which products are useful to you.
Step 2: Pick the best ELSS – Let’s know how to pick best ELSS funds. You can look into below steps to select it. Past Performance and Age of the fund: Past performance speaks terrific about one’s ability and likelihood for success. Absolutely past performance can’t guarantee future returns, but it gives you suggestion of how the fund manager was able to generate returns during ups and downs of market cycle. Constancy: This is very important for the people who have an investment time limit of medium or long term, a fund can’t be judged based on its 1 year or 6 months returns. XIRR of the fund: XIRR helps in calculating the internal rate of return for planned cash flows. Many of us don’t have lump sum amount to invest hence choose to invest intermittently. By calculation of the XIRR we can further filter best funds.
Step 3: Invest in ELSS online – If you are on step 3 this means you have already chosen the fund. Now it’s the turn to invest. Online mutual fund investment is a trend which you can skip to follow.
- Go to create an account
- Fill in all the required details in personal profile and FATCA form
- Fill in bank details
- Upload a cancel cheque
- YES you have successfully opened an account and now you are ready to invest.
- Click on invest now option on home page and select the fund chosen fund using step 2.
In case you were having some trouble choosing the best ELSS fund. We even have a list for best funds available on our website also.
Best tax saving mutual funds for investment in 2019:
| Fund Name | 1 Year Returns | 3 Year Returns | 5 Year Returns | Net Assets ( Rs. Crore) |
| Tata India Tax Savings Fund | 9.89% | 15.32% | 16.53% | 1,770 |
| Axis Long Term Equity Fund | 7.43% | 15.21% | 17.03% | 18,852 |
| Kotak Tax Saver | 13.41% | 15.82% | 15.47% | 888 |
| ICICI Prudential Long Term Equity Fund | 10.72% | 13.91% | 12.12% | 1,992 |
| IDFC Tax Advantage Fund | 1.95% | 15.74% | 15.10% | 6,193 |
| Invesco India Tax Plan | 5.06% | 14.59% | 15.67% | 835 |
| Aditya Birla Sun Life Tax Relief 96 | 1.19% | 13.55% | 15.75% | 8,599 |
| Franklin India Tax shield Fund | 3.59% | 10.75% | 13.73% | 4,025 |
| L&T Tax Advantage Fund | -0.16% | 13.20% | 12.42% | 3,338 |
| DSP Tax Saver Fund | 9.44% | 14.74% | 14.20% | 5,413 |