Mutual funds are the option of investment which have recently gained popularity and in this type of investment people pool in money and the company invests in the stock market thus every single person is entitled to partial profits gained from the stock and when the stock market takes a hit, the person investing is not affected drastically as the loss is also partial and is shared by all the investors thus the damage done is not that much drastic and hence the risk is not very large.
Investors who are investing in these mutual funds get returns which are subject to income tax mostly. Thus one of the demands that come up from the investors is that how they can save taxes now from the mutual funds and yet get good returns in the long run.
ELSS is an abbreviation for Equity Linked Savings Scheme. This is a scheme which has a three year lock in period and helps to save income tax for up to an amount of 1.5 lacs under the given section of 80C. This scheme invests most of the portfolio in the stock market.
It is basically an equity mutual fund which has capital appreciation as well as tax savings to offer as it is exempted from taxes under section 80C of the Income Tax Act.
The best ranked ELSS mutual funds schemes in which an investor can invest are:
Reliance Tax Saver Fund- Growth : The fund has high a risk and in terms of annualised returns 27.8%, 16.9%, 23.1% in 1,3, and 5 years respectively. The fund has volatility of 22.36%.
JM Tax Gain Fund- Growth : The fund has high a risk and in terms of annualised returns 32%, 16.8%, 21.4% in 1,3, and 5 years respectively. The fund has volatility of 17.31%.
Escorts Tax Plan – Growth : The fund is above average in terms of risk and has returns of 27.6%, 26.0%, and 19.5% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 15.85%.
L&T Tax Saver Fund – Growth : The fund is above average in terms of risk and has returns of 33.0%, 20.4%, and 21.3% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 17.19%.
HSBC Tax Saver Equity Fund – Growth : The fund is above average in terms of risk and has returns of 29.6%, 16.8%, and 21.1% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 17.17%.
Kotak Tax Saver Fund – Growth : The fund is above average in terms of risk and has returns of 28.1%, 19.0%, and 18.4% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 15.59%.
Birla Sun Life Tax Relief96- Growth : The fund has been average in terms of risk. It has predicted to give returns of 22.9%, 19.7%, and 23.0% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 19.2%.
DSP Blackrock Tax Saver Fund – Growth : The fund has been average in terms of risk. It has predicted to give returns of 26.9%, 18.3%, and 22.6% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 20.52%.
Invesco India Tax Plan – Growth : The fund has been average in terms of risk. It has predicted to give returns of 20.7%, 17.2%, and 21.2% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 18.52%.
ICICI Prudential Long Term Equity Fund – Growth : The fund has been average in terms of risk. It has predicted to give returns of 18.1%, 12.30%, and 19.6% in 1, 3 and 5 years respectively. The fund exhibits a volatility of 18.4%.
** All the data as on June 20th 2017.