Equity-linked savings scheme, commonly known as ELSS funds, is a 3-year lock-in diversified equity scheme offered by Indian mutual funds. They provide tax benefits under the new Income Tax Act 1961 SC 80C.
Investment in ELSS funds is liable under Section 80C of the Income Tax Act for tax deduction up to Rs 1.5 lakh. Here is the list of Top 5 Tax Saver Funds in 2019.
Aditya Birla Sun Life Tax Relief 96 –
The scheme seeks long-term capital growth and will invest about 80% of its assets in equity, while the rest will invest in debt and money markets. It was converted to an open-ended scheme from July 1999. The stock selection process will follow a combination of top-down & bottom-up approaches.
One of the oldest ELSS funds, the fund gave a three-star rating for several years, but the performance has improved significantly since 2014, having climbed to a five-star ranking. The fund has consistently overweight the mid-cap relative to this category, with an allocation of about 40 to 50 percent in the large-cap and about 50 percent in the mid-cap in recent times. Overall, this is a fund that improves the midcap for the long haul.
Invesco India Tax Plan – Direct-Growth –
The scheme primarily aims at long-term capital growth from a diversified portfolio of equities and equity-related securities. It intends to invest in market capitalization sectors using a bottom-up approach. The objective would be to focus on a well-researched portfolio, which would be about 20 – 50 stocks.
The fund’s year-over-year returns suggest that it is equally useful in both bull and bear markets. It managed to move significantly below its benchmark during 2008 and 2011 and was uprooted by a large margin in both 2010 and 2014. The fund’s recent large-cap tilt may help mitigate the downside in the event of a market correction — a good option for investors looking for conservative best tax saver mutual fund.
Axis Long Term Equity Fund –
The plan is to generate regular long-term capital growth from a diversified portfolio of equity and equity-related securities. The plan will invest in keen growth businesses and a sustainable business model.
The fund’s investment strategy focuses on the acquisition of shares of value creation. The fund looks for better and scalable businesses, higher returns on capital and secular growth when selecting stocks. If you own quality companies, there is an excellent multi-cap option.
ICICI Prudential Long Term Equity Fund (Tax Saving) –
The scheme appreciates long-term capital by investing approximately 90 percent of the portfolio in equity instruments, while the remaining 10% will invest in debt and money market tools and cash (including money at call).
L&T Tax Advantage Fund –
The scheme primarily aims at long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities.
Purpose of Investment: The goal is to create a long-term capital savings scheme by investing mainly in equities and related securities and providing tax benefits under Section 80C of the Income Tax Act, 1961: Suitable for: Long term wealth creation solutions.
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