Investing in mutual funds can be a great option for people all around. But it is lesser known that mutual funds can also help in saving taxes. There is a category of mutual funds that can help you save tax under 80C whenever you file your income tax returns. This is possible with the best Equity Linked Saving Scheme (ELSS)schemes that is a beneficial mutual fund available today. Investors are looking forward to invest more into this segment where elss can help to make money and also save tax.

Although many people may not be aware of this fact and might just look at mutual funds to make money, the options to invest in ELSS have a greater scope. Though it may sound simple at the beginning but the elss schemes have a diverse range.

ELSS and tax benefits:

It has not been very common generally but ELSS is becoming more popular day by day. Investors are looking forward to this kind of investment where they can make money and also save income tax at the end of the fiscal year. The ELSS are generally comprised of small to mid-size stocks. They are listed with the stock exchange so people can be quite reliable about their prospects. When investors choose to invest in ELSS they also need not worry much about the impact costs.

However before getting into the mutual fund, it would be advisable for beginners to take expert opinion form a consulting company. It is important to know the ELSS schemes that are best in the market. Investors can get in touch with the asset management companies that specialize with ELSS schemes and offer a diverse range to investors.

It would also be important to note that when you invest in ELSS you pick only the best options in terms of performance and return on investment. Once you have made the right choice the profit margin can be quite lucrative with lesser risks.

Also while picking the elss schemes you could pick the best domestic or international Asset Management companies that have showed great performance in the recent past.

Types of ELSS

There are two types of schemes under these mutual funds. One is the dividend scheme and the other is the growth scheme. The difference between the two is that in the dividend scheme, if the fund announces dividend then investors get an extra income based on those dividends. These dividends are not subject to tax or lock-in periods and can be withdrawn or reinvested in the fund and will become eligible for tax benefits. There are no such provisions under the growth schemes.

Top Tax Saving Mutual Funds in India

There are a lot of mutual funds that customers can choose from but some of the best tax savings mutual funds in the country right now are:
» IDBI Equity Advantage Direct-G
» IDBI Equity Advantage Direct-G
» Axis Long Term Equity Direct-G
» Birla SL Tax Relief 96 Direct-G
» Birla SL Tax Plan Direct-G
» Birla SL Tax Relief 96-G
» Franklin India Taxshield Direct-G
» Kotak Tax Saver Direct-G
» Axis Long Term Equity-G
» Birla SL Tax Plan-G