Best Tax Saving Mutual Funds: ELSS

Posted by sscorporate In: Mutual Funds No comments

Mutual Funds are one of the best investment schemes available in the financial market today. There have been great returns on investment and the market is flooded with companies that help you get started with the same. Among the most important benefits, it is the tax saving purpose that sounds most exciting. The best tax saving benefits help save tax on your investments and also give you a good return.

Mutual Funds work as pool where money is pooled by the investing company from different investors. This money is then invested by the company into funds which have good returns. There are also top tax-saving mutual funds that help investors pay lesser tax. However there are multiple mutual fund tax benefits that you can avail once you consult the asset management company.

How Mutual Fund help save tax:

Among the best tax saving mutual funds, you can make money by investing in the Equity Linked Savings Scheme. This benefits the tax saver once they have invested a part of the income in a top tax saving mutual fund. Investors can directly claim a tax benefit at the end of the year when they file their income tax returns. Mutual fund tax benefits can be availed by anyone who has an income and wants to make some extra return on his investments.

There are different areas within the mutual fund that people can invest in. These include the money market, equity market, debt market etc. However you must take expert advice to avail the best tax saving mutual funds. One needs to get the right guidance or expert opinion from the market to help them in understanding and selecting from the multiple options available to you. Depending upon your need and tax saving purpose you can have a look at all options. Top tax saving mutual funds can be either long term or short term. They also have different returns depending upon the kind of investment you make.

You should also be careful while you compare different mutual fund tax benefit to pick the best. A thorough and detailed analysis with an expert can help you make the most out of your investment and also help in tax saving purpose.

Most of the tax saving mutual funds are ELSS schemes and make investments in equity markets.

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


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