Invest in These Best Tax Saving Mutual Funds or ELSS in January 2025
Equity Linked Savings Scheme (ELSS) is a type of mutual fund that helps investors save on income tax while investing in the stock market. Many taxpayers invest during the last three months of the financial year (January-March).
Most of the investors seek the investment, which is available under Section 80C of the Income Tax Act 1961. On investment in a few particular instruments, Section 80C of the Income Tax Act allows a tax deduction of approx. 1.5 lakh in a financial year. If investors consider investing in this financial year to save taxes, they can invest in tax-saving mutual funds, or ELSSs.
ELSS funds mainly invest in publicly traded firms’ stocks. The stocks in ELSS come from companies of different sizes, such as large, medium, and small companies and various industries. These funds aim to optimize long-term wealth growth. The fund managers choose stocks after doing market research to achieve the best risk-adjusted portfolio returns.
Most of the ELSS schemes allow investors to begin their investment with as little as Rs. 500. This allows you to start investing without needing to save up a large amount of money. Many investors consider the SIP method because it allows them to invest in small amounts and get tax benefits along with a chance to create wealth.
Why Invest in Tax Saving Funds or ELSS:
These funds have the capability to provide a higher return over a long time because tax-saving funds invest in stocks, and stocks usually give higher returns for a long time duration.
ELSS funds have the shortest lock-in period of 3 years as compared to other tax-saving investments. After the 3-year lock-in period, you can choose to keep your investment for as long as you want. Many investment options under Section 80C are government-backed investments, which usually come with longer lock-in periods. For most investors, ELSS is a starting point to begin investing in stocks.
Best tax-saving mutual funds of ELSS to invest in January 2025:
- Invesco India ELSS Tax Saver Fund
- DSP ELSS Tax Saver Fund
- Canara Robeco ELSS Tax Saver Fund
- Mirae Asset ELSS Tax Saver Fund
- Quant ELSS Tax Saver Fund (new addition)
- Bank of India ELSS Tax Saver (new addition)
If you want to invest in these schemes, you can consider investing in these best tax-saving mutual funds of ELSS. From these funds, the Invesco India Tax Plan Fund has been in the top third quartile for the past six months. Before that, the scheme had been in the top fourth quartile. Canara Robeco Equity Tax Saver Fund has been in the top third quartile for the past five months. Before that, the scheme had been in the top fourth quartile. Mirae Asset Tax Saver Fund was in the top third quartile for the past eleven months.
