Invest in these Tax Saving Mutual Funds or ELSS for Better Tax Savings
Many taxpayers start their investments between January and March, which is the end of the financial year. Many investors wanted to invest in an available option under Section 80C of the Income Tax Act. This section allows a maximum tax deduction of up to Rs.1.5 lakh on investments in some specified instruments in a financial year. If an investor wants to invest in the financial year, they can start investing in tax-saving mutual funds, or ELSSs.
Equity-Linked Savings Schemes (ELSSs), or tax-saving funds, help to save income tax under Section 80C of the IT Act. Investors can invest the maximum amount of up to Rs.1.5 lakh in ELSSs and also claim tax deductions on investments every financial year.
ELSS or tax-saving mutual funds, invest in stocks. If you invest in this equity mutual fund for the first time, you should be aware that they have a very high risk. Investors may suffer losses in a bad market because ELSSs don’t provide guaranteed returns as compared to investments like the Public Provident Fund, the National Savings Certificate, etc.
Why One Should Invest in ELSS?
This scheme provides you with a higher return over a long time duration. This scheme invests in stocks, and stocks mostly offer higher returns during a long period of time.
The Equity Linked Savings Scheme has a three-year lock-in period, which is the shortest lock-in period for tax-saving investments. Other investment options under Section 80C are government-backed investments; because of that reason, they mostly come with a longer lock-in time duration.
The most important thing is that ELSSs are an entry point for most investors who start investing in stocks. Investors who start investing with ELSSs and this compulsory lock-in period of three years help them to weather the change in the stock market.
Here is the list of the best ELSS or tax-saving mutual funds to invest in December 2024:
- Canara Robeco ELSS Tax Saver Fund
- Mirae Asset ELSS Tax Saver Fund
- Invesco India ELSS Tax Saver Fund
- DSP ELSS Tax Saver Fund
- Quant ELSS Tax Saver Fund (new addition)
- Bank of India ELSS Tax Saver (new addition)
If you want to start your investment journey, you can consider investing in these ELSSs. Investco India Tax Plan Fund has been in the top third quartile for the past five months. Canara Robeco ELSS Tax Saver Fund has been in the top third quartile for the past four months, and the scheme had been in the top fourth quartile before. Mirae Asset ELSS Tax Saver Fund has been in the top third quartile for the last 10 months.
