elss funds

ELSS Funds are Here to Give You Capital Appreciation and Tax Benefits

If you are someone who wants to reap the maximum returns while availing the tax benefits, you better know about ELSS Funds. That’s right! These are the types of equity mutual funds that allow you to save tax alongside giving the assurance of maximum returns. Stands for Equity Linked Savings Scheme, these tax saving funds are ideal for wealth management purpose by continuing your investment after 3 years.

Well, ELSS funds is not only a disciplinary form of investment but it also helps in capital appreciation and tax exemptions. The whole process starts from investing in a Systematic Investment Plan (SIP), which is as low as 500. However, there is no maximum limit of investing in SIP, it solely depends upon an investor how much money he/she wants to park in such a scheme. Moreover, if an investor wants to exit from the scheme, he/she can do it by selling it after 3 years.

Now, let’s just take a look at few of its benefits in the article below.

  • A perfect investment instrument to grow your money in the equity market
  • Long term capital gains from these tax free funds
  • It is the only tax-free investment that comes with a minimum lock-in period of 3 years
  • An investor can also select a Dividend Payout option, thereby realizing some potential gain during lock-in period
  • Investment through SIP brings down discipline in your tax planning approach
  • Better performance compared to other investment instruments

For your better understanding below is an example showing the comparison of with and without ELSS….

Without ELSS/80C Tax Saving Investment

  • Gross Total Income:₹ 7,50,000
  • Deductions under sec-80 C:Nil
  • Total Income:₹ 7,50,000
  • Total Taxable Income:₹ 77,250
  • Tax Saved:Nil

With ELSS/80C Tax Saving Investment

  • Gross Total Income:₹ 7,50,000
  • Deductions under sec-80 C:₹ 1,50,000
  • Total Income:₹ 6,00,000
  • Total Taxable Income:₹ 46,350
  • Tax Saved:₹ 30,900

Well, after comparing both the situations it can easily be seen that ELSS allows an individual to save tax. However, the amount of the same varies from individual to individual. Here, we have done the tax calculations of a male individual aged less than 60 years in receipt of salaried income for the assessment year 2017-2018.

Now that you know what these tax saving funds are all about and how they function and allow you to save tax. Here comes another dilemma, i.e. which ELSS funds are best to invest?I am sure, you are also curious to know the same, don’t you? So, let’s just solve this query also by letting you about these funds.

For your reference, we have listed below few top-performing funds so that you can easily make your pick. Just read the article below.

HDFC Retirement Savings Fund – Equity Plan

  • NAV:15.57
  • Return Since Inception:34.07%
  • Started On:25 February, 2016
  • 1 Year Return:19.37%
  • 1 Year SIP Return:22.55%
  • Minimum Investment:₹ 5,000
  • Exit Load:Nil-1%
  • Expense Ratio:2.85%
  • Horizon:Long Term Horizon
  • AUM:₹ 270.91 Cr
  • Fund Manager: Chirag Setalvad, Shobhit Mehrotra & Rakesh Vyas

Portfolio HoldingsHDFC Bank Ltd. (8.76%), Reliance Industries Ltd (5.78%), ICICI Bank Ltd (5.53%), Larsen & Toubro Ltd (4.63%), State Bank of India (3.92%), Aurobindo Pharma Ltd (2.6%), Tube Investments Of India Ltd. (2.55%), Indusind Bank Ltd (2.43%), Power Grid Corpn. Of India Ltd (2.18%), Carborundum Universal Ltd (2.11%)

Sectoral Holdings: Financial (27.29%), Energy (11.59%), Automobile (7.82%), Engineering (6.4%), Chemicals (6.1%), Construction (5.53%), Technology (5.34%), Cons Durable (5.28%), Metals (5.16%), Healthcare (4.3%)

Mirae Asset Tax Saver Fund

  • NAV:15.01
  • Return Since Inception:27.5%
  • Started On:28 December, 2015
  • 1 Year Return:28.38%
  • 1 Year SIP Return:29.97%
  • Minimum Investment:₹ 500
  • Expense Ratio:2.60%
  • Horizon:Long Term Horizon
  • AUM:₹ 506.75 Cr
  • Fund Manager: Neelash Surana

Portfolio HoldingsHDFC Bank Ltd. (7.93%),  ICICI Bank Ltd (5.62%), Grasim Industries Ltd (3.86%),Kotak Mahindra Bank Ltd.(3.7%),  Indusind Bank Ltd (3.57%) Tata Steel Ltd. (3.23%), Maruti Suzuki India Ltd (3.22%), Havells India Ltd. (3.13%), Larsen & Toubro Ltd (2.91%), State Bank of India (2.76%)

Sectoral Holdings: Financial (29.95%), Automobile (9.6%), Healthcare (7.61%), Chemicals (6.8%), FMCG (6.04%), Metals (5.93%), Engineering (5.68%), Services (5.67%), Energy (5.44%), Diversified (3.86%)


Disclaimer – Mutual Funds are subject to market risks. Please read the scheme related documents carefully before investing.


Leave a Reply

Your email address will not be published. Required fields are marked *