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Our philosophy is to provide advisory services to make your investments as successful as you.
For us anything worth doing is worth doing well.
 
 
        ELSS IN MUTUAL FUND ....
 
What is ELSS ?
Simply put, ELSS is a type of diversified equity mutual fund which is qualified for tax exemption under section 80C of the Income Tax Act, and offers the twin-advantage of capital appreciation and tax benefits. It comes with a lock-in period of three years.
 
Why should one invest in an ELSS ?
ELSS funds are one of the best avenues to save tax under Section 80C. This is because along with the tax deduction, the investor also gets the potential upside of investing in the equity markets. Also, no tax is levied on the long-term capital gains from these funds. Moreover, compared to other tax saving options, ELSS has the shortest lock-in period of three years.
 
BEYOND TAX SAVING
         
  Parameter PPF NSC ELSS
  Tenure 15 years 6 years 3 years
  Returns (Compounded Annually) 
8.80 % ^
(Compounded
half-yearly) 
8.60 to 8.90 % ^
Not assured dividends/ returns
  Minimum investments Rs.500 Rs.100 Rs.500
  Maximum investments Rs.1,50,000 No limit* No limit*
  Amount eligible for
deduction under Section 80C
Rs.1,50,000 Rs 1,50,000 Rs 1,50,000
  Taxation for interest  Tax free  Taxable Dividends and capital gain tax free
  Safety/ Rating  Highest  Highest  High Risk
         
 
* There is no upper limit on investments. However, investments of only upto Rs.100,000 per year are allowed to be claimed as deductions under Section 80C of IT Act.
 
Features / Benefits of Investing in ELSS Mutual
ELSS Mutual Funds are one of the best tax saving options under Section 80c. Infact, ELSS MF scheme is the only pure investment option under Section 80C through which investors can take exposure to equity markets.
ELSS Tax saving mutual funds come with a lock-in period of three years, the lowest among all the tax saving options that are available under Section 80C. (PPFís lock-in period is 15 years, Tax saving Bank Fixed Depositís is 5 years, National Saving Certificateís is 5 years etc.,)
ELSS falls under EEE tax rule (Exempt-Exempt-Exempt). No taxes are applicable during Contribution-Accumulation-Withdrawal phases. Investments get tax deduction under Section 80C, so you donít have to pay tax on the amount invested in the ELSS fund. The capital gains generated by the fund are also exempt from tax as the investments are not withdrawn. Finally, withdrawals are also tax-free because there is no tax payable on long-term capital gains from equity-oriented mutual funds. The Employee Provident Fund and the Public Provident Fund are the only other investment options that enjoy the EEE tax treatment.
Dividends declared on these schemes are also tax free in the hands of unit-holders (investors)
You can start a SIP in ELSS MF with a minimum investment (as low as Rs 500). Unlike an life insurance, you donít have to commit multi year investments.
There is no upper limit for investment in ELSS but the maximum tax benefit is limited to Rs 1 lakh under Section 80C.
You can start a SIP in ELSS MF with a minimum investment (as low as Rs 500). Unlike an life insurance, you don’t have to commit multi year investments.
 
Top 5 Best ELSS Tax saving Mutual Funds
 
  • Axis Long Term Fund has very high Alpha and Low Fund Risk Grade. This fund has been performing really well for the last 5 years or so. This fund has given 5 year SIP returns of around 35%, one of the highest in ELSS fund category.
  • Franklin India Taxshield Fund is one of my favorite funds. This fund has consistently performed well for the last many years. The standard deviation of this fund is also low. Franklin Taxshield is suitable both for lump sum and SIP investments.
  • ICICI Prudential Tax Plan has ‘average’ fund risk grade. You may have to stomach little bit of volatility to get good returns from this fund. This fund has been performing well for the last 10 years.
  • Canara Robeco Equity Tax Saver Fund has given returns of 21.7% during last 10 years ( on lump sum investment). This is the highest among all the above ten funds. The standard deviation of this fund is also low.
  • Religare Tax Saver Fund has given good SIP returns for the last 8 years.
  • HDFC Tax saver was the darling of many mutual fund investors for a long time. Off-late the volatility has been on the higher side for this fund. It also has very low Alpha ratio. Investors who can afford to take high levels of risk can still prefer HDFC Tax Saver.
  • If you consider Returns as the only criteria to shortlist a fund then Reliance Tax Saver Fund can surely be rated as a top ELSS fund. But when you consider other factors like high Standard Deviation, High Fund Risk Grade, high Beta ratio etc., then your decision might change.
  • TATA Tax Saving Fund‘s standard deviation is the lowest of all. It has ‘low fund risk grade.’ But you can not expect abnormal returns from this fund.
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