One of the most crucial elements of financial planning is tax savings. In India, taxpayers can take advantage of tax deductions under section 80C of the Income Tax Act through a variety of tax-saving options. One such well-liked investment choice that offers both growth potential and tax advantages is mutual funds. The top 5 Indian mutual fund schemes that are tax saving mutual funds for investors to think about for the current fiscal year are covered in this blog.
Open-ended equity-linked savings plans (ELSS) that qualify for Section 80C tax deductions up to Rs. 1.5 lakh are known as tax-saving funds. The mandatory lock-in period for ELSS funds is the shortest among other tax-saving options, such as PPF, EPF, etc.; it is only three years. They are therefore extremely adaptable for investors.
In India, one of the top-performing ELSS funds is the Axis Long-Term Equity Fund. In both short- and long-term timeframes, the fund has continuously beaten both the category average and its benchmark index. The fund’s primary objective is to make investments in reputable large-cap firms with promising future development. Over the past ten years, the fund has produced annualized returns of more than 15%.
Mirae Asset Tax Saver Fund is another popular choice for tax saving. The fund follows a blend of growth as well as value investing strategy. It focuses on investing in high-quality mid-cap companies which are available at reasonable valuations. The fund has outperformed its benchmark index over short as well as long-term periods. The fund has delivered over 16% annualized returns in the last 10 years.
Canara Robeco Equity Tax Saver Fund is a large cap-focused ELSS fund. The fund invests predominantly in large-cap companies with strong fundamentals as well as growth potential. It follows a bottom-up stock selection approach. The fund has consistently outperformed its benchmark index over short as well as long-term periods. The fund has delivered over 15% annualized returns in the last 10 years.
SBI Magnum Tax Gain Fund is a diversified ELSS fund. The fund follows a blend of growth as well as value investing strategy. It makes investments in small-, mid-, and large-cap businesses. The fund has delivered over 14% annualized returns in the last 10 years. It focuses on investing in companies with strong brands, robust balance sheets as well as experienced management.
UTI Tax Savings Fund is a large cap-focused ELSS fund. The fund predominantly invests in high-quality large-cap companies. It follows a bottom-up stock selection approach. The fund has consistently outperformed its benchmark index over short as well as long-term periods.
ELSS or equity-linked saving schemes are one of the best exit load on mutual funds instruments available in India. The above-mentioned 5 ELSS funds have consistently outperformed their benchmark indices as well as category averages over long periods of time. They provide an opportunity to save taxes up to Rs. 1.5 lakh in a financial year along with capital appreciation. Investors looking to maximize their tax savings can consider investing in these top-performing ELSS funds through the SIP route for long-term wealth creation. Regular investments in such tax-saving mutual funds can help create a sizable corpus over the years.