Tax-saving investments are crucial for securing a stable financial future and optimizing wealth in the ever-changing world of personal finance. Equity Linked Savings Scheme, or ELSS Funds, have become a well-liked option among the available options for Indian investors.

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What Is ELSS?

ELSS Funds are tax-efficient mutual funds available in India. They combine Section 80C tax deductions with the advantages of equity investments. ELSS is a well-liked option for long-term investors due to its 3-year lock-in period, potential for significant returns, and tax savings. It primarily invests in equity and other equity-related investments.

This is one of the most advantageous tax-saving investments available. ELSS funds strike the perfect balance between tax savings and wealth creation.

ELSS Mutual Fund Tax Benefit

The essential advantage of investing in ELSS Mutual Funds is that they offer tax benefits.

• Tax deductions in the investment are only available in the ELSS mutual fund under Section 80C.
• By investing in an ELSS, you can deduct up to Rs. 1.5 lakh in taxes, which can result in savings of up to Rs. 46,800.
• Moreover, the ELSS mutual fund is a long-term investment, and it is locked for 3 years, so you cannot redeem it during that period.
• Long-term capital gain tax is 10% of what you earn; however, if your gain is less than Rs. 1 lakh, you are exempt from paying tax.
• Investing in a diverse portfolio of stocks from various industries and market capitalizations allows ELSS funds to mitigate risk and lessen the effects of volatility.

Read More:-What Are ETF Funds?

Top 5 ELSS Funds Available In India

Numerous ELSS funds are available in India. However, you can choose to invest in the top 5 ELSS funds.

Axis Long-Term Equity Fund

Within the ELSS mutual fund category, the largest fund is the Axis Long-Term Equity Fund. The fund allocates 65–70% of its capital to the top 100 companies in India.

Invesco India Tax Plan

This mutual fund that saves taxes adheres to a growth strategy at a reasonable price. For long-term investors, the growth at a fair price strategy of the Invesco India Tax Plan makes it a good option.

DSP Tax Saver

DSP Tax Saver Fund alternates between growth and value-based investing strategies based on changes in the market. Among the most dependable mutual funds to invest in is this tax-saving option, as it has demonstrated consistent performance among the funds in this category.

Kotak Tax Saver Fund

Kotak Tax Saver Fund is unbiased toward any specific size of the company because it uses a flexi-cap approach. The fund has been allocating a more significant portion of its assets to mid- to small-cap companies recently.

Mirae Tax Saver Fund

The scheme's goal is to produce long-term capital growth through a diverse portfolio that is primarily composed of equity and equity-related instruments.

Conclusion

Investing in ELSS Funds is a tedious process, but the Equity Linked Savings Scheme is the best way to save your tax. ELSS mutual funds offer tax-saving opportunities and the possibility of higher returns from equity investments, making them a desirable investment choice. Before making an investment decision, it is essential to carefully consider a number of factors, including past performance, the track record of the fund manager, the expense ratio, the risk profile, and the investment horizon.

Moreover, You can also contact us at 7834834444 to learn more about different ELSS funds that would have helped you save your taxes.

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