Top Performing ELSS Mutual Funds for Tax Saving in 2019

Everyone likes getting free stuff on the purchases they make. The joy of getting multiple things for the price of one is just overwhelming. This is one of the major reasons, the popularity of the ELSS mutual funds have increased in the past 1 decade. By investing in these schemes, an investor can enjoy dual benefits of high growth from equity instruments, as well as tax saving benefits on investments up to Rs. 1.5 lakhs. But, a lot of investors are confused regarding the right scheme from this category that can be chosen for optimal growth. So today, we will see the ELSS - Tax Saving schemes, which you can invest in to enjoy great growth.

Aditya Birla Sun Life Tax Relief 96’ Fund (G)

This scheme is one of the oldest schemes of this category and since the inception has secured a position in the top performing mutual funds list. The biggest proof of its exceptional performance is the average annualized return of more than 24% that it has provided since its inception. A great choice for investors with a long-term investment horizon and moderately high risk appetite.

Axis Long Term Equity Fund (G)

This scheme is a perfect tax saving solution for investors who want a stable growth. In the past 1 year, even during extreme volatility, this ELSS scheme showed a great performance by providing Year to Date return of 4.09%. One of the best features of the scheme is its high turnover ratio, which allows it to change the portfolio allocation based on the equity market conditions. This scheme too has been among the top performing ELSS mutual funds from a very long time.

L&T Tax Advantage Fund (G)

This scheme is a great pick for investors who want to invest in a diversified portfolio of equities. L&T Tax Advantage Fund has also shown exceptional performance in the long-term, by providing annual average returns of more than 18% in the past 10 years. One of the main reasons behind its consistency is the exceptional management skills of Mr. Soumendra Nath Lahiri, who is also managing other top performing mutual funds from L&T, such as L&T Midcap Fund, L&T Emerging Businesses Fund, and many others.

DSP Tax Saver Fund (G)

A great choice in the current market phase and the reason for that is its high allocation in the finance sector (38.10%). Now, as you may know, a lot of experts are holding convictions for the growth of this sector in the next 1 year and with the enhancement of cash inflows by the government in PSU banks has increased the chances. So, by investing in this top performing mutual fund scheme, you can enjoy the growth of this sector firsthand. 


These were top performing schemes that you can invest in for saving taxes up to Rs. 43,650 in the year 2019. An added benefit of these schemes is the lock-in period of just 3 years, which is the lowest among all the 80C instruments. So, don’t wait anymore and start your investments now. For hassle free investments in these top performers, you can visit MySIPonline. You can also check the top performing mutual fund schemes from other categories and can create a full fledged portfolio for optimal long-term growth.

Do you want to save tax while investing?

All of us aspire to get something extra within the same price that we pay for a single good. This is a common human tendency which makes us choosy and we search for avenues which can provide maximum satisfaction to our needs according to the money spend for them. But, when it comes to tax planning, we follow the advice of a tax-planner blindly or go by mouth publicity, which is a wrong practice. Investing along with tax saving is a difficult task for all the clients and needs to be taken care of very efficiently. Thus, to resolve the turmoil mutual fund experts have launched a scheme which allows the clients to save their taxes and at the same time enjoy capital appreciation within a single scheme. The scheme is known as ELSS (Equity Linked Saving Scheme). It allows the clients to access a scheme which abides by all the rules defined under the Section 80C of the Income Tax Act.

Understanding ELSS in a better way

Tax saving is an intricate task for the clients who fall into a higher tax bracket. They are confused about the investment mechanisms which will allow them to save tax and provide higher returns on their savings. The general tax saving mechanisms known to people are PPF and NSC. Both these schemes are government sponsored and gives a rate of interest to the clients. These are similar to having a bank account but differ a little bit. But, with two restrictions, namely, restriction on withdrawal and a minimum amount to be deposited every year. On the contrary, mutual funds have launched ELSS with a view to embracing twin benefits to the clients. ELSS allows the clients to invest in mutual funds and avail the benefits of tax saving. ELSS fund enables the client to invest a sum of Rs. 1.5 Lac, which is the permissible tax rebate limit. This means that the clients can invest Rs. 1.5 Lac from the total taxable income of the clients.

How tax rebate is applicable?

ELSS is a scheme defined under the Section 80C of the Income Tax Act. As per this Section, the clients have the right to save tax up to Rs. 1.5 Lac if their annual income exceeds Rs. 2.5 Lac. The clients are free to invest either the entire amount in ELSS scheme or they can diversify their investments between different tax saving options. For example, a client’s annual income is Rs. 5 Lac. The limit on which a client need not pay taxes according to the tax slab is Rs. 2.5 Lac. Tax is chargeable on the remaining Rs. 2.5 Lac. From this sum the client can save extra Rs. 1.5 Lac, so he will have to pay tax on the remaining 1 Lac which will be less as compared to the tax that has to be paid on Rs. 2.5 Lac. The client will benefit the most if he invests the entire amount in the ELSS fund, as it will provide him with better benefits as compared to any other scheme. All government sponsored schemes provide a rate of interest as low as 8% while ELSS scheme provides a return rate of 15%. Along with having a lock-in period of three years ELSS scheme has been rated as one of the tax savers which has a less lock-in period as compared to any other plan.

Thus, investing in mutual funds will not only save your tax but will also enable you to create a corpus for your future needs on the whole. So, if your income falls under the taxable slab then you can surely opt for ELSS scheme. You can also take up the online ELSS investment through My SIP online which will allow you to monitor your funds and investment in a simple manner.

Inside out of the ELSS mutual fund

Are you interested in saving through investing? Then, here is the perfect scheme suiting to your needs. ELSS (Equity Linked Saving Scheme) facilitates to save your taxes via investment. ELSS is a scheme which provides tax-rebate up to INR 1,50,000. The scheme falls under the Section 80C of the Income Tax Act. According to the budget declared for FY 2016-17, Mr. Arun Jaitley, the Finance Minister has not altered the income tax slab, which means that the individuals having an income above INR 2,50,000 are the ones who can opt for ELSS.

The income tax saving is a crucial part of the revenue-expenditure cycle. When you invest your revenue in addition to becoming eligible for a tax rebate, you will get growth of your money also. There is capital appreciation in ELSS fund because it is a type of diversified equity. Another factor that shows a green signal to ELSS scheme is the non-taxation policy on the long-term gains from the plan. Owing to its short lock-in period, ELSS mutual fund has gained popularity like no other tax-saving scheme.

There are many restrictions on the lock-in period as well as the maximum investment limit annually in other tax-free schemes. But, in ELSS scheme, there is restriction only in the lock-in period and that too for a short period. The targeted beneficiaries of the scheme are the investors with towering income. The investors having income above INR 2,50,000 are always on a quest for the schemes which can perform extraordinarily. The search for the investors will now end on one single name ELSS mutual fund.

Options under ELSS Scheme

ELSS scheme invests around 65% of the total fund in the equity instruments which are tax-free. Hence, there is a little risk factor involved in it. But, the capital gains are tax-free under the scheme which is the highlighting feature of the plan. The client has the twin option of growth and dividend. Under the growth function, the client will receive a lump sum amount after the lock-in period of three years. On the contrary to it, the dividend option allows the investor to enjoy a payback during three years whenever the dividend is declared.

Why ELSS?

ELSS fund wins over the other tax saving instruments because of the following reason:

• The lock-in period for the close competitor of ELSS, i.e., PPF (Private Provident Fund) is 15 years. Though the partial withdrawal can be made after 6 years, the full amount can be withdrawn after 3 years in ELSS.
• Where the maximum investment in PPF is INR 10,00,000, there is no limit on the maximum investment under ELSS mutual fund.
• The returns are in the form of rate of interest in PPF, which fluctuates around 8.5%. In contrast, to this, the returns from ELSS termed as equity gains or dividends hovers around 12-15%. 
• In addition, to the lump sum withdrawal ELSS mutual fund provides the option of dividend earnings which are absent in PPF.
• As an equity-linked scheme, it provides an edge of capital gain to the investment which marks a prolific growth in the money.

Who should invest in ELSS?

ELSS is not a good choice for the risk averse investors. The investors who want to go in for capital appreciation, as well as tax saving, should go in for ELSS scheme. The dividend and growth options serve the basis for selection. The investors who can not afford to invest their money in the long-term schemes can choose ELSS fund. All in all ELSS mutual fund is the right choice for the investors who want tax-benefit with capital appreciation and have a short-term perspective.

ELSS mutual fund is a beneficial scheme providing a growth rate of 12-15%. The fund offers to invest in diversified equity. This will serve the benefit of growth as well as tax-saving in one go. Therefore, reducing the tautness of investing in two different schemes viz, one for capital gains and other for tax-saving. These all benefits can not be seen in any other tax saving scheme.