Best Tax Saving Mutual Funds in India 2020 – Maximize Your Savings!

Mutual Funds are a leading choice of investment among investors who want to diversify their investment portfolio. 

The problem here is that many new investors fail to take advantage of the diversity of mutual funds and rather follow the straight line of investment.

Tax saving mutual funds give you a great opportunity to not only grow your dormant funds but also get additional benefits on it.

What are Tax Saving Mutual Funds?

There are certain mutual funds that are eligible for tax benefits under section 80C of the Indian Income Tax Act. 

A large number of these tax saving mutual funds are ELSS or Equity-Linked Saving Scheme. 

According to Economic Times, the ELSS has offered 9.58% returns in the past year. Even though it claims to offer good returns, they are not exactly risk-free. So before investing, go through the risk factor.

Check out the top investment options in India

How Are They Different?

The best tax saving mutual funds or best ELSS funds usually comes with a lock-in period of three years. This means that if you invest in an ELSS scheme, you would not be able to withdraw your money unless the termination of the lock-in period.

Also, it is important to know that only the first installment will be unlocked after three years. The second installment will be unlocked in the following month. 

To understand this, let’s imagine you made an ELSS investment on 1st November 2019. Your first installment will be unlocked on 1st November 2022 and the second installment in December 2022.

Moreover, when you redeem your funds, you will be able to redeem those funds at the current NAV price. The Net Asset Value or NAV is the amount that the investor receives at the time of redemption. 

To make withdrawals, it is necessary that you know the number of units available in the scheme and then submit a claim application to your fund provider. 

Why Choose ELSS Over Other Tax Saving Investment Schemes?

It is no secret that there are a number of tax-saving investment schemes other than ELSS. Although they are also a good investment option for investors who are looking to diversify their financial portfolio, ELSS still got some advantages over them.

1) 3 Year Lock-In Period

When we compare ELSS’s lock-in period with other mutual funds, it surely is a long period. But when we compare this lock-in period to other tax saving schemes like PPF, FD and NPS, it is surely an advantage. Especially when it provides better returns.

2) Monthly Investments

Even though they have a lock-in period of 3 years, it gives you the freedom of making monthly investments as low as ₹1000. 

3) No Upper Limit

ELSS tax saving funds do not have an upper limit on investments. So, if you are looking for bug investments, it is a perfect go-to option.

4) Higher Returns

When we compare ELSS to other tax saving schemes (PPF, NPS, FD and NSC), we can clearly see the difference in the returns offered by them. Where ELSS offers returns from 15% to 18%, other schemes offer returns between 6% to 10%.

5) Multiple Benefits Under Section 80C

Other than tax being exempted on ELSS under section 80C, the investor also gets the benefit of wealth accumulation and zero exit load.

6) Comparison of ELSS with other Tax Saving Schemes

Most of the investors are reluctant to invest in mutual funds especially when we have other investment options that offer the same tax benefits.

Here is a simple comparison of ELSS with other tax-saving investment schemes to help you understand why they can be a better choice.

Investment Type

 Returns

 Lock-in Period

 Tax on Return

Fixed Deposit (5 years)

 5% to 7%

 5 years

 If interest exceeds ₹10,000 in a year

Public Provident Fund

 6% to 7%

 15 years

 No

National Pension System

 8% to 10%

 Till retirement

 20% on withdrawal

National Savings Certificate

 7% to 8%

 5 years

 Payable

Equity-Linked Savings Scheme

 15% to 18%

 3 years

 No

Types of Equity-Linked Savings Scheme (ELSS)

Currently, the Equity-Linked tax saving mutual funds are divided into two categories.

Dividend Schemes

Dividend Schemes are those tax-saving mutual funds that the investor can use to earn a passive income. The investor will get a dividend income even when the funds are locked in. These funds can be redeemed and re-invested before maturity is reached.

Growth schemes

On one hand, where the dividend schemes allow you to earn dividend income on your funds, the growth schemes help you generate long-term capital which you can only redeem after the maturity period. You cannot redeem growth funds before maturity.

Features of ELSS

Some important features that make ELSS an extremely desire investment scheme are.

Affordable Lower Limit

Most of the tax-saving schemes have high lower limits which seem unaffordable for many young investors. With ELSS, investors get an advantage of starting an investment at only ₹500.

However, only those investments with a worth of ₹1,00,000 are eligible for tax benefits.

No Upper Limit

ELSS does not have any upper limit. The investors can invest as many funds as they feel comfortable with. 

3-Year Lock-in Period

ELSS have a minimum lock-in period of 3 years. Before you invest your money, make sure you are comfortable with locking your money for this time period.

Market Risks

Even with tax benefits that come with ELSS, it is still a mutual fund. As an investor, you should consider the market risks that come with it.

It can be either low, medium or high-risk mutual funds.

Nomination

ELSS offers nomination facilities to the investor. Ask your service provider for details and requirements to apply for nomination.

Benefits of Tax Saving Mutual Funds

With the tax saving mutual funds, the investors gain a lot of investment benefits.

Tax Benefits

The first and most important benefit one gets with ELSS are the tax benefits. The tax saving mutual funds are eligible for tax benefits up to ₹1.5 lakhs.

The investor can enjoy the tax benefits as long as the funds are in the lock-in period.

Monthly Investments

The SIP or the Systematic Investment Plan lets the investor invest through monthly payments. This helps them keep investing in a long-term investment scheme. 

Diversify Investment Portfolio

The invested money is placed in various assets helping investors diversify their investment portfolio.

In addition to this, since your funds are divided among different assets, it reduces the chances of enduring risks, thus maximising your profits.

Long-Term Benefits

As a long-term investment, tax saving mutual funds can prove to be extremely beneficial. They continue to grow as long as you do not withdraw them, even if the lock-in period has been terminated.

Moreover, you can always withdraw the dividends earned on the funds before the end of the lock-in period and keep earning interest on the principal amount.

Open-Ended Funds

One of the biggest advantages of tax saving mutual funds is that these funds are usually open-ended, which means that the investments can be made all throughout the year.

Professional Expertise

The mutual funds are handled by professionals who are trained to maximise your profits by smartly dividing your funds. 

Since your funds are professionally managed, the risk of loss is reduced and you don’t have to invest too much time.

Here are the top ten tax savings mutual funds in India. 

Top 10 Tax Saving Mutual Funds(ELSS Funds) in India 2020

1. Axis Long-Term Equity Fund

The Axis Long-Term Equity Fund was launched in October 2009 and till date has shown considerable growth in the return rate. The current return-rate for 3-year lock-in period comes around 15.86% annually. 

Current NAV: 47.5698

These open-ended funds are distributed among various companies. Here are some of the top 10 holdings of Axis Long-Term Equity Fund with their weight.

Bajaj Finance Ltd.

 8.11%

Kotak Mahindra Bank Ltd.

 8%

HDFC Bank Ltd.

 7.79%

Avenue Supermarts Ltd.

 6.94%

Tata Consultancy Services Ltd.

 6.92%

Bandhan Bank Ltd.

 6.62%

Housing Development Finance Corp Ltd.

 5.49%

Pidilite Industries Ltd.

 5.48%

Info Edge (India) Ltd.

 5.47%

Maruti Suzuki India Ltd.

 4.37%

Features of Axis Long-Term Equity Funds

Here are some important features of the Axis Long-Term Equity Funds that can help you decide if they are the best option for you.

A) Fund Type

Axis Long-Term Equity Funds are ELSS or tax savings funds that can help the investor get the advantages of the mutual funds while still getting tax advantages under section 80C.

B) Risk Level

When we talk about the risks on this ELSS, it is moderately high. But looking at the past performance of these funds, we can put a little faith in them.

C) Redemption of Units

To redeem the investments made in these funds, the investor has to wait until the end of the lock-in period a.k.a 3 years after the date of investment. 

After the end of the lock-in period, the investor has to propose redemption of funds and the investor receives the funds within 10 working days.

If you do not redeem your funds at the end of the lock-in period, you will continue to earn interest on it until you redeem them.

D) Fund Manager 

Mr Jinesh Gopani is the fund manager for Axis Long-Term Equity Funds with an experience of 16 years in the field.

E) Entry Load

There is no entry or exit load on the Axis Long-Term Equity Funds. 

F) Latest Return

The latest return of this scheme is 15.31%

Benefits of Investing in Axis Long-Term Equity Funds

  1. Being an ELSS fund, the Axis Long-Term Equity funds help you get tax benefits for up to ₹1.5 lakh.
  2. They have the shortest lock-in period of 6 months that can be great for investors who do not like long-term financial commitments.
  3. Axis Long-Term Equity Funds has shown considerable growth throughout the years and invests in some of the most stable companies.

Who is it suitable for?

Investors who want to invest mostly in large-cap funds are comfortable to take a little risk with their funds should go for these funds. 

For more details visit the official page.

2. Aditya Birla Sun Life Tax Relief 96

One of the leading tax saving funds currently is the Aditya Birla Sun Life Tax Relief 96. Counted as one of the most stable and rapidly growing funds, more and more investors are beginning to invest in this scheme. 

Current NAV: 31.86

These open-ended ELSS funds are managed by Ajay Garg have some of the top holdings that incline it towards mid and large-cap funds. Here are the top 10 holdings of the Aditya Birla Sun Life Tax Relief 96.

Reliance Industries Ltd.

 8.97%

Honeywell Automation India Ltd.

 8.34%

Housing Development Finance Corp Ltd.

 7.65%

Gillette India Ltd.

 7.25%

Pfizer Ltd.

 6.71%

GlaxoSmithKline Pharmaceuticals Ltd

 5.24%

Bayer CropScience Ltd.

 4.44%

Kotak Mahindra Bank Ltd.

 4.21%

Larsen and Toubro Ltd.

 4.04%

HDFC Bank Ltd.

 2.89%

Features of Aditya Birla Sun Life Tax Relief 96

Some of the features of Aditya Birla Sun Life Tax Relief 96 funds that make them a reliable investment option.

A) Fund Type

They are ELSS funds that help you get tax benefits mentioned under section 80C.

B) Risk Level 

Since the Aditya Birla Sun Life Tax Relief 96 funds incline more towards mid-cap (43.08%) and large-cap (40.44%) stocks, the risk level on these funds is moderately high.

C) Redemption of Units

Like any other ELSS fund, the investor can redeem the funds after the completion of the lock-in period. The investor has to submit an application for the release of funds.

Also, you can decide to leave the funds untouched and keep earning returns on the money.

D) Fund Manager

The Aditya Birla Sun Life Tax Relief 96 funds are managed by Ajay Garg, a senior fund manager who has an expertise in the field.

E) Entry and Exit Load

They do not have an entry or exit load.

F) Latest returns

Latest return of Aditya Birla Sun Life Tax Relief 96 fund is 12.08%

Benefits of Aditya Birla Sun Life Tax Relief 96 Funds

  1. With the minimum investment of ₹500, the tax savings funds are suitable for almost every investor.
  2. The absence of entry and exit load helps the investor to maximize their returns.
  3. These ELSS funds are managed by Ajay Garg, a professional fund manager with more than two and half decades of experience in financial services. This helps you get the best out of your money.

Who is it Suitable For?

The Aditya Birla Sun Life Tax Relief 96 funds are best suited for investors who are looking for good returns and are planning long-term investments.

To get the complete details about these funds and the company’s portfolio; visit their website.

3. Mirae Asset Tax Saver Fund – Regular Growth

Another well-known tax saving mutual fund in this list would be the Mirae Asset Tax Saver Fund. This fund is one of the most highly performing funds and has an average CAGR of 12.59%.

The scheme focuses diversifying the portfolio as well as investing across market capitalization. The company claims that their investment approach is bottoms up i.e. they are driven by value investment and working on the growth of oriental businesses.

Current NAV: 18.655

Top 10 Holdings of Mirae Asset Tax Saver Fund

HDFC Bank Ltd.

 9.45%

ICICI Bank Ltd.

 6.25%

Reliance Industries Ltd.

 5.15%

State Bank of India

 5.03%

Infosys Ltd.

 4.19%

ITC Ltd.

 3.97%

Axis Bank Ltd.

 3.89%

Tata Consultancy Services Ltd.

 3.63%

Larsen and Toubro Ltd.

 3.41%

IndusInd Bank Ltd.

 2.99%

Features of Mirae Asset Tax Saver Fund

A) Fund Type

Mirae Asset Tax Saver Fund is an ELSS fund that helps the investor gain tax benefits mentioned under section 80C.

B) Risk Level

The risk on these funds is moderately high as they are open-ended funds that mostly invests in large and mid-cap stocks.

C) Redemption of Units

The funds can only be redeemed after the completion of the lock-in period of three years.

D) Fund Manager

Mirae Asset Tax Saver fund is managed by Neelesh Surana who has been managing these funds since November 2015.

E) Entry/Exit Load

There is no entry or exit load on this fund. However, the investor must pay an annual expense ratio of 2.34%.

F) Latest Return

The latest returns for a three year lock-in period of this fund is 16.69% which is considerably high when compared to other funds.

Benefits of Investing in Mirae Asset Tax Saver Fund.

  1. One of the fastest-growing mutual funds that shows a bright growth in the near future.
  2. The current return ratio is one of the highest when compared to other such schemes.
  3. Professionally managed funds that help the investor systematically diversify their financial portfolio.

Who Should Opt It?

Investors who are looking for good returns in a short period and are comfortable in taking a moderately high risk should go for this scheme.

To know more about this scheme visit the official page.

4. DSP Tax Saver Fund Growth

According to the service provider, this scheme aims to generate medium to long term capital growth by maintaining a diversified portfolio. 

DSP Tax Saver Fund has done pretty well through the year since its inception in January 2007. These professionally managed funds are a great way to earn good returns and simultaneously strengthening your financial portfolio.

Current NAV: 50.638

Top 10 Holdings of DSP Tax Saver Fund

HDFC Bank Ltd.

 7.81%

ICICI Bank Ltd.

 7.49%

State Bank of India

 5.05%

Infosys Ltd.

 4.96%

Axis Bank Ltd.

 4.84%

Reliance Industries Ltd.

 4.14%

Bharti Airtel Ltd.

 4.13%

Larsen and Toubro Ltd.

 2.6%

Bharat Petroleum Corp Ltd.

 2.41%

Kotak Mahindra Bank Ltd.

 2.4%

Features of DSP Tax Saver Fund

A) Fund Type

DSP Tax Saver Fund is an ELSS fund which constitutes equity and equity-related investments.

B) Risk Level

The risk of this scheme is moderately high.

C) Redemption of Units

The funds can be redeemed after the end of the lock-in period. Propose for the redemption of funds at the fund house and the funds are usually released within 7 to 10 working days.

D) Fund Manager

The DSP Tax Saver Fund is managed by Rohit Singhania who has been managing these funds since 2015.

E) Entry and Exit Load

There is no entry or exit load on this fund but the investor has to pay an expense ratio of 2.08% annually.

F) Latest Return

The latest return on this scheme is 11.34%.

Benefits of Investing in DSP Tax Saver Fund Growth

  1. They are a brilliant way to invest if you want to keep the investment short (minimum 3 years).
  2. The returns compete with many other schemes under this category.
  3. DSP is a growing financial institution which increases its charges of gaining more returns in the future.

Who Should Opt It?

Investors who do not wait for a long period and are okay to take a little risk with their investment to gain maximum returns should go for this scheme.

To know more about the scheme visit their website.

5. Kotak Tax Saver Funds

Launched in November 2005, the Kotak Tax Saver Funds primarily focuses on equity and equity-based funds to maximise returns. Although the scheme doesn’t guarantee high returns due to market shifts, the past year performances have been pretty stable.

Current NAV: 46.007

These open-ended funds focus on the creation of the returns in terms of tax benefits. Here are the top 10 holdings of the Kotak Tax Saver Funds.

Reliance Industries Ltd.

 6.89%

ICICI Bank Ltd.

 6.57%

HDFC Bank Ltd.

 5.99%

Axis Bank Ltd.

 5.78%

GlaxoSmithKline Pharmaceuticals Ltd

 4.2%

Tata Consultancy Services Ltd.

 3.91%

Larsen and Toubro Ltd.

 3.73%

SRF Ltd.

 3.08%

AU Small Finance Bank Ltd.

 2.78%

Infosys Ltd.

 2.78%

Features of Kotak Tax Saver Funds

Here are some features of the Kotak Tax Saver Funds.

A) Fund Type

Kotak Tax Saver Funds are ELSS or Equity Linked Saving Scheme Funds that lets the investor enjoy the tax benefits of up to ₹1.5 lakhs.

B) Risk Level

Being mutual funds, the Kotak Tax Saver funds are subjected to market fluctuations. Hence, the risk level on these funds is moderately high.

C) Redemption of Funds

The investor can propose the redemption of funds after the completion of a 3-year lock-in period. The funds will be released by the repurchase of funds by the fund house.

D) Fund Manager

The funds are managed by Mr Harsh Upadhyaya who has been managing Kotak Tax Saver funds since 2015. 

Other than this, he also manages Kotak Standard Multicap funds and Kotak Equity Opportunity funds that have shown considerable growth through the years.

E) Entry and Exit Load

There is no entry or exit load on the Kotak Tax Saver Funds. 

F) Latest Return

The latest return on this scheme is 11.79% for three year lock-in period.

Benefits of Kotak Tax Saver Funds

  1. Minimum investment of ₹500.
  2. Being one of the most diverse funds, it is a great way to diversify your portfolio without putting much effort into it.
  3. The investor gets tax benefits for up to ₹1.5 lakhs with returns more than other tax saving investment options.

Who Should Invest in This?

Investors who are looking to diversify their portfolio and earn good returns with tax benefits. Also, keep in mind that there is a moderately high risk of investing in them.

To know more about these funds click here.

6. Canara Robeco Equity Tax Saver Funds

Canara Robeco Equity Tax Saver Funds comes in four variant schemes – Direct Dividend, Direct Growth, Regular Dividend and Regular Growth.

Scheme Name

 Current NAV

Canara Robeco Equity Tax Saver Fund – Direct Dividend

 38.2500

Canara Robeco Equity Tax Saver Fund – Direct Growth

 69.9400

Canara Robeco Equity Tax Saver Fund – Regular Dividend

 25.2800

Canara Robeco Equity Tax Saver Fund – Regular Growth

 66.9100

Top Ten Holdings of Canara Robeco Equity Tax Saver Fund

HDFC Bank Ltd.

 9.33%

Bajaj Finance Ltd.

 5.23%

Infosys Ltd.

 5.12%

Hindustan Unilever Ltd.

 4.67%

ICICI Bank Ltd.

 3.82%

Divis Laboratories Ltd.

 3.64%

Kotak Mahindra Bank Ltd.

 3.50%

HDFC Asset Management Co. Ltd.

 3.37%

ICICI Lombard General Insurance Co. Ltd.

 3.23%

Housing Development Finance Corporation Ltd.

 3.22%

Features of Canara Robeco Equity Tax Saver Fund

Here are some of the features of the Canara Robeco Equity Tax Saver Fund.

A) Fund Type

Canara Robeco Equity Tax Saver Fund is an ELSS fund that comes with the added advantage of tax benefits.

B) Risk Level

Since they are a multi-cap fund that helps the investor gain maximum returns, the risk on these funds is moderately high.

C) Redemption of Units

Just like any other ELSS fund, the funds can be redeemed after the end of the lock-in period. For growth funds, the complete amount will be released after the end of the lock-in period, but for dividend funds, the dividend can be released during the investment period.

D) Fund Manager

Canara Robeco Equity Tax Saver fund is managed by Ms Cheenu Gupta and Mr Krishna Sanghavi. They have been managing this fund since 2018 and have shown considerable growth.

E) Entry and Exit Load

There are no extra charges on purchasing of the funds nor does the fund house has an exit load.

F) Latest Return

The average return of the Canara Robeco Equity Tax Saver fund is 12.99%.

Benefits of Canara Robeco Equity Tax Saver Fund

  1. Inclining towards mid and large-cap stocks, the Canara Robeco Equity Tax Saver Fund offers high returns.
  2. The funds are professionally managed, keeping your money secure.
  3. Along with a long-term investment plan, the investor also gets the added advantage of tax benefits that come with the scheme.

Who Should Opt it?

Investors who are looking for good returns and are okay to take a risk should go for the Canara Robeco Equity Tax Saver Fund.

For more details visit their website.

7. UTI Long Term Equity Fund

UTI AMC fund house offers UTI Long Term Equity Fund that deals in the tax-saving equity-linked saving scheme. The investments are made in business that has stable return ratios, cash overflow and management. 

UTI Long Term Equity Fund is an open-ended fund that invests in multi-cap and large-cap stocks. 

Current NAV: 89.8112

Top 10 Holdings of the UTI Long Term Equity Fund

ICICI Bank Ltd.

 8.12%

HDFC Bank Ltd.

 8.09%

Axis Bank Ltd.

 5.86%

Infosys Ltd.

 5.21%

ITC Ltd.

 3.99%

IndusInd Bank Ltd.

 2.79%

Gujarat Gas Ltd.

 2.24%

Reliance Industries Ltd.

 2.2%

Muthoot Finance Ltd.

 2.17%

Maruti Suzuki India Ltd.

 2.01%

Features of the UTI Long Term Equity Fund

Here are the features of UTI Long Term Equity Fund. 

A) Fund Type

UTI Long Term Equity Fund is an ELSS fund that offers all the tax benefits mentioned under section 80C for up to ₹1.5 lakh.

B) Risk Level

Being a part of open-ended mutual funds, these funds have a moderately high risk.

C) Redemption of Units

The funds are released through a repurchase after the completion of the lock-in period of three years. 

The investor can choose to keep the funds intact and continue to earn profits on it.

D) Fund Manager

These funds are jointly managed by Mr Lalit Nambiar and Mr Vetri Subramaniam, both having rich experience in the field.

E) Entry and Exit Load

The company have no entry load on the purchasing of these funds. They do not have any exit load on the withdrawal of funds.

F) Latest Return

The latest return on this scheme is 9.72%.

Benefits of Investing in UTI Long Term Equity Fund

  1. The investor can save up to ₹46,800 in tax benefits offered by the scheme.
  2. The funds have shown considerable growth since its launching in 1999.
  3. Being one of the oldest funds, they are pretty reliable and has shown good returns through the years.

Who Should Opt It?

Investors who want to keep returns as a priority can go for this scheme. But you must keep in mind that being mutual funds they come with a risk.

Also, investors who are comfortable to wait for three to five years to gain good returns.

To know more about this scheme, visit their website.

8. ICICI Prudential Long Term Equity Fund

ICICI Prudential Long Term Equity Fund is a mutual fund that focuses on creating wealth over a period of time and offer tax benefits mentioned under section 80C. The average return for a 3 year lock-in period for these funds is 9.74%.

Current NAV: 380.42

Top 10 Holdings of ICICI Prudential Long Term Equity Fund

NTPC Ltd.

 6.56%

ICICI Bank Ltd.

 5.96%

Bharti Airtel Ltd.

 5.68%

Infosys Ltd.

 5.22%

ITC Ltd.

 4.84%

Oil and Natural Gas Corp Ltd.

 4.34%

Hindalco Industries Ltd.

 4.2%

SBI Life Insurance Co Ltd.

 3.9%

State Bank of India

 3.31%

Larsen and Toubro Ltd.

 2.9%

Features of ICICI Prudential Long Term Equity Fund

A) Type Of Fund

The ICICI Prudential Long Term Equity Fund is an ELSS fund that comes with the tax-saving benefits.

B) Risk Level 

The risk of these funds is moderately high. So while going into this investment scheme, you should always consider this factor and if you are comfortable with the risk.

C) Redemption of Units

The fund can be redeemed after the end of the lock-in period of three years. The investor had to file for the release of funds. Usually, it takes 7 to 10 days for the funds to be released.

D) Fund Manager

The ICICI Prudential Long Term Equity Fund is jointly managed by Mr Sankaran Naren and Mr Harish Bihani. They have been managing this fund since November 2018.

E) Entry and Exit Load

There is no entry or exit load in this scheme.

F) Latest Returns

The latest return of ICICI Prudential Long Term Equity Fund is 9.74%.

Benefits of ICICI Prudential Long Term Equity Fund

  1. Since inception, the scheme has delivered 20.32% CAGR as returns.
  2. The stocks are divided among large-cap, mid-cap and small-cap stocks so as to reduce risk and increase returns.

Who Should Opt It?

ICICI Prudential Long Term Equity Fund is best for investors who want to get tax benefits but also earn good returns.

To know more about the scheme and study the complete portfolio visit their website.

9. SBI Magnum Tax Gain Scheme

SBI Magnum Tax Gain Scheme is an open-ended ELSS scheme that was launched in March of 1993. Being a multi-cap scheme, this scheme tends to gain maximum returns and simultaneously reduce risks.

Current NAV: 140.8774

Top Holdings of SBI Magnum Tax Gain Scheme

HDFC Bank Ltd.

 6.74%

ICICI Bank Ltd.

 6.47%

ICICI Prudential Life Insurance Co Ltd.

 5.34%

Reliance Industries Ltd.

 4.91%

Housing Development Finance Corp Ltd.

 4.8%

Larsen and Toubro Ltd.

 4.77%

State Bank of India 

 4%

Axis Bank Ltd.

 3.96%

ITC Ltd.

 3.24%

Ambuja Cement Ltd.

 2.87%

Features of SBI Magnum Tax Gain Scheme

A) Type of Fund

SBI Magnum Tax Gain Scheme is an ELSS fund. These equity diversified mutual funds have a lock-in period of three years.

B) Risk Level

Like any other mutual fund, the investment risk on these funds is moderately high.

C) Redemption of Units

The fund can be redeemed at the end of the lock-in period of three years. Proposal for the release of funds need to be made at the fund house and the funds will be released in seven to ten working days.

D) Fund Manager

The SBI Magnum Tax Gain Fund is managed by Mr Dinesh Balachandran who has been managing these funds since September 2016.

E) Entry and Exit Load

There is no entry load in this scheme. The scheme comes with zero exit load. However, an expense ratio of 2.11% is applied every year.

F) Latest Return

Latest return on this scheme is 7.06%.

Benefits of SBI Magnum Tax Gain Scheme

  1. Being one of the oldest ELSS schemes, it is the most stable and trustworthy investment among its competitors.
  2. The change of fund manager in 2016 has led to a change in strategy. Although the fund is more diversified, the growth has remained neutral throughout the years.
  3. It has an average return of 7.06% annually.

Who Should Opt It?

An investor who wants a little stability, as well as tax benefits in their long-term investment plan, should go for SBI Magnum Tax Gain Scheme.

For Complete Details visit their website.

10. HDFC TaxSaver

HDFC TaxSaver Fund constitutes equity and equity-related funds that focus on generating maximum capital. Around 70% to 80% of the funds are invested in large-cap stocks whereas the rest are divided among small-cap and mid-cap stocks.

Current NAV: 507.132

Top 10 Holdings of the HDFC TaxSaver Scheme

ICICI Bank Ltd.

 9.07%

NTPC Ltd.

 7.42%

Reliance Industries Ltd.

 7.4%

State Bank of India

 7.28%

HDFC Bank Ltd.

 7.07%

Larsen and Toubro Ltd.

 6.38%

Bharat Petroleum Corp Ltd.

 6.23%

Infosys Ltd.

 5.52%

GAIL (India) Ltd.

 3.96%

ITC Ltd.

 3.94%

Features of HDFC TaxSaver Scheme

A) Fund Type

HDFC TaxSaver Scheme is an ELSS fund that invests mostly in large-cap equity stocks.

B) Risk Level

The risk on these funds is moderately high, just like any other mutual fund.

C) Redemption of Units

To redeem the funds, the investor must file a proposal for release of funds after the completion of the lock-in period (of three years). The investor can also decide to keep the funds to gain maximum profits as these funds do not offer much for a short term investment.

D) Fund Manager

The funds are managed by Mr Vinay Kulkarni who has been managing these funds since 2006 and has been quite stable with the profits.

E) Entry/Exit Load

There is no entry or exit load but the investor must pay an expense ratio of 2.11% every year.

F) Latest Returns

The latest return on the HDFC TaxSaver Scheme is 6.79% which is not much when compared to other schemes mentioned in this list.

Benefits of Investing in HDFC TaxSaver Scheme

  1. First and most importantly, the investor gets tax redemption of up to ₹1.5 lakhs.
  2. One of the most trusted financial institutions of the country.
  3. The funds are managed professionally by Vinay Kulkarni who has a rich experience in the field.

Who Should Opt it?

Investors who want stability in their investment plan and are okay to wait for a long period should go for this scheme.

For more details, visit their website

How to Choose the Best Tax Saving Fund for Yourself?

There are a number of tax saving mutual funds currently present in the market but to choose a plan that suits you best, it is important that you look into certain factors and compare different funds.

How Does it Tilt?

ELSS is a multi-cap scheme, i.e. they can be invested in large-cap stocks, mid-cap stocks and small-cap stocks. 

Some mutual funds tend to tilt towards large-cap stocks (Invesco Tax Plan and Tata Tax Savings Scheme) whereas the other tends to tilt towards small-cap or mid-cap stocks (IDFC Tax Savings Scheme and Aditya Birla Sunlife Tax Relief 96).

Large-cap funds tend to provide stability with fewer profits whereas the small and mid-cap stocks provide higher profits with more risks and instability.

What’s the Concentration?

Stick concentration refers to the number of stocks a company deals in. The concentration of stocks can help you reduce the risks and maximise your profits. 

Before investing look at the percentage of the top-performing stocks in the portfolio. This will help you to get an idea of returns and also determine the risk with that company. 

The more the concentration of the portfolio, lesser is the risk of loss as the underperformance of a few will not affect the overall returns. But it can also dilute the performance of individual components. 

Returns

The reason behind any investment is its returns. Whenever you are looking to invest any of the tax saving mutual funds, make sure that you look into their return history. Although it is not necessary that the returns remain the same as the last ones, it can still help you get the usual drift of the funds.

Moreover, looking into the funds that were top performers of the previous year can help you understand the factors that you must look for in your service provider. What is the strategy they are using to maximise the returns?

So, before you choose an ELSS provider keep the return consistency as a priority.

Time Period

Usually, ELSS has a lock-in period of three years which may not be suitable for many. Some investors like to invest in short-term investment programs whereas others have long-term plans as they offer better returns.

So, when you decide to invest in ELSS, remember the terms of the time period and carefully study the details of the scheme and the charges of the service provider.

Start Investing in The Best ELSS Funds Today!

For many new investors, mutual funds seem to be a magic potion which offers high returns and grow their wealth. But it is important that you don’t forget that needs time to get good returns and also that you choose the funds that can suit your requirements.

Study the scheme carefully and clear the doubts that you may have. Mutual funds are a great way to diversify your investment portfolio while making use of your dormant funds. 

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