Aug 17, 2016 3 min read

Best Tax-Managed ELSS Mutual Funds

If you desire to achieve great height in your investment and making plans for saving taxes, then ELSS is the best alternative for you. Read this blog in full to know more about it.
Are you planning for an investment? Do you want to get tax benefit? If yes, then opt for the ELSS Mutual Funds. Almost everyone is aware of the tax exemption available under section 80C of Income Tax Act, which provides tax rebate up to Rs.150000 for an investment made in equities. You can also avail the same benefit and save your taxes for the year.

So, if you are looking for the such investments which can provide you tax exemptions along with capital appreciation, then hereunder is the list of five best tax-managed ELSS mutual funds for 2016:

  1. ICICI Prudential Long Term Equity Fund (Tax Saving) (G): It is a growth-oriented open-ended equity fund scheme that holds high ranking by CRISIL. It owns an asset size of around Rs.118 Crore(as on Feb 29, 2016), which is majorly allocated in equities and some of the amount is also put in cash instruments to provide diversification. The scheme aims to provide maximum returns with capital appreciation in the long run.
  2. SBI Magnum Tax Gain Scheme (G): An open-ended scheme of equity class which offers cumulative returns to the investors and thus provides growth prospects. The assets are majorly allocated in the stock of the companies and also in money market securities. Along with the capital appreciation in the long run, it also provides tax benefits under section 80C of Income Tax Act.
  3. Reliance Tax Saver (ELSS) Fund (G): This scheme is designed by the fund manager of Reliance mutual fund, and aims to fulfil the dual objectives of investors, viz., tax-savings and long-term growth. With a huge asset size, it is providing higher returns which is approximately 35.11% for 3 years.
  4. Birla Sun Life Tax Relief 96 (G): This is an ELSS fund scheme which is designed by the Birla Sun Life mutual fund. It holds an asset size of around Rs.389 crores(as on 29 Feb, 2016) which are majorly allocated into equities. It has been ranked high by CRISIL and holds 5 star ratings. Its performance in the past has proved its efficiency as it has offered an average return of 30.40% in 3 years investment.
  5. Axis Long Term Equity Fund (G): This is a scheme which is designed by one of the top mutual funds the Axis mutual fund. It is specifically aimed at offering high-yields to the investors by allocating the assets into equities, debts and money market instruments. By holding 5 star ratings from CRISIL, it is among the top running mutual fund schemes of 2016.

Accordingly, an investor can fetch the highest returns with tax savings benefits by investing their monies in the above-mentioned schemes.

In the present era, where inflation is touching sky-high, it has become crucial to take every step efficiently wherever money matters are involved. Due to the heavy tax burden, people have started indulging in illegal activities such as tax evasion, which is causing a negative impact on the economy. So, instead of going on the wrong path of evading taxes, one can opt for an efficient way to reduce the tax burdensome. The tax-managed schemes which are designed under the Equity Linked Savings Scheme(ELSS) funds, provide such platform to the investors.

Furthermore, if we consider the features of ELSS we can find the following major traits:

  • The schemes falling in this class are well-diversified and equity-oriented, assuring long-term growth.
  • ELSS falls under the EEE category which means all the three amounts viz., investment, income received and the withdrawals, are exempted from taxes.

Hence, if you are planning an investment and desiring tax-savings, then the above listed ELSS fund schemes are the best options available for you. You can choose the scheme for your portfolio by availing the services of My SIP Online.