Tax planning with top ELSS Funds

Tax planning with top ELSS Funds

by 5paisa Research Team Last Updated: Dec 13, 2022 - 11:22 am 37.9k Views
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Only a month and a half left for the end of this financial year and thereby the last chance to avail the deduction. In this article, we have listed the top ELSS for tax planning.

When it comes to tax planning there are various deductions available under various sections of the Income Tax Act. One of the most popular is deductions under section 80C of the Income Tax Act. As per the prevailing tax laws, under this section on can avail deduction up to Rs 1.5 lakh. Moreover, you can avail this by investing in various avenues such as public provident fund (PPF), life insurance policy premiums including premium towards Unit Linked Insurance Plans (ULIP), Tax Saving Fixed Deposits, Equity Linked Saving Schemes (ELSS), etc.

One thing to note here is that the deduction is collectively Rs 1.5 lakh. This means that you cannot avail a deduction of Rs 3 lakh by investing Rs 1.5 lakh each in PPF and ELSS. Even if you do so, the maximum deduction that you will be eligible for is Rs 1.5 lakhs. The biggest question that a lot of people ask is for this purpose PPF is better or ELSS.

 Mutual fund intermediaries might say ELSS is the best option and insurance agents might say life insurance is the best option. However, in our opinion before making any investment decision even if it is purely from tax saving perspective shouldn’t be done without understanding your risk tolerance level. Say, if you are a moderate risk taker then we believe you should invest 50 per cent in PPF and 50 per cent in ELSS.

Having said that, in this article we have listed top 5 ELSS funds worth considering.

Trailing Returns (%) 

1-Year 

3-Year 

5-Year 

10-Year 

BOI AXA Tax Advantage Fund 

27.73 

27.78 

19.25 

16.67 

IDFC Tax Advantage (ELSS) Fund 

34.11 

24.15 

17.98 

17.89 

Canara Robeco Equity Tax Saver Fund 

20.52 

23.38 

18.70 

16.27 

DSP Tax Saver Fund 

25.60 

22.94 

15.79 

17.92 

Kotak Tax Saver Fund 

25.18 

21.01 

15.36 

15.49 

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