Investment

Published: Mar 23, 2023
Updated: Mar 23, 2023

Invest in ELSS Funds Before March 31 to Save Tax: Here's What You Need to Know

With the end of the financial year approaching, many taxpayers are considering various investment options to save tax. One such option is Equity Linked Savings Scheme (ELSS) that offers a dual benefit of exposure to equity instruments as well as tax saving under Section 80C of the Income Tax Act, 1961.

What is ELSS?:

ELSS is a category of mutual funds that primarily invests in equity and equity-linked financial securities. Investing in ELSS enables taxpayers to claim a tax exemption of up to Rs 1.5 lakh. Moreover, it has a shorter lock-in period of three years, unlike other tax-saving instruments like PPF and NPS.

Benefits of Investing in ELSS:

Experts suggest that investing in ELSS can help taxpayers meet their financial goals while saving income tax at the same time. Moreover, ELSS schemes have given impressive historical returns with a CAGR of 12-19% per annum.

List of Top-performing ELSS Funds:

According to the AMFI data, there are a total of 42 ELSS schemes with a combined net asset under management (AUM) of Rs 1,49,998 crore as of February 28, 2023. The table highlights the top-performing ELSS schemes in terms of their 5-year returns.

Quant Tax Plan: 19.96%
Canara Robeco Equity Tax Saver Fund: 13.70%
Mirae Asset Tax Saver Fund: 13.00%
Bank of India Tax Advantage Fund: 12.07%
Kotak Tax Saver Fund: 12.49%

Invest before March 31st 2023 to avail tax benefits

Investing in ELSS before March 31 is crucial to avail of tax benefits for the financial year 2022-23. With its dual benefit of exposure to equity instruments and tax saving, ELSS is a viable investment option for taxpayers.