Are you worried about tax deduction in 2024, here is list of best tax saving method via mutual funds, know about ELSS funds and more on choosing the right mutual funds…

Are you worried about tax deduction in 2024, here is list of best tax saving method via mutual funds, know about ELSS funds and more on choosing the right mutual funds…

What are ELSS Mutual Funds?

An ELSS fund (equity-linked savings scheme) is type of mutual funds where the investor is directly investing in the equity and equity-linked securities which is in turn managed by the Large AMC’s (Asset Management Company) some of the well know AMC’s are SBI Mutual Funds, HDFC Mutual Funds, Kotak Mutual and more on the list.

ELSS are type of the mutual funds which are eligible for  tax deductions under provisions of Section 80C of the Income Tax Act, 1961. By investing in this ELSS mutual funds, an individual  can claim a tax rebate of up to Rs. 1,50,000 and save up to Rs. 46,800 in a year through taxes alone.

Who should consider investing in ELSS Mutual Funds, are you the right person to invest in the ELSS mutual funds?

ELSS funds are considered for the tax payer in the financial year who are ready take the risk of the  equity and equity-linked securities and by assessing the tax to be saved by the individual. Before investing in the ELSS mutual funds an investor should know that this ELSS mutual funds have lock-in period 3 years. ELSS mutual funds are the best option for the individual and associated person who wants to save the tax.

ELSS funds are also good hold for long term investment in case an individual don’t have use of term capital holding in saving accounts or more other scheme which provide lower rates of return around 8 to 10 percent. Mutual funds are well known for their compounding return on investment.

What are the factors to be considered while choosing the right ELSS mutual funds for your long term investment or for tax benefits?

First major advantage of the ELSS mutual funds is it’s having the shortest lock in period of the 3 years and another mark is its having high potential to give very high returns. Based on the individual Risk Appetite, an individual can decide on how much to invest in the mutual funds.

Factors to be considered while choosing the ELSS mutual funds are Fund Performance, an investor should make an analysis before investing how the fund has performed in the past, Net Asset Value(NAV) is the current market value of the per unit mutual funds, AMC Performance, Expense Ratio is the fee paid the investor to the AMC’s house while redemption of the mutual funds.

Expense ratio is charged as part of the efforts put by the AMC to make quality research on the stocks and investing the right equity-linked securities. Exit Load is another factor to be considered usually ELSS mutual funds have 3 years Lock-in period so they don’t have any kind of the exit load applied on the ELSS mutual funds.

Lets look on the top mutual funds for tax benefits in the year 2024
  1. Quant ELSS Tax Saver Fund Direct Growth has given the return of the 54% returns in the past performance in one year.

The above are the holdings by the Quant ELSS Tax Saver Fund Direct Growth, the expense ratio of this fund is 0.76%. Exit load for this fund is zero.

2. Bandhan ELSS Tax Saver Fund Direct Plan Growth has given the return of the 40% returns in the past performance in one year. Its one of the most well performing tax mutual funds. The expense ratio Bandhan ELSS Tax Saver Fund Direct Plan Growth is 0.57% which is lower than the Quant ELSS Tax Saver Fund Direct Growth. Exit load for this fund is zero.

3. SBI Long Term Equity Fund Direct Plan Growth has given the return of the 55% returns in the past performance of in one year. Its one of the most well performing tax mutual funds. The expense ratio Bandhan ELSS Tax Saver Fund Direct Plan Growth is 0.96% which is higher than the Quant ELSS Tax Saver Fund Direct Growth and Bandhan ELSS Tax Saver Fund Direct Plan Growth. Exit load for this fund is zero.

4. HDFC ELSS Tax Saver Direct Plan Growth is on the fourth on our list as this has given the return of the 45% returns in the past performance in one year. The expense ratio of this mutual funds is 1.14% in comparison of the Bandhan ELSS Tax Saver Fund Direct Plan Growth, SBI Long Term Equity Fund Direct Plan Growth, Quant ELSS Tax Saver Fund Direct Growth which much higher and more than others. Exit load for this fund is zero. HDFC is one among the largest AMC’s in India and Globe.

5. Canara Robeco ELSS Tax Saver Direct Growth is fifth in our list of the mutual funds as this has given the return of the 35% returns in the past performance in one year. The expense ratio of this Canara Robeco ELSS Tax Saver Direct Growth mutual funds is 0.58% which lower than all the above mentioned mutual funds.

Disclaimers: Thinkota provides stock market updates for informational and educational purposes only and should not be considered as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions. Thinkota.com is not liable or responsible for any losses incurred by the reader. Investments in stocks markets and mutual funds are subject to market risk, make your analysis before investing and We advise investors to check with certified experts before making any investment decisions.


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