Best Tax Saving Mutual Funds 2018

As we have been well informed in previous articles, ELSS is a clear favourite amongst most investors, due to the benefits of a lower lock-in period, comparatively higher returns as compared to other 80/c related investments and added benefits that come with investing in a diversified mutual fund eg. professional management, economies of scale etc.

So here are some interesting funds that can be considered while looking for a suitable Tax Saving instrument. Today, we will take a look at my choice of Top 5 ELSS funds that I would recommend while doing Tax Planning for an individual.

1. IDFC Tax Advantage Fund (IDFC Tax Adv.(ELSS) – Direct (G))

A personal favourite, as this fund seems to have an edge over all other ELSS funds due to its surprisingly consistent performance. Even during market correction the NAV of this fund tends to fluctuate only marginally, which means that You could even invest lumpsums in this fund. Starting an SIP early in the year too would be beneficial in this fund. The current NAV of the fund is approx. Rs.63/-.

Fund key details –

Min investment – 500 Rs

Min additional investment – 500 Rs

Options – dividend/growth

Exit load (%) – nil

Expense ratio – 2.79

Benchmark- S&P BSE 200

2.  Reliance Tax Saver (Reliance Tax Saver (ELSS) Fund – Direct Plan (G))

A rather well-known player in the market, Reliance Capital has been in the mutual fund industry for a very long time and thus becomes a trustworthy AMC to choose from as people tend to look at them as pioneers in this industry. The fund also boasts of its long run since its inception in 2005. Also it has a comparatively low NAV of just Rs.62/-

Fund key details –

Min investment – 500 Rs

Min additional investment – 500 Rs

Options – dividend/growth

Exit load (%) – Nil

Expense ratio – 2.37

Benchmark- S&P BSE 100

 3.  Invesco India Tax Plan (Invesco India Tax Plan – Direct Plan (G))

Another personal favourite, Invesco mutual fund has proven in the last decade its ability to compete with the big guns, with comparatively slightly higher returns in all the fund categories and the same applies in the ELSS category. The fund also has a low NAV(Rs.54/-), thereby allowing investors for considering last minute lumpsum investments too, in order to secure the Rs.1.5 lakh limit of 80/c.

Fund key details –

Min investment – 500 Rs

Min additional investment – 500 Rs

Options – growth/ dividend

Exit load – nil

Expense ratio – 2.75

Benchmark- S&P BSE 100

4. DSP Blackrock Tax Saver (DSP BlackRock Tax Saver Fund – Direct Plan (G)).

Another MF player, known for its consistency in maintaining its NAV during volatile market fluctuations, the fund has provided above average returns in the last 3, 5 and 7 years.

As compared to its peers, it has a low NAV (Rs. 48). This fund house has been performing consistently well and has been giving dividends in specific funds, thereby showing how good they are performing, as fund houses are not obliged to give out dividends.

Fund key details –

Min investment-500 Rs

Min additional investment – 500 Rs

Options – growth/dividend

Exit load – nil

Expense ratio – 2.51

Benchmark-  NIFTY 500

  5. Axis Long Term Equity Fund Axis Long Term Equity Fund – Regular Plan (G).

Another household name, known for its brand more than anything else. While Axis Mutual fund doesn’t seem like the best option in other fund categories, it does tend to have an edge in the Tax Saving category. It has the lowest NAV (Rs.43) as compared to all the above-mentioned funds, thereby suitable for SIP as well as Lumpsum purchases.

Fund key details –

Min investment-500 Rs

Min additional investment – 500 Rs

Options – growth/dividend

Exit load – nil

Expense ratio – 2.50

Benchmark -S&P BSE 200

So, from the above mentioned 5 funds, do have a look at them and take a call on the mode and option to choose, while investing in them. Also ELSS funds have a majority of the portfolio invested in equity, so large amounts put in lumpsum may not seem advisable in certain cases.

P.S. – NAV’s mentioned are of Growth funds.

About the Author :

Rufino Dsouza is a Certified Financial Planner who specialises in  the following Services :

• Client wise portfolio management.
• Investment seminars. 
• Investment solutions and goal planning.
• Tax planning, and effective investment tools for the same.

His Contact details are as below :

Tags: Best Tax Saving Schemes In India