After the blows suffered by the economy due to the pandemic, people are now more cautious and prudent when it comes to entering into the equity market and investing their capital. Of course, mutual funds are one of the interesting options to invest in, but people also want to save tax, and hence go for a modified version of mutual funds – Equity Linked Saving Scheme (ELSS) funds.
Under section 80C of the Income Tax Act, an individual is exempted from paying tax on money that he/she invests in ELSS, up to Rs 1.5 lakh. People who are comfortable with the lock-in period associated with ELSS funds, which is 3 years, must definitely consider using this instrument to get good returns and grow their capital.
Financial advising firm, Value Research, has analyzed an array of ELSS funds to find out the best options available. Here are the top five stocks rated by Value Research:
BOI AXA Tax Advantage
With returns of 31.61 percent on a lump sum investment of Rs 1 lakh, the BOI AXA Tax Advantage ELSS fund has garnered five stars from the firm for giving returns of Rs 2,27,969 in the lock-in period of three years. Value Research has also mentioned the SIP return on the BOI AXA Advantage ELSS fund, ie, 41.1 percent. This means that if you had chosen a SIP investment of Rs 10,000 per month, you would have gotten Rs 6,28,455 after the 3-year lock-in period.
Canara Robeco Equity Tax Saver
Canara Robeco Equity Tax Saver has also garnered full five stars by Value Research. According to the analysis, the ELSS fund on a lump sum investment of Rs 1 lakh has given returns of 26.68 percent, while on a SIP investment of Rs 10,000 per month, the fund gave 36.34 percent returns. That means that a lump sum investment would have grown to Rs 2,03,308, while a SIP investment would have grown to Rs 5,92,242.
Mirae Asset Tax Saver
Another five-starrer credited by Value Research, the Mirae Asset Tax Saver ELSS fund, has shown handsome returns of 27.19 percent on lump sum investment of Rs 1 lakh. On a SIP investment of Rs 10,000 per month, the ELSS fund has given a return of 36.19 percent, resulting in the growth of the capital to Rs 5,95,006 after a lock-in period of three years.
Quant Tax Plan – Direct
This ELSS fund has showcased one of the highest returns over the lock-in period of three years. The Quant Tax Direct Plan ELSS fund gave a return of 38.10 on lump-sum investment, while the SIP investment has given 56.97 percent returns. According to the data, an investment of Rs 1 lakh would grow to Rs 2,63,400, while a SIP of Rs 10,000 per month would grow to Rs 7,59,900.
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