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Effective tax planning should begin at the start of the financial year rather than at the last minute. Delaying investments can lead to missed opportunities for wealth creation. Section 80C of the Income Tax Act allows individuals to claim deductions by investing in eligible instruments. Among these, Equity Linked Saving Schemes (ELSS) stand out due to their dual benefits of capital appreciation and tax savings.
ELSS is a diversified equity scheme with a mandatory lock-in period of three years from the date of investment. If you opt for a Systematic Investment Plan (SIP), each installment follows a three-year lock-in period from its respective investment date. Investors can choose between growth and dividend options. Both long-term capital gains and dividends from ELSS are tax-free, making it a superior choice over traditional fixed-income instruments like PPF, NSC, and Fixed Deposits.
As per CRISIL rankings (returns as of the latest evaluation), the top-performing ELSS mutual fund schemes include:
This fund has delivered an annualized 3-year return of nearly 30%, consistently outperforming its peers. It has a large-cap bias, with key holdings including HDFC Bank, Kotak Mahindra Bank, TCS, HDFC, and Sun Pharma, which together form 32% of the portfolio. Its diversified sectoral allocation ensures lower volatility and stable returns.
With a 3-year annualized return of approximately 25%, this fund has demonstrated strong performance while maintaining volatility levels comparable to its peers. The top 10 holdings account for 43% of its portfolio, with a primary sectoral focus on Banking/Finance, Automobiles, and Services.
This fund has provided 3-year and 1-year annualized returns of 24% and 15%, respectively. Its well-diversified portfolio consists of large-cap stocks like Honeywell Automation, Sundaram Clayton, Bayer Cropscience, ICRA, and Kotak Mahindra Bank. The top 10 holdings form 42% of the portfolio, while Banking/Finance, Automobiles, and Services contribute around 50%.
Offering 3-year and 1-year annualized returns of 24% and 11%, this fund maintains an average risk profile relative to its category. The top 5 holdings include HDFC Bank, Idea Cellular, Bharti Airtel, Indusind Bank, and Kotak Mahindra Bank, accounting for nearly 32% of the portfolio. Sector-wise, Banking/Finance, Telecom, and IT make up 53% of the allocation.
With 3-year and 1-year returns of 23% and 11%, respectively, this fund ranks lower in volatility compared to its competitors. Its top 5 holdings—HDFC Bank, Infosys, Indusind Bank, ICICI Bank, and Bharti Airtel—constitute 24% of the portfolio, while the top 10 holdings make up 37%. The primary sectors covered are Banking/Finance, IT, and Pharma, comprising 49% of the fund’s portfolio.
This ELSS wealth creator tax saver fund has achieved a 3-year annualized return of 21%, in line with ELSS category averages. Its growth-focused investment strategy emphasizes cyclical sectors such as Banking & Finance, Automobiles, Capital Goods, and Mining, while also maintaining exposure to IT and Pharmaceuticals. With top 5 holdings—HCL Technologies, HDFC Bank, Cipla, Thomas Cook, and Power Grid—accounting for just 34%, it ensures strong diversification.
Liquidity is a key factor in tax planning investments. While there is no universal rule, it largely depends on an investor’s financial circumstances, including income, fixed expenditures, savings patterns, existing assets, and asset liquidity. Investors should ensure they are comfortable with the lock-in period and liquidity aspects before making ELSS investments.
Equity Linked Saving Schemes (ELSS) should be an integral part of every investor’s mutual fund portfolio. With long-term investment horizons, they not only enable significant income tax savings but also foster wealth creation for future financial goals.
For professional guidance on selecting the best ELSS funds, consult a trusted mutual fund advisor in Kolkata. Univesto, a SEBI-registered mutual fund advisor in Kolkata, offers expert assistance for investors looking to optimize their portfolio. Whether you’re searching for independent mutual fund advisors near me in Kolkata or reliable mutual fund advisors in Kolkata, Univesto provides the right support to help you make informed investment decisions.