Do You Invest In ELSS Mutual Funds To Save Tax?

Do You Invest In ELSS Mutual Funds To Save Tax?

What is the best ELSS tax saving mutual funds for 2018-2019? Is ELSS Mutual Fund expected to return higher in 2019? Okay, let’s try to understand the idea of ​​ELSS before answering this question. ELSS is a mutual fund to save taxes. The full form of ELSS is an equity-linked saving scheme. One can claim a deduction of up to 1.5 lakhs under 80C for the amount invested in ELSS. Any amount over 1.5 lakh is not eligible for 80C exemption. ELSS is the best option to save taxes. Let us take a quick look at the features, benefits of ELSS after understanding the concept of ELSS.

 ELSS Fund Features

  • ELSS is a diversified, tax-saving mutual equity fund. In the equity market, ELSS invests in the majority of a corpus.
  • ELSS mutual funds have both dividend and growth options.
  • Each form of the fund has a lock-in of 3 years from the date of purchase.
  • With a minimum investment of Rs 500, you can start SIP (Systematic Investment Planning) on ​​ELSS.

Investment benefits in ELSS mutual funds

  • Investments in ELSS create two objectives (1) savings tax (2) wealth creation
  • A tax deduction of 1.5 lakh can achieve by investing in ELSS under Section 80C of Income Tax Deduction.
  • ELSS comes with Lock-in 3 years. This lock-in period is the shortest, relative to other tax-saving strategies such as tax-saving fixed deposits and PPF.
  • The expected return in ELSS is higher than other PPF or tax-saving FD, tax-saving instruments.
  • ELSS funds fall within the same class of EEE (exempt-exempt-exempt) as PPF and Sukanya Samriddhi Account.
  • The investment amount under this fund earns a tax deduction, the withdrawal amount is tax-free and no tax will be charged for capital gain also.
  • There is also a tax-free dividend from ELSS investments.
  • ELSS funds also provide the option of SIP investment, which leads to discipline in regular investment.
  • ELSS is the best tool for tax savings in terms of expected returns, lock-in and periodicity of investment.


  1. Investment in ELSS (SIP or Lump sum): Lock-in-period is three years, Expected return 12-15%, Tax- EEE, Risky and return type – Variable gain.
  2. Investment in PPF (Lump sum): Lock-in-period is 15 years, Expected return 7.60%, Tax- EEE, no risk and return type – Fixed return.
  3. Investment in Tax saving FD (One-time investment): Lock-in-period is five years, Expected return 7.8%, Tax- EEE, no risk and return type – Fixed return.

Now you can tell from the above example that the best Elss funds to invest in 2019

  • ELSS invests in the equity market. It makes the investment option for ELSS scheme risky.
  • The return of ELSS funds is variable. You can earn negative returns in the event of a stock market crash.
  • The ELSS lock-in period is three years. It means that you will have to wait at least three years.s


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