Personal Finance

As deadline to declare tax proofs nears, here's a list of top 10 ELSS funds to invest in

Updated : December 21, 2020 07:28 PM IST

Equity Linked Saving Scheme or ELSS, a type of mutual fund, has emerged as one of the most popular investment avenues for tax savings.

The investments made in ELSS are eligible for tax benefits under section 80C of the Income Tax (I-T) Act.

Equity Linked Saving Scheme or ELSS, a type of mutual fund, has emerged as one of the most popular investment avenues for tax savings. The investments made in ELSS are eligible for tax benefits under section 80C of the Income Tax (I-T) Act.

One can claim deductions of as much as Rs 1.5 lakh via contributions in the ELSS funds.

Along with tax planning, ELSS funds are also considered ideal for wealth creation. ELSS provides the benefit of diversified equity investments that allows one to earn better returns. Like any other equity scheme, they have the capability of generating good tax-efficient returns if the scheme performs well (in the long term), experts opine.

Also read: Here's how you can make 2021 your best tax saving year

Another advantage of ELSS funds is that it has the lowest lock-in period i.e. three years. This is helpful for somebody who doesn't wish to invest for longer. ELSS offers flexibility to redeem or remain invested with their full/partial investment after the mandatory lock-in period of 3 years.

As ELSS comes with a statutory lock-in of three years, selecting a proper ELSS fund is very important. Experts suggest investors analyze and compare various funds from all perspectives before choosing one. Investors can evaluate the fund's performance in the past years by checking the benchmark returns before selecting the ELSS fund.

Also read: Looking to invest in 2021? Here are the best investment options

Here's a list of top-performing ELSS funds as of now based on the past years' returns, fund house overall performance and consistency (Compiled by PaisaBazaar - an investment marketplace):

Fund Name	Returns (%)
Fund Name	1 year	3 year	5 year	7 year	10 year
Canara Robeco Equity Tax Saver	24.86	13.11	13.71	15.79	12.30
Axis Long Term Equity	18.64	12.41	14.26	19.29	16.51
Mirae Asset Tax Saver	19.65	10.80	—	—	—
Invesco India Tax Plan	16.36	8.67	12.5	16.81	13.07
Kotak Tax Saver	14.39	7.81	12.52	16.23	10.51
ICICI Prudential Long Term Equity	12.61	7.45	10.19	14.52	11.51
DSP Tax Saver	14.23	7.11	13.19	16.83	12.52
Tata India Tax Savings	10.29	5.67	11.97	16.64	12.47
Aditya Birla Sun Life Tax Relief 96	11.64	4.82	11.18	16.35	11.68
Motilal Oswal Long Term Equity	7.55	3.97	12.70	—	—
ELSS category average	14.72	5.75	11.10	14.82	10.95
Returns as on December 18, 2020
Source: Paisabazaar.com

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

As deadline to declare tax proofs nears, here's a list of top 10 ELSS funds to invest in

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