Top ELSS Funds in India

If you invest in elss mutual funds (Equity Linked Savings Scheme), you are entitled to a tax deduction under Section 80C of the Income Tax Act, 1961. ELSS funds have a maximum lock-in period of 3 years (which can help you tide over market volatility). Among all the tax-saving investment schemes permitted under Section 80 C, ELSS has the shortest lock-in period.

These funds invest about 80% of its corpus in stocks and equity. So, it is a risky investment option. However, like other equity-related investments, the chances of accruing high returns are there. To invest in ELSS, your investment horizon should stretch from 5-7 years, which will balance out the market highs and lows. That is why the elss fund is an ideal way to multiply your wealth over a period of time.

Here are some recommended ELSS Mutual Funds you can invest in the –

1. Axis Long-term Equity Fund: this wildly successful Mutual Fund was launched on December 29, 2009. With a net worth of nearly INR 17,000 crores, it is one of the heavyweights in this category. It has weathered the market volatilities and has consistently over-reached the benchmark. 87% of its assets are in large-cap securities.
2. Franklin India Taxshield: it was launched in 1999, and it has been crossing its benchmark for the past 10 years. Its Net Asset worth is INR 3,651 Lakh. It invests 78% of its assets in stocks with excellent valuation and high growth potential.
3. DSP Tax Saver Fund: it was launched in January It follows a bottom-up investment strategy and directs 80% of its fund to large-cap stocks. Its returns for the last 3 years and 5 years have been at 14.7% and 21.2%. It has a net worth of INR 4,373 Lakh.
4. Reliance Tax Saver Fund: it was launched on 21^st September 2005 and it is one of the most aggressive ELSS funds in India. It has outperformed its benchmark in the 5 years, 7-year and 10-year categories, and out-paced ELSS average returns by 2-3 percentage points. 97% of its allocation goes into large-cap companies. Its net worth is INR 9,630 Lakh.
5. ICICI Prudential Long Term Equity Fund: it was launched on 19^th August It follows the value investment method and it has generated at 21% CAGR since then. This fund has consistently outperformed its benchmark in the last 10 years. It invests 80% of its corpus in large-cap companies. Its net assets are worth INR 5,386 Lakh.
6. Aditya Birla Sun Life Tax Relief: it was launched on 29^th March 1999 and since then has generated at 25.3% CAGR. 87% of its portfolio comprises large-cap Its approach follows a combination of value and growth styles of investment. Over the last 3 and 5 years, it has delivered returns at 16.6% and 24.1%. It has a net worth of INR 6,628 Lakh.

If you have the appetite to accept risks, then ELSS fund is an attractive option not just because it pays rich dividends but also because you can avail tax benefits. You should meticulously go over the performance of the fund and only then should you decide to invest in it.