InvestorQ : What are the best 2019 tax- saving funds?
Priyanka Singh made post

What are the best 2019 tax- saving funds?

Answer
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Crowny Pinto answered.
11 months ago


Equity-Linked Savings Scheme (ELSS) is a type of fund that suits your query.
I suggested ELSS for your portfolio because this is the only mutual fund that offers a tax deduction of up to Rs. 1.5 lakh under section 80C of the Income Tax Act.

Equity Linked Saving Scheme(ELSS ) are basically equity funds that provide the lock-in period is 3 years. ELSS can be structured as monthly SIPs and you can claim all the SIP contributions as exemption during the fiscal year. The real advantage of investing in ELSS is that you can synchronize your tax planning with your income flows and also get the benefit of rupee cost averaging.

The logic of investing in any ELSS funds should be the same as in the case of equity funds, all you need to do is to benchmark past returns with the benchmark index and the peer group. However, the question has two different aspects, should investment in ELSS beyond section 80C limit is good or should ELSS be redeemed on completion of 3 years? The main characteristic of ELSS is that its exemption falls in the highest tax bracket (30%), and if that limit has already exhausted there’s no point in blocking your money in ELSS. Also, it is not mandatory to `redeem your ELSS after completion of 3 years. After that period, it is like any other equity fund and hence you can redeem it as and when needed.

You can look out for some Top performing ELSS Funds in India:
Quant Tax Plan (G)
Axis Long term Equity
Kotak Saver Fund
Aditya Birla Tax Relief, and others.