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4 Best Tax Saver Funds For Long Term Investors

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The most popular tax-saving provision among taxpayers is Section 80C. Investments in the tax-saving instruments under Section 80C are well suited for those who wish to minimize his or her tax debt. The range of tax-free vehicles under this provision is substantial, which includes life insurance premiums, PPF contributions, five-year term deposits, NPS, 5-Year NSC and so on but one with a separate taste. The grab of bread with butter is the ELSS (Equity Linked Savings Scheme), which is the only mutual fund investment option that not only offers tax deductions under Section 80C of the Income Tax Act of 1961, but also leads to wealth generation.

 

A few of the finest features of ELSS that attracts investors is that it has a diversified allocation across equity or equity-oriented and debt instruments and a three-year lock-in term, which is the shortest among all investment options under 80C. Hence, if you're looking for a higher long-term return than standard choices like PPF and Fixed Deposits, as well as Section 80C deductions, these are the four best tax-saver funds to invest in.

Quant Tax Plan Direct Fund

Quant Tax Plan Direct Fund

Quant Tax Plan Direct-Growth Fund has a total asset under management (AUM) of Rs 204 crore, with a current net asset value (NAV) of Rs 204.02 as of June 21, 2021. The 1-year returns of the Quant Tax Plan Direct-Growth are 117.83 per cent and the fund's 3-year and 5-year returns are 30.95% and 24.63% respectively. The healthcare, financial, FMCG, communication, and metals sectors comprise the majority of the fund's holdings. ITC Ltd., ICICI Bank Ltd., Bharti Airtel Ltd., State Bank of India, and ICICI Securities Ltd. are the fund's top five holdings. The fund has an expense ratio of 0.50% and one can start SIP with a minimum amount of Rs 500 with no exit load.

BOI Axa Tax Advantage Direct-Growth Fund
 

BOI Axa Tax Advantage Direct-Growth Fund

The fund presently has Rs 453 crore in assets under management (AUM) and a NAV of Rs 97.88 as of June 21, 2021. The fund has returned 71.96 per cent in the last year, with returns of 18.44 per cent and 20.25 per cent in the previous three and five years, respectively. The fund has a 1.67 per cent expense ratio, which is higher than the category average, and the minimum SIP is Rs 500 with no exit load. The fund's top equity sectors are chemicals, healthcare, financial services, and technology, with HDFC Bank, ICICI Bank, Infosys, Divi's Laboratory Ltd., and Laurus Lab Ltd. as its top five holdings.

Mirae Asset Tax Saver Fund

Mirae Asset Tax Saver Fund

Mirae Asset Tax Saver Fund Direct-Growth returns have been 70.47 per cent over the last year. It has returned 21.47% and 22.93% over the last 3-years and 5 years. The bulk of the capital in the fund is allocated across the financial, technology, energy, auto, and healthcare sectors. HDFC Bank Ltd., ICICI Bank Ltd., Infosys Ltd., Axis Bank Ltd., and Tata Consultancy Services Ltd. are the fund's top five holdings. The fund presently has Rs 7,940 crore in assets under management (AUM) and a NAV of Rs 30.12 as of June 21, 2021. The fund has an expense ratio of 0.48% and the fund's 1 to 5-year returns are higher than the category average returns.

Canara Robeco Equity Tax Saver Fund

Canara Robeco Equity Tax Saver Fund

Canara Robeco Equity Tax Saver Direct has a 1-year growth rate of 67.23 per cent. Over the previous three to five years, it has returned 20.77 per cent and 19.04 per cent, respectively. The fund has the equity sector allocation across the Financial, Technology, Construction, Automobile, Engineering sectors. Infosys Ltd., HDFC Bank Ltd., ICICI Bank Ltd., Larsen & Toubro Ltd., and Tata Consultancy Services Ltd. are among the top five holdings of the fund. As of June 21, 2021, the fund has Rs 2,227 crore in assets under management (AUM) and a NAV of Rs 109.31. The fund has a 0.87 per cent expense ratio and one can start a SIP with a minimum of Rs 500.

Best Tax Saver Funds In Terms of Returns

Best Tax Saver Funds In Terms of Returns

Funds1 year returns3 year returns5 year returnsRating by Value Research
Quant Tax Plan Direct Growth 117.83% 30.95% 24.63% 5 star
BOI Axa Tax Advantage Fund 71.96% 18.44% 20.25% 4 star
Mirae Asset Tax Saver Fund 70.47% 21.47% 22.93% 5 star
Canara Robeco Equity Tax Saver Fund 67.23% 20.77% 19.04% 5 star
Source: Value Research

Conclusion

Conclusion

ELSS schemes have outperformed other Section 80C tax-saving investment choices such as PPF, ULIP, NSC, NPS and tax-saving bank FDs in terms of returns. The explanation for this is that, according to Value Research, Tax Saver Funds have delivered excellent 5-year average SIP returns of 21.46 per cent. When we compare this return to the most common tax-saving strategies listed above, we can discover that they have beaten them by a large percentage. Because ELSS funds have the most long-term wealth-building potential, they can be an effective instrument for attaining long-term financial objectives if you invest for at least 3 to 5 years. Since nobody can promise future success, examining historical returns can only demonstrate the performance of tax saver funds under varied market behaviour. For higher returns, you should invest in Equity Mutual Funds with a direct plan option. Because direct plans have a lower expense ratio than growth plans, as a result, they can provide better long-term returns if you stay invested for 5-years.

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in

Story first published: Tuesday, June 22, 2021, 11:01 [IST]
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