If you are looking to invest in tax saving mutual fund schemes, there are many options. Primarily, these are the equity linked saving schemes, which offer you a tax saving under Sec 80C of the Income Tax Act. A sum of upto Rs 1.5 lakh, can give you a tax benefit and you save immensely, especially if you are in the highest tax bracket. The one thing to note is unlike assured returns from schemes like PPF, Bank deposits etc., here the returns are not guaranteed and hence there maybe an element of risk. Following are some of the best tax saving mutual fund schemes that you could invest in.
Motilal Oswal Long-Term Equity Fund
Value Research Online has accorded a 5-star rating for the fund. The fund has generated a 3-year returns of 12.5 per cent.
It has investment in some quality stocks like HDFC Bank, ICICI Bank, Axis Bank and HDFC Life Insurance. It is important to remember, that Equity Linked Saving Schemes have a lock-in period of 3-years.
The growth scheme of the fund has an NAV of Rs 19.78 and the fund has an asset size of Rs 1,500 crores. This is a good tax saving mutual fund scheme to consider going by its track record of the last few years and the solid quality stocks that it holds.
Mirae Asset Tax Saver Fund
This fund again has a 5-star rating from Value Research Online. The assets under management is to the tune of Rs 2,400 crores.
Here again the fund has holdings in high quality financial stocks including the likes of HDFC Bank, ICICI Bank, State Bank of India and Axis Bank. Apart from this the top 5 holdings also includes Reliance Industries. The fund has generated a 1-year return of 16 per cent, while the three year returns has been close to 13.80 per cent.
The returns from the fund are pretty decent for investors who have had a medium term perspective in mind. The current net asset value of the fund is Rs 18.37 under the growth plan.
JM Tax Gain Fund
JM Tax Gain Fund has given superlative returns in the last one year. The one year returns is at 24 per cent, while the three year returns is at 12.25 per cent.
Here again, the top portfolio is heavily skewed in favour of financials including the likes of HDFC Bank and Bajaj Finance.
The net asset value under the growth plan is Rs 18.41. Investors looking to 5-year holding do have a chance to make money and save tax. As informed earlier, there is a lock-in period for those looking to invest in all of the ELSS schemes mentioned above. You cannot exit the schemes before a period of 3-years.
Invesco India Tax Plan
Invesco India Tax Plan is also a good bet for those looking to save tax. The fund has generated a return of 15 per cent in the last one year. The company has holding in high quality stocks including the likes of HDFC Bank, Reliance Industries, ICICI Bank and HDFC.
If you want to buy the fund, the current net asset value under the growth scheme is Rs 52.96. You can invest with a minimum of Rs 500 and an amount of your choice thereafter.
This is a good scheme for those who have a long-term perspective in mind. Investors should also remember, that investing in equities is risky and returns are never assured.
Kotak Tax Saver Regular Plan
Kotak Tax Saver regular plan has also offered very good returns of 17.37 per cent in the last one year. The fund has investment in good quality stocks including the likes of Reliance Industries, ICICI Bank and HDFC Bank.