These 3 Tax Saving Mutual Funds You Can Consider For SIP

As the current financial year, 2021-22 is about to end, the financial year's tax-saving activity must be completed by March 31, 2022, and its importance. To avail of tax benefits Taxpayers must make new investments in specific items for the current financial year to qualify for a deduction under section 80C of the Income-tax Act, 1961. However, if you are low on cash and have previously invested in equities mutual funds/equity shares, there is a strategy that can help you avoid tax in the current fiscal year.

Investment in ELSS Mutual Funds

Long-term capital gains (LTCG) on equities mutual funds and equity shares are exempt up to Rs 1 lakh in a financial year under existing income tax laws. If you made investments in equities shares and equity mutual funds in the previous financial year and now withdraw the invested money in the current financial year, then from LTCG will be exempted up to Rs 1 lakh under section 80C of Indian Income Tax Act, 1961.
 

If you haven't made any investment in ELSS mutual funds then this year you can start with these top-rated funds with promising returns on a 3-year SIP. ELSS mutual funds comes with 3-year lock-in period. 

Top Performing ELSS Mutual Funds SIP (3-year lock-in period)

Quant Tax Plan - Direct Plan-Growth

It is a 9-year-old fund, launched on 01 January 2013. With Rs 855.21 Crores Assets Under Management, the fund has given good returns over the year. The NAV as of 15th March 2022 is 224.7737 and the expense ratio is 0.5%. Its expense ratio is less than its category average expense ratio. It is a highly risky fund to invest. The minimum SIP amount to invest in this fund is Rs 500. Looking at the returns of the fund over the years, it outperformed the category average returns. On 3 year SIP, it has given 85.49% returns.

The fund has the majority of its money invested in the Services, Financial, Construction, Consumer Staples, Metals & Mining sectors. It has taken less exposure in Services, Financial sectors compared to other funds in the category.

IDFC Tax Advantage (ELSS) Fund - Direct Plan - Growth

It is an open-ended ELSS fund launched on 1 January 2013 by the IDFC Mutual Fund house. The fund has Rs 3,428 Crores worth of assets under management. And the NAV is 103.34 as of 15th March 2022. The fund has an expense ratio of 0.68%, which is less than its category average expense ratio and what most other ELSS funds charge. The minimum SIP amount in this fund is Rs 1,000. It is a highly risky fund, and investors can suffer losses as well. The fund has given promising returns over the years. The fund outperformed the category average returns. On a 3-year lock-in SIP, the refund poured 55.25% returns. 

The fund has the majority of its money invested in Technology, Materials, Automobile, Financial, Capital Goods sectors. It has taken less exposure in the Financial, Technology sectors compared to other funds in the category.

 
BOI AXA Tax Advantage Fund - Direct Plan-Growth

It is a tax-saving fund from the BOI AXA Mutual Fund house, launched almost 9 years back on 01 January 2013. As of 31 January 2022, the fund has Rs 538.52 Crores worth of assets under management. The fund's current NAV is Rs 104.79 as of 15 March 2022. The fund's current expense ratio of the fund is 1.52%. Its expense ratio is higher than its category average expense ratio. The minimum investment amount required in this fund is Rs 500. It is a highly risky fund to invest in. Investors should read understand the fund before making any decision. Its return performance is good when compared to category average returns. However, they didn't perform well in 1 year when compared to category average returns. On 3 year sip, it has given 49.55% returns. 

The fund has the majority of its money invested in the Financial, Technology, Healthcare, Materials, Capital Goods sectors. It has taken less exposure in the Financial, Technology sectors compared to other funds in the category.

Returns

Lump Sum Investment - Annualised Returns 

ELSS Funds	3-Year	5-Year	Since Inception
Quant Tax Plan - Direct Plan - Growth	34.02%	23.44%	20.95%
IDFC Tax Advantage (ELSS) Fund - Direct Plan - Growth	20.17%	17.41%	18.09%
BOI AXA Tax Advantage Fund - Direct Plan - Growth	25.09%	19.06%	17.64%

SIP Investment- Absolute Returns

ELSS Funds	3-Year	5-Year
Quant Tax Plan - Direct Plan - Growth	85.49%	111.23%
IDFC Tax Advantage (ELSS) Fund - Direct Plan - Growth	55.25%	65.93%
BOI AXA Tax Advantage Fund - Direct Plan - Growth	49.55%	66.92%

Source - Money Control

 

Disclaimer

Mutual fund investments are subject to market risk. Read all scheme-related documents, and Terms and Conditions carefully before investing. The above-mentioned information is purely informational and doesn't guarantee any return. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.