Why does ELSS make sense for Investing in this tax season?
Equity Linked Savings Schemes (ELSS) are a type of Equity Mutual Fund that invests in stocks with the extra benefit of tax savings under Section 80 C of the Income Tax Act. If you use the entire money at the highest tax rate and plan your investments in such a scheme, you might potentially save up to $44,500 in taxes.
The ELSS scheme has been the most well-liked tax harvesting method for tax savers due to its dual advantages of saving tax on investments and also benefiting from the return on investment by enjoying a favorable tax treatment under capital gains tax since it is only subject to 10% of tax on gains after the lock-in period expires.
A perpetual SIP in ELSS is the ideal approach to invest since you can continue to receive benefits for all of your investing years while still having the ability to save money to increase your wealth. You can invest lump sums or SIPs depending on your needs.
Comparing ELSS schemes to other investment choices like PPF, FD, insurance, etc., they also have a considerably shorter lock-in time.
You can build wealth out of your 80 C savings if you practice investment discipline each month, giving you a double saving advantage.
What are the finest plans to use if you prefer to save money and file your taxes?
Here we go...
The top schemes
- Canara Robeco Tax Saver - consistently beats the benchmark NIFTY 500 TRI index
- Parag Parikh tax saver
- Mirae Asset Tax saver
- Mirae Asset Tax saver
Reason to choose the funds:Consistently beats the benchmark NIFTY 500 TRI index on a 3-year rolling period and provides better risk-adjusted returns
The fund performance and key factors are as below
| Fund performance on Lumpsum & SIP | Lumpsum | SIP | ||||
|---|---|---|---|---|---|---|
| Scheme | Rating | Assets (Cr) | 3 Years | 5 Years | 3 Years | 5 Years |
| Canara Robeco Equity Tax Server | 4.5 | 3,413 | 14.63 | 12.81 | 17.13 | 16.75 |
| Mirae Asset Tax Server | 4 | 14,190 | 16.82 | 12.4 | 17.89 | 16.71 |
| Parag Parikh Tax Server | 5 | 1,004 | 21.72 | NA | 23.12 | NA |
| Quant Tax Plan | 5 | 2,681 | 36.85 | 20.43 | 36.05 | 29.85 |
Note:
- Performance shown is Compounded Annual Returns for lumpsum & SIP
- Past performance may or may not be representative of the future performance
- Please read the fund factsheet before making your decision
- Special advice: Consult with your tax professional before making your investment decision
Please note: You need to save before March 2023 to avail of tax benefits in this financial year. Also, most companies ask for proof to be submitted before Feb or latest by 15th March 2023 to avoid tax deduction at source. So act quickly before it's too late
For any further queries please visit our Mutual fund page https://www.compositedge.com/mutual-funds
Alternatively, you can reach out at 98447 00001 or mail to
mutualfunds@compositeinvestments.com