After the shock to the economy due to the pandemic, people are now more cautious and prudent to enter the equity market and invest their capital. Of course, Mutual Funds are one of the interesting options to invest, but people also want to save tax, and hence go for the modified version of Mutual Fund – Equity Linked Saving Scheme (ELSS) Fund.
Under Section 80C of the Income Tax Act, a person is exempted from tax on the money he invests in ELSS, up to Rs 1.5 lakh. Those who are comfortable with the lock-in period associated with ELSS funds, which is 3 years, should definitely consider using this instrument to get good returns and grow their capital.
Value Research, a financial advisory firm, has analyzed an array of ELSS funds to find out the best options available. Here are the top five stocks rated by Value Research:
BOI AXA Tax Advantage
With a return of 31.61 per cent on a lump sum investment of Rs 1 lakh, BOI AXA Tax Advantage ELSS Fund has secured five stars from the firm for delivering a return of Rs 2,27,969 in a lock-in period of three years. Value Research has also mentioned the SIP return on BOI AXA Advantage ELSS Fund i.e. 41.1 per cent. This means that if you had opted for a SIP investment of Rs 10,000 per month, you would have got Rs 6,28,455 after the lock-in period of 3 years.
Canara Robeco Equity Tax Saver
Canara Robeco Equity Tax Saver has also received full five stars by Value Research. As per the analysis, ELSS Fund has given 26.68 per cent return on lump sum investment of Rs 1 lakh, while the fund has given 36.34 per cent return on SIP investment of Rs 10,000 per month. This means the lumpsum investment would have increased to Rs 2,03,308, while the SIP investment would have increased to Rs 5,92,242.
Mirae Asset Tax Saver
Another five-starrer credited by Value Research, Mirae Asset Tax Saver ELSS Fund has shown an impressive return of 27.19 per cent on a lump sum investment of Rs 1 lakh. On SIP investment of Rs 10,000 per month, ELSS Fund has given a return of 36.19 per cent, resulting in capital appreciation to Rs 5,95,006 after a lock-in period of three years.
Quant Tax Plan – Direct
This ELSS fund has given the highest returns with a lock-in period of three years. Quant Tax Direct Plan ELSS Fund has given a return of 38.10 per cent on lump sum investment, while SIP investment has given a return of 56.97 per cent. According to the data, an investment of Rs 1 lakh will increase to Rs 2,63,400, while a SIP of Rs 10,000 per month will increase to Rs 7,59,900.
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