Top ELSS Mutual Funds in India

January 25, 2011   ·   1 Comments

Lesson 4: Tax Saving Mutual Funds (ELSS)

 

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Tax savings mutual funds

are mutual funds that give a tax benefit under section 80C on the income tax act. These Funds have a Lockin Period of 3 Years. These Type of Funds are better known as ELSS Schemes or Equity Linked Saving Schemes.

If you’re the type of person that works hard and your money doesn’t come to you easy, then chances are you’re looking for every possible way to save money when it comes to taxes.

Tax savings mutual funds work in a way that they are spread out over various companies and across various industries. This means the funds are very diversified and not easily liquidated. When you decide to invest in these types of funds you get a rebate at the end of the year, this is one of the biggest advantages to tax savings mutual funds.

What makes tax savings mutual funds so good?

Anyone who decides to invest in tax savings mutual funds will save the amount of tax money permissible on the fund while at the same time making money from it. The main reason for this is because these types of mutual funds usually give out a good rate of return which makes them very lucrative.

These funds are known to outperform other stocks and bonds by leaps and bounds. At the end of the year 2005 tax savings mutual funds were found to be the best performing mutual fund there was. These funds are known to appreciate in value significantly which is why it’s a good idea to use them as apart of your overall investment.

Additional Benefit of Investing Through Mutual Funds is that there is no Entery Load means You will get Units of NAV of the same Amount you have Invested in.

Some of the Comparison of the Taxing Saving Funds in terms of Systematic Investment Plan (SIP) of 1000 Rs. For Different Tenure:

Top 10 ELSS Schemes in India:

SIP Amount for Top 10 ELSS Schemes in India:

Sr. No. Name of Fund No. of Years(3) No. of Years(5)
1) HDFC Long Term Advantage (G) 54,893 95,406
  HDFC Long Term Advantage (D) 46,421 71,148
2) SBI Magnum Tax 93 Relief (G) 44,864 79,626
  SBI Magnum Tax 93 Relief (D) 42,247 63,640
3) Sundaram Tax Saver (G) 48,556 92,933
  Sundaram Taxsaver (D) 33,628 50,760
4) Reliance Tax Saver (G) – ELSS 53,120 92,861
  Reliance Tax Saver(D) – ELSS 49,130 80,860
5) HDFC Tax Saver (D) – ELSS 47,001 73,164
  HDFC Tax Saver (G) – ELSS 56,380 1,00,234
6) Birla Sun Life Tax Relief 96 (G) 45,875*
  Birla Sun Life Tax Relief 96 (D) 43,790 59,037
7) ICICI Pru Tax Plan (G) 60,602 1,01,442
  ICICI Pru Tax Plan (D) 52,448 81,410
8) Fidelity Tax Advantage(G) 55,277 93,666**
  Fidelity Tax Advantage(d) 50,845 82,810**
9) Religare Tax Plan (G) 53,662 70,909***
  Religare Tax Plan (D) 50,305 64,590***
10) DSP BlackRock Tax Saver(G) 41,637 ***
  DSP BlackRock Tax Saver(D) 50,671 62,634***
11) CanRebecco Equity Tax Saver(G) 30,205****
  CanRebecco Equity Tax Saver(D) 47,408 75,104
  • indicates the Fund has Started from the Last 32 Months & the Amount Given is Present Value after 32 Months.
  • ** indicates the Fund has Started from the Last 56 Months & the Amount Given is Present Value after 56 Months
  • *** indicates the Fund has Started from the Last 46 Months & the Amount Given is Present Value after 46 Months
  • **** indicates the Fund has Started from the Last 22 Months & the Amount Given is Present Value after 22 Months

Note:

1) This Comparison has been done on the same Day to make sure that All the NAV’s can be compared in a decipher manner.

2) Growth Amount gives the Clear Indication of the performance of the Funds as Different Funds Provide Diff.  rate of Dividend Amount.

3) G here Represents Growth Option & D here represents Dividend Option.

4) We are not benefitting from any of the Mutual Funds for this Analysis.

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If you would have put up Money LumSum, Then the Amount will be:

Absolute Returns of 11 :

Sr. No. Name of Fund No. of Years(1) No. of Years(3) No. of Years(5)
1) HDFC Tax Saver Fund(G) 20.5 % 9.0 % 15.2 %
2) Birla Sun Life Tax Plan(G) 10.0 %
3) SBI Magnum Tax Gain(G) 8.6 % -0.4 % 13.6 %
4) Reliance Tax Saver (G) – ELSS 14.0 % 6.7 % 12.5 %
5) HDFC Long Term Advantage(G) 22.1 % 6.2 % 12.2 %
6) Sundaram Tax Saver (G) 9.2 % 3.7 % 14.5 %
7) DSP BlackRock Tax Saver(G) 16.8 % 3.4 %
8) ICICI Pru Tax Plan (G) 16.3 % 8.4 % 13.1 %
9) Fidelity Tax Advantage(G) 34.4 % 9.1 % 17.4 %
10) Religare Tax Plan (G) 17.0 % 5.5 %
11) CanRebecco Equity Tax Saver(G) 19.2 %

 Verdict: Our Pick in this Pack remains Reliance Tax Saver ELSS Fund. Not only, is it the Best Performing Mutual Fund in SIP. Also, it gives an additional Benefit of Insurance. HDFC Tax Saver is also a very good fund to be in. One should not consider too much in Absolute Returns, as it varies Day to day basis. One could have got in Mutual Fund at a Very High Price if the Market Price is at this point of that Time. Best way to enter in the Market is by capping the Risk by entering at all the Points & That’s is the reason we always Recommend SIP.

Now coming back to the Reliance additional Benefit of Insurance, if you Start a SIP, you will get an Insurance of the Amount EQUIVALENT TO The amount you are going to Invest in that SIP. Max Tenure for Investing is 15 Years. Plus it will double the Insurance Amount after 2 Years.

Take an Example if you say you are starting a SIP of 1000 Rs. Monthly for 15 Years. Then The amount you are going to invest will be 1000*12*15=3,60,000 Rs.

This will be your Free Insurance Amount for first 2 Years. After 2 Years, the Insurance amount will be doubled i.e. it will go to 7,20,000 Rs.

 Which Mutual Fund you have decided now to Buy for your Tax Saving???

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Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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