Best Mutual Funds: Top 10 ELSS Funds to buy via SIP in Coronavirus hit stock market

Best Mutual Funds: Equity-Linked Savings Scheme or ELSS is a kind of open-ended equity mutual fund. ELSS funds invest in equity and equity-related securities of companies. What makes investment in ELSS mutual funds the most attractive is that they are eligible for tax benefits. One can save up to Rs 1.5 lakh per annum by investing in these funds. These mutual funds come with a lock-in period of three years, which means that until that time is over, investors cannot redeem their fund units. However, three years is less than the lock-in duration of many other investment options. You can invest in ELSS via lump sum or SIP mode as well, say tax and investment experts.

Commenting upon the purpose of investing in ELSS Mutual Funds Harsh Jain, COO & Co-founder at Groww said, "ELSS mutual funds are a smart way to save a significant amount of money that would otherwise go towards taxes. However, ELSS funds being purely equity funds, are dependent on market timings and hence market risks. The risks, therefore, are more than that of PPF and FD, however, potential returns are higher as well."

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Jain went on to add that for most mutual fund investors, ELSS funds are a tool to save taxes. ELSS mutual funds help investors to save taxes through tax deductions, tax exemptions, and the benefit of indexation. The 1.5 lakh rupees that one invests can be deducted from the taxable income, and returns under Rs 1 lakh are exempted from taxation. Thus ELSS enables investors to save taxes and build wealth in the process.    

Asked about the top 10 ELSS funds that one can buy in the Coronavirus hit stock market Jain listed out the following best mutual funds for investors:

1] Axis Long Term Equity Direct-G;
2] Aditya Birla SL Tax Relief 96 Direct-G;
3] ICICI Pru Long Term Equity (Tax Saving) Direct-G;
4] Franklin India Taxshield Direct-G;
5] L&T Tax Adv Direct-G;
6] DSP Tax Saver Direct-G;
7] Kotak Tax Saver Direct-G;
8] Tata India Tax Savings Direct-G;
9] Invesco India Tax Plan Direct Growth ; and
10] HDFC LT Advantage Direct-G.

Batting for ELSS Mutual Funds SIP, SEBI registered tax and investment expert Jitendra Solanki said, "One should choose ELSS Mutual Funds SIP as it can be started at the early phase of career and by going deep for more than 20 years, one can get better returns and save income tax as well." Asked about the mutual funds SIP returns in such a long period Solanki said that any of the equity mutual funds would give to the tune of 15-17 per cent returns.