Best ELSS Funds to Invest in 2023, Best SIP to Invest in 2023
Best ELSS Funds to Invest in 2023, Best ELSS Mutual Funds to Invest in 2023, Best SIP to Invest in 2023 - NewsWiseStories
Hello friends, we are going to discuss a most awaited and interesting topic today and that is "Best ELSS Funds to Invest in 2023". Everyone must be thinking where there can invest in mutual funds to get the maximum returns and grow their hard earned money as well as get the tax benefit as well. For this, you can definitely choose to invest in ELSS Mutual Fund.
Table of Contents
- What is ELSS Mutual Fund
- Why to prefer ELSS over other Tax-saving instruments
- Who should invest in ELSS
- Why invest only in best ELSS
- How to invest in ELSS
- Which are the best ELSS Mutual Funds to invest in 2023
- Which is the best SIP to invest in 2023
- Taxation on the ELSS funds returns
- Loan Facility Against ELSS Investment
- Conclusion
- Frequently Asked Questions (FAQ)
What is ELSS Mutual Fund?
Equity Linked Savings Scheme (ELSS) funds are equity funds that let you invest for long-term goals while saving tax on that. A tax deduction under Section 80C of the Income Tax Act of 1961 will be available for investments in these ELSS funds and maximum investment allowed in these type of funds are up to Rs. 1.5 lakh per year. These ELSS plans have a 3-year lock-in term and invest the majority of their fund corpus in equity and equity-related products. An ELSS scheme changes into an open-ended scheme after this time period.
The best ELSS mutual funds' main goal is to enhance portfolio return over the long term while providing tax advantages. For this reason, these funds are also called as "Tax Saving Mutual Funds".
Why to prefer ELSS over other Tax-saving instruments?
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For the purpose of giving you the best results, SEBI defines ELSS (tax saving mutual funds) as equity-oriented mutual funds that invest at least 80% of their total assets in equities and equity-related instruments (such as shares, stocks, etc.), with the remaining 20% going mostly into debt instruments, which also shows that the ELSS is a diversified portfolio.
Who should invest in ELSS?
These ELSS funds are for those who would like to invest some amount regularly and systematically for at least 3 years, which is the lock-in period for these type of funds. These funds are also for those who would like to save some Tax if invested. These give the opportunity to also invest in the market linked equity products means more returns in long term horizon, but be mindful of the higher risk associated to it. However if investment is on a long term, the the risk becomes less.
Why invest only in best ELSS?
Investing in ELSS funds is itself a good decision but Investing in the best ELSS funds is the best decision one can make to grow the hard earned money in long term.
Since you are investing your hard earned money, you should be careful also on the choice of Elss funds before investing. You should check the fund's past performances like 3, 5 or 10 years, and investment strategies, where those funds are investing again, and mutual funds managers history etc...
ELSS funds can be growth oriented, value oriented or a mix of value and growth oriented. Good ELSS funds managers allocate the funds wisely and actively in mid caps and small caps to deliver excellent performance, which we recently witnessed as well.
How to invest in ELSS Funds?
Investing in ELSS mutual fund is super easy like Investing in any other mutual funds.
You just need to visit any brokerage website like Etmoney, Zerodha, Upstox, 5paisa, Groww etc.. Just complete the KYC digitally, chose the mutual fund scheme there and start SIP to invest.
One suggestion is that don't wait till January to March for investing in Elss mutual funds like many people do since they offer tax savings option, rather invest from today or from April to get maximum returns on your investments.
Which are the best ELSS Mutual Funds to invest in 2023?
There are many ELSS mutual funds in India, but we will see top 5 best ELSS Mutual Funds to invest in 2023, and here are they:
| Fund Name | Current NAV | 5 Yrs Return | 4 Yrs Return | 3 Yrs Return | AUM | Expense Ratio | Risk Type | Fund Manager |
|---|---|---|---|---|---|---|---|---|
| Quant Tax Plan | ₹280.7175 | 25.42% | 30.28% | 42.66% | ₹3,733.50 Cr. | 0.57% | Very High | Mr. Ankit Pande |
| Mirae Asset Tax Saver Fund | ₹37.68 | 17.72% | 18.80% | 26.24% | ₹15,837.70 Cr. | 0.5% | Very High | Mr. Neelesh Surana |
| Canara Robeco Equity Tax Saver | ₹138.31 | 17.40% | 18.64% | 26.28% | ₹5,472.69 Cr. | 0.53% | Very High | Mr. Vishal Mishra |
| Kotak Tax Saver Fund | ₹95.121 | 16.93% | 17.87% | 26.90% | ₹3,687.18 Cr | 0.6% | Very High | Mr. Harsha Upadhyaya |
| DSP Tax Saver Fund | ₹98.935 | 16.45% | 17.77% | 26.22% | ₹10,876.84 Cr. | 0.78% | Very High | Mr. Rohit Singhania |
You can use the below SIP calculator to check how much of the maturity value and return getting accumulated by putting the SIP amount per month, time horizon in years and expected rate of return to get idea..
ELSS SIP Calculator :
Click Here 👉 for SIP Calculator
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Which is the best SIP to invest in 2023?
If we would like to discuss which is the best Sip to invest in 2023 in ELSS category, then you can consider any one of the above given ELSS fund to invest after thorough investigation.
My preference would be either Quant Tax Plan or Mirae Asset Tax Savor Fund.
But, this is my personal choice, don't blindly consider it. You do your proper check and research before investing in these funds or any kind of mutual funds.
Taxation on the ELSS funds returns :
Since the ELSS funds are tax saver funds, they offer tax benefits as well under the section 80c. These funds have a lock in period of 3 years, so upon sale of the funds units, the tax is applicable on the profits. Since the sale is only after 3 years of initial investment, this attracts Long Term Capital gain tax (LTCG).
LTCG is 10% over and above the aggregate limit of 1 lakh. In comparison to this another good tax saving product such as PPF can be considered, which has a very long lock in period as 15 years, and tax free interest but interest rate of return is less. But, long term investment in ELSS with higher return and tax benefit is a good deal despite of LTCG tax deduction.
Loan Facility Against ELSS Investment :
Let me tell you folks that if you are willing to break the 3 years lock in period, then you can't break it and you can't withdraw money from these funds before 3 years.
But, if you need money urgently, then you can take a loan against your ELSS fund, though many people don't look for this option due to lack of knowledge how it works or how beneficial it can be.
The loan amount is usually equivalent to 50% to 60% of the investment value and the loan on ELSS funds itself comes at very low-interest rates of 9 to 10%.
Conclusion:
I tried to cover the details related to the best ELSS funds to invest in 2023 in this article. Hope you found it useful. Remember to share it as much you can with your family and friends so that they will also be educated and do informed decision while investing in mutual funds. If you still are in doubt, remember to consult a financial advisor or conduct thorough research before making any investment decisions, as market conditions and fund performance can vary over time.
Frequently Asked Questions (FAQ)
Question : What are ELSS funds?
Answer : ELSS stands for Equity Linked Savings Scheme. It is a type of mutual fund in India that offers tax benefits under Section 80C of the Income Tax Act.
Question : Why should I consider investing in ELSS funds?
Answer : ELSS funds offer dual benefits of tax savings under section 80c and capital growth. However, they have a lock-in period of 3 years, as well as ELSS funds are the shortest among tax-saving investment options.
Question: How do I select the best ELSS funds to invest in for 2023?
Answer: You should at least consider the following factors while selecting the best ELSS funds :
Past performances, Expense ratio, Risk profile,
Fund size, Funds Managers track record etc..
Question : Can you recommend some of the best ELSS funds to invest in for 2023 in India?
Answer : Here are some ELSS funds that have historically performed well and are popular among investors include:
Quant Tax Plan, Mirae Asset Tax Saver Fund, Canara Robeco Equity Tax Saver, Kotak Tax Saver Fund, DSP Tax Saver Fund.. Some more good funds are these also :
SBI Long Term Equity Fund, ICICI Prudential Long Term Equity Fund, Axis Long Term Equity Fund.
Please note that past performance is not a guarantee of future returns, and it is essential to conduct thorough research or consult a financial advisor before making any investment decisions.
Question : What is the minimum investment amount for ELSS funds?
Answer : The minimum investment amount for ELSS funds depends upon the fund you are selecting and the fund houses. However it is mostly Rs 500. But, you can check the minimum investment criteria of the fund you are interested in to invest.
Question: What is the lock-in period for ELSS funds?
Answer: Almost all ELSS funds have a lock-in period of 3 years. This means your investment cannot be withdrawn for a minimum period of 3 years from the date of investment. After the lock-in period, you can choose to either withdraw your investment or stay invested based on your financial goals.
Question: Are ELSS funds risky?
Answer: ELSS funds invest in equity and equity-related instruments, which carry a certain level of risk. The value of your investment can fluctuate with market movements. However, over the long term, equities have the potential to provide higher returns compared to other asset classes. You have to assess your risk tolerance first and then invest accordingly.
Question: Can I invest in ELSS funds through a Systematic Investment Plan (SIP)?
Answer: Yes, most ELSS funds offer the option to invest through a Systematic Investment Plan (SIP). SIP allows you to invest a fixed amount at regular intervals (monthly, quarterly, etc.) rather than making a lump sum investment.
Question: Are ELSS funds tax-free?
Answer: ELSS funds are not entirely tax-free and come for tax deductions under Section 80C. The returns generated from ELSS funds are subject to long-term capital gains tax if exceeding Rs 1 lakh in a financial year with 10% tax.
Disclaimer :
Mutual Funds investments are subject to market risks, read all scheme related documents carefully. Past performance is not an indicator for future returns.
The figures are for representational purposes only and do not offer any guarantees. The figures have been calculated based on historic returns of top performing mutual funds.
Happy Investing !!! 🙏🙏🙏
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