This is why you need to plan out your investments well before the due date of 31st March. Ideally, you should begin investing at the start of a new financial year itself, but don't be concerned if you didn't do that. You can still make use of the coming 6 months to fulfill your tax-saving obligations and get the best out of your ELSS fund investments.

Let's suppose you have Rs 1 lakh of the 80C limit left to invest in ELSS funds. The mistake you shouldn't make here is investing that entire amount in one go. Equity-based investments earn higher returns when they are spread out over a period of time. This is why systematic investment plans (SIP) are recommended by below. What you should do is divide the amount you want to invest in ELSS funds for this financial year into 6 parts and invest it every month from October to March. This will allow you to benefit from rupee cost averaging and purchase fund units at different levels of the market. It will also allow you to make sure that you don't catch a market peak.

Once you have the exact amounts to be invested, you can split it across more than one ELSS fund to benefit from diversification and different investment styles. A portfolio of 3 ELSS funds would be ideal for most tax-savers. Pick ELSS funds on the basis of their historic performance. A fund that has done well over different market cycles would be best placed to navigate the uncertainties of the equity markets in the future. Furthermore, investing in more than one fund cushions your portfolio against the underperformance of any one of your funds.