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ELSS Mutual Funds Investing Strategies

   Best ELSS Funds Online

When it comes to saving tax, Equity Linked Savings Scheme (short for ELSS) of mutual funds is one of the most favoured investment options. It has a lock-in period of 3 years and has the potential to provide you high returns linked to the market. Moreover, there is no limit to making investments in these schemes. However, one should devise a proper strategy while investing in ELSS to gain good returns over a period of time. This is because the returns are market-linked and not guaranteed.

Here are four important strategies that one should adopt while investing money in ELSS.

Invest in lump-sum or in SIP mode?

The best way to invest into an ELSS is to plan ahead by taking stock of your projected Section 80C deficit at the start of the financial year, and then start a monthly SIP to cover the gap. Not only will this make it easier on your pocket, it will also smoothen your long-term returns through rupee cost averaging.

Even if you have a lump sum to invest in ELSS, it is advisable to exercise caution, given the rich market valuations right now. Lump-sums can be staggered into an ELSS by parking the money into a liquid fund, and starting an STP (Systematic Transfer Plan) that will complete the deployment into the ELSS within the requisite time frame

Should you invest in the same fund again?

Investors are at times confused on whether they can invest in the same fund in which they invested in the previous year. Also, how will they get the tax benefit and on maturity how much money they should redeem? Investors can invest in the same ELSS scheme in which they had invested their money in the previous years either in form of a lump sum or through an SIP mode. However, you need to keep a track and monitor the fund performance before investing in the same fund.

You can invest in the same ELSS every financial year. In fact, you can invest as much as you like in an ELSS scheme, but you will get tax benefits only up to the prescribed tax exemption limit of a maximum of Rs 1,50,000.

The tax benefit is given basis the transaction date, as long as the investment(s) are made in the same financial year for which you are seeking tax benefits. After completing 3 years, you can place a redemption request for the units that have completed 3 years or more

Link it to your financial goal

Make sure you align your ELSS investments to a long-term goal such as your retirement or your child's education. Doing so will remove the fixation on the 3-year lock-in period and allow you to benefit from a longer investment horizon in the process. In our view, 3 years is too short a time frame for an equity investment anyhow, and investors should ideally not confuse the mandated lock-in period with the ideal holding period for an ELSS.

Create an investment cycle

While investing money in ELSS regularly in every financial year, you can create an investment-free cycle after the third year of your investments. From the fourth year onwards you can even choose not to invest money from your pocket and still avail tax benefits. Yes, once your first year investment reaches its maturity, after the third year you can redeem the same amount and invest it in the fourth financial year to avail tax benefit. Similarly, the process can be continued for any number of years.                

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Top Performing Tax Saving ELSS Funds. Save Tax Get Rich

Top 10 Tax Saving Mutual Funds of 2018

Best 10 ELSS Mutual Funds to Invest in India of 2018

1. Tata India Tax Savings Fund 

2. Sundaram Diversified Equity Fund

3. DSP BlackRock Tax Saver Fund

4. Mirae Asset Tax Saver Fund

5. Birla Sun Life Tax Relief 96

6. ICICI Prudential Long Term Equity Fund

7. Invesco India Tax Plan

8. Reliance Tax Saver (ELSS) Fund

9. BNP Paribas Long Term Equity Fund

10. Axis Tax Saver Fund

Invest in Best Performing Tax Saver Mutual Funds of 2018

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300


You can write to us at

Invest [at] SaveTaxGetRich [dot] Com


Call us on 94 8300 8300

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ELSS Mutual Funds Investing Strategies


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