Tax Saving SIP
Tax Saving SIPs (Systematic Investment Plans) in Equity Linked Savings Schemes
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SIP Plan Benefits
Start SIP with as low as ₹1000
No hidden charges
Save upto ₹46,800 in Taxunder section 80C^
Zero LTCG Tax¶
Disciplined & worry-free investing
- Insurance Companies
- Mutual Funds
|
Returns |
| Fund Name |
5 Years |
7 Years |
10 Years |
| Max Life |
24.84% |
18.57% |
|
| Tata AIA |
24.04% |
20.03% |
|
| Bajaj Allianz |
17.43% |
10.73% |
|
| HDFC Standard |
17.56% |
12.29% |
|
| Canara HSBC Oriental Bank |
11.56% |
9.27% |
|
| Bharti AXA |
15.75% |
13.48% |
|
| Birla Sun Life |
18.22% |
11.28% |
|
| ICICI Prudential |
15.71% |
11.97% |
|
| LIC |
- |
- |
|
| PNB Metlife |
20.71% |
15.98% |
|
| |
Returns |
| Fund Name |
3 Years |
5 Years |
10 Years |
| QUANT |
23.92% |
31.48% |
|
| PARAG PARIKH |
20.69% |
26.41% |
|
| EDELWEISS |
22.34% |
24.29% |
|
| KOTAK |
24.64% |
25.01% |
|
| MIRAE ASSET |
19.74% |
24.32% |
|
| PGIM INDIA |
14.75% |
23.39% |
|
| DSP |
18.41% |
22.33% |
|
| CANARA ROBECO |
20.05% |
21.80% |
|
| SUNDARAM |
18.27% |
18.22% |
|
Best Tax Saving SIP Mutual Funds in India≈
Below is the list of tax saver best SIP plans:
| Fund Name |
Risk |
1Y Returns |
Fund Size(in Cr) |
| Bandhan Tax Advantage (ELSS) Fund |
Very High |
16.8% |
₹5,160 |
| Bank of India Tax Advantage Fund |
Very High |
36.3% |
₹951 |
| Canara Robeco Equity Tax Saver Fund |
Very High |
11.6% |
₹6,041 |
| DSP ELSS Tax Saver Fund |
Very High |
18.3% |
₹16,610 |
| DSP Tax Saver Fund |
Very High |
19.1% |
₹11,693 |
| HDFC ELSS Tax Saver Fund |
Very High |
15.7% |
₹15,728 |
| Mahindra Manulife ELSS Fund |
Very High |
16.4% |
₹658 |
| Mirae Asset Tax Saver Fund |
Very High |
19.9% |
₹18,842 |
| Motilal Oswal ELSS Tax Saver Fund |
Very High |
25.7% |
₹4,414 |
| Parag Parikh ELSS Tax Saver Fund |
Moderately High |
17.1% |
₹4,506 |
| Parag Parikh Tax Saver Fund |
Moderately High |
23.8% |
₹2,137 |
| Quant ELSS Tax Saver Fund |
Very High |
4.0% |
₹10,512 |
| SBI Long-Term Equity Fund |
Very High |
20.1% |
₹27,791 |
Disclaimer: ≈ Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is done in alphabetical order (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
SIP Calculator
Monthly Investment
₹22.4 L
Top Funds with High Returns (Past 7 Years)
16.4%
High Growth Fund
16.77%
Top 200 Fund
13.2%
Accelerator Mid-Cap Fund II
13.33%
Opportunities Fund
8.64%
Equity II Fund
11.62%
Accelerator Fund
12.67%
Grow Money Plus Fund
14.04%
Multiplier
10.82%
Equity Top 250 Fund
11.19%
Future Apex Fund
10.97%
Opportunities Fund
12.76%
Frontline Equity Fund
14.2%
Virtue II
9.39%
Pension Dynamic Equity Fund
10.45%
Equity Fund
9.07%
Blue-Chip Equity Fund
What are Tax Saving SIPs?
Tax Saving SIPs, short for Systematic Investment Plans in Equity Linked Savings Schemes (ELSS), are a popular investment option in India. ELSS funds are a type of mutual fund that primarily invests in equities.
- How they work: You invest a fixed amount of money regularly (monthly, quarterly, etc.) into an ELSS fund.
- SIP Tax Benefits: The biggest advantage is the tax deduction under Section 80C of the Income Tax Act. You can claim a deduction of up to ₹1.5 lakhs per year on your investments in ELSS funds. This helps reduce your taxable income and, consequently, your tax liability.
- Lock-in Period: ELSS funds have a mandatory lock-in period of 3 years. This means you cannot withdraw your investments before the completion of 3 years from the date of investment.
Who Should Save in Tax Saving SIPs?
Tax Saving SIPs can be a suitable investment option for a wide range of individuals, especially those who:
- Fall under the tax bracket: Individuals who fall under the tax bracket and are looking to reduce their tax burden can benefit significantly from investing in ELSS funds.
- Have a long-term investment horizon: Since ELSS funds have a lock-in period of 3 years, they are most suitable for individuals with a long-term investment horizon of at least 5-7 years or more.
- Seek equity exposure: Individuals who are comfortable with the inherent risks associated with equity investments and are looking to build long-term wealth can consider investing in ELSS funds.
- Prefer systematic investing: SIPs promote disciplined investing by encouraging regular contributions, making them suitable for individuals who prefer a systematic approach to investing.
Factors to Be Considered While Investing in ELSS Funds
- Fund Performance: Choose funds with a strong track record of delivering consistent returns over the long term. Analyze their past performance, risk profile, and investment strategy.
- Fund Manager's Expertise: Research the experience and track record of the fund manager. A skilled fund manager can make a significant difference in the fund's performance.
- Expense Ratio: Compare the expense ratios of different ELSS funds. Lower expense ratios generally translate to higher returns for investors.
- Investment Objectives: Align your investment objectives with the fund's investment objectives. For example, if your goal is long-term wealth creation, choose a fund that focuses on growth.
- Risk Tolerance: Assess your risk tolerance before investing. Equity investments carry market risk, and ELSS funds are no exception.
Benefits of Tax Saving SIPs
- Tax Savings: The primary benefit is the tax deduction under Section 80C, which helps reduce your tax liability.
- Long-term Wealth Creation: Equity investments have historically outperformed other asset classes over the long term. By investing in ELSS funds through SIPs, you can benefit from the potential for long-term wealth creation.
- Power of Compounding: Regular investments through SIPs allow you to benefit from the power of compounding, where your returns earn returns, leading to significant wealth growth over time.
- Disciplined Investing: SIPs promote disciplined investing by encouraging regular contributions, helping you stay on track with your investment goals.
- Rupee Cost Averaging: By investing a fixed amount at regular intervals, you automatically buy more units when the market is down and fewer units when the market is high, which can help you average out your investment cost over time.
Conclusion
Tax Saving SIPs present a valuable opportunity for individuals seeking a combination of tax benefits and long-term wealth creation. By investing systematically in equity-oriented funds, you can harness the power of compounding and potentially achieve significant returns. However, it's crucial to carefully consider factors such as fund performance, fund manager expertise, and your own risk tolerance before making investment decisions. Remember that ELSS funds have a mandatory lock-in period of 3 years, so they are most suitable for investors with a long-term investment horizon. By conducting thorough research and aligning your investment strategy with your financial goals, you can effectively leverage Tax Saving SIPs to build a strong financial future while optimizing your tax savings.
FAQs
-
Are ELSS funds better than mutual funds?
ELSS funds differ from regular mutual funds due to their tax-saving benefits and mandatory lock-in period. Investors seeking a combination of investment growth and tax savings can consider ELSS funds.
-
Are ELSS funds tax-free after 3 years?
The taxation of ELSS funds depends on redemption. For instance, if ₹3 lakh is redeemed, ₹1.5 lakh is exempted under tax deduction criteria, leaving ₹1.5 lakh as taxable income.
-
What are the drawbacks of ELSS funds?
ELSS funds come with two main risks:
- Liquidity Risk: Funds cannot be withdrawn before the 3-year lock-in period.
- Market Risk: Since they primarily invest in equities, returns are not guaranteed.
-
How long do ELSS funds' tax benefits last?
The tax benefits of ELSS funds are applicable throughout their 3-year lock-in period.
-
Who should avoid investing in ELSS funds?
ELSS funds are ideal for long-term investors. If you have a
short-term investment horizon, these funds may not be suitable for you.
