Best tax-saving mutual funds to invest in India 2022
The Equity-linked savings scheme (ELSS) is a type of mutual fund that provides an opportunity to save on taxes as well as income growth. These mutual equities are open-ended investment options that focus on stock market investments. There are plenty of investment options available in the market. ELSS has one advantage and that is it gives you tax benefits.
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Investing long-term gets you two benefits that are return on investment and tax benefits. An individual can get tax deductions up to INR 1.5 lakh. It provides inflation-indexed returns over time, allowing you to save for your future goals. ELSS funds are different from other equity funds by mainly two characteristics:
- There is a mandatory lock-in period of three years.
- Section 80C of the Indian tax laws allows for a tax deduction of up to INR 1.5 lakh.
Best ELSS funds in 2022
- The Quant Tax Plan Direct-Growth
- The BOI AXA Tax Advantage Direct-Growth
- The Mirae Asset Tax Saver Fund Direct-Growth
- The IDFC Tax Advantage Direct-Plan-Growth
- The Canara Robeco Equity Tax Saver Direct-Growth
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Factors to consider before investing in ELSS funds
Return on investment
Before investing in ELSS, proper evaluation and efficiency of the company by other companies should be done. A fund should show uniformity in its accomplishments and performance over the years.
The fund House’s background
It is advised to pick a fund house that has already done great and performed better for a long period and its future perspective is good.
Manager of the fund
The manager of the fund is a major factor in deciding which fund is suitable for investment. The manager should be knowledgeable and experienced.
Expense-to-income Ratio
The expense ratio determines the amount of your money spent on fund management and it is better to choose those funds with a relatively low expense ratio.
Performance of the best Mutual funds
The Quant Tax Plan Direct-Growth
Quant Tax Plan Direct-Growth is an equity Mutual fund launched by Quant Mutual Fund. This scheme aims to generate capital preference by investing mainly in equity shares with growth potential. The next objective of this mutual fund is to give dividends and other income.
The BOI AXA Tax Advantage Direct–Growth
BOI AXA Tax Advantage Direct, -Growth is another equity mutual fund. This scheme strives to build a diversified portfolio of stocks of companies having sustainable business models.
The Mirae Asset Tax Saver Fund Direct–Growth
Like other equity mutual funds, this scheme also seeks to generate long-term capital gains by mainly investing in equity funds.
The Canara Robeco Equity Tax Saver Direct–Growth
Canara Robeco Equity Tax Saver Direct-Growth aims to achieve long-term capital appreciation by mainly investing in equities.
The IDFC Tax Advantage Direct–plan–Growth
This scheme strives to build a diversified portfolio comprising stocks of various companies with strong fundamentals.
Conclusion
These above-mentioned ELSS funds are the best-performing mutual funds in 2022. One can choose a mutual fund to invest in and get tax benefits according to their need. These equity mutual funds are a good option to make investments as well as tax-saving.
FAQ’S
What are the types of mutual funds?
There are four types of mutual funds,
1. money market funds,
2. bond funds,
3. stock funds, and
4. target date funds
what are the 3 disadvantages of ELSS funds?
Disadvantages of ELSS funds are,
1. Not an option for risk-averse investors.
2. Limited benefits.
3. Management cost.