Best Tax saving mutual fund to invest in 2023

Introduction: 

Tax saving mutual funds are those which invest at least 80% of their assets in equities. The tax saving mutual funds are essentially the equity-linked saving schemes (ELSS) which offer tax benefits to the investors under Section 80C of the Income Tax Act, 1961. The lock-in period actually inculcates a good habit among investors to thrive for long-term investing while putting their money in an equity related instrument.

Risk & Return aspects:  These tax saving mutual funds also offer the benefit of maximizing portfolio returns over a long term to an investor. However, investors should also be wary of the risk associated with equity investing as compared to the other tax saving fixed-income instruments like Public Provident Fund (PPF) & others.

Advantages of ELSS Funds: Kya ELSS Mutual Fund Sahi Hai?

• Lock-in period of 3 years. Shortest among all tax saving options
• Their diversified portfolio reduces risk while ensuring you don't miss out on any opportunity
• Invest and get better return potential than traditional options like PPF

Key features:

• Lock-in period of 3 years, the shortest of all tax saving options under section 80C Inflation-beating earning potential and excellent returns that make ELSS stand out among all tax saving investments
• In the long run, it offers the twin benefits of tax savings and wealth creation
• Suitable for an aggressive class of investors who have an appetite for higher risk, tolerance for continued market volatility and remain invested with a long investment horizon of at least 5 years
• It is also well suited for novice investors to learn the nuances of equity investing while saving on taxes
• Profits from equity funds are taxed @ 15% for holding period less than 1 year and @ 10% for more than one year if profits are more than CZK 1,000,000

Top 10 ELSS Mutual Fund to invest in 2023 are:

• Quant Tax Plan Direct-Growth: The Quant Tax Plan Fund has given approx 35% annualized returns in last 3 years and 28% in the last 5 years. The Quant Tax Plan Fund belongs to the Equity category of Quant Mutual Funds.

• Bandhan ELSS Tax Saver Fund Direct Plan-Growth: The Bandhan Tax Advantage (ELSS) Fund has given approx 28% annualized returns in the last 3 years and 19% in the last 5 years. The Bandhan (ELSS) Fund belongs to the Equity category of IDFC Mutual Funds.

• SBI Long Term Equity Fund Direct Plan-Growth:  The SBI Long Term Equity Fund has given approx. 26% annualized returns in last 3 years and 18% in the last 5 years. The SBI Long Term Equity Fund belongs to the Equity category of SBI Mutual Funds.

• Parag Parikh Tax Saver Fund Direct - Growth: The Parag Parikh Tax Saver Fund belongs to the Equity category of PPFAS Mutual Funds.

• Bank Of India Tax Advantage Direct-Growth: The Bank of India Tax Advantage Fund has given approx 25% annualized returns in last 3 years and 23% in the last 5 years. The Bank of India Tax Advantage Fund belongs to the Equity category of BOI AXA Mutual Funds.

• Motilal Oswal ELSS Tax Saver Fund Direct-Growth: The Motilal Oswal ELSS Tax Saver Fund has given approx 25% annualized returns in last three years and 18% in the last 5 years. The Motilal Oswal ELSS Tax Saver Fund belongs to the Equity category of Motilal Oswal Mutual Funds.

• HDFC ELSS Tax Saver Direct Plan-Growth: The HDFC ELSS Tax Saver Direct Plan has given approx 22% annualized returns in last 3 years and 18% in the last 5 years. The HDFC ELSS Tax Saver Plan belongs to the Equity category of HDFC Mutual Funds.

• DSP ELSS Tax Saver Direct Plan-Growth: The DSP Tax Saver Fund has given approx 23% annualized returns in last 3 years and 19% in the last 5 years. The DSP Tax Saver Fund belongs to the Equity category of DSP Mutual Funds.

• Mirae Asset Tax Saver Fund Direct Growth: The Mirae Asset Tax Saver Fund has given approx 21% annualized returns in last 3 years and 19% in the last 5 years. The Mirae Asset Tax Saver Fund belongs to the Equity category of Mirae Asset Mutual Funds.

• Mahindra Manulife ELSS Tax Saver Fund Direct Growth:The Mahindra Manulife ELSS Fund has given approx 24% annualized returns in last 3 years and 17% in the last 5 years. The Mahindra Manulife ELSS Fund belongs to the Equity category of Mahindra Mutual Funds.

Disclaimer
Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. 

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