Blog Details

Why to Invest in Tax Saving Mutual Funds in 2018?

Image for Tax Saving Via Mutual Funds

Saving a bit slowly and steadily turns out big. Starting a new year with tax saving investments could bring plentiful of joyfulness in one’s life. To maintain this joyfulness in rough and tough times, it is vital for everyone to have financial plans.

Today folks are not aware of some fundamentals of tax planning, even being techno-savvy. So you might be thinking what is tax savings investment plan? This is investment in tax saving mutual funds, which is related to an equity saving scheme that is ELSS.

So I am going to make you conscious about your investments in which you can save your bit through ELSS under section 80 C.


This section allows an individual to have provision in income tax act, 1961. It lets people to have a decline in their taxable income approximately up to Rs 1.5 lakh. This shows that those tax-payers in the maximum bracket of 30% can reserve up to Rs 46,350 by only investing Rs 1.5 lakh in ELSS under section 80c.


Image for ELSS Mutal Funds for Tax Saving

ELSS is basically an investment in the form of a scheme which gives tax-payers an alternative to save tax. In this, tax saving mutual funds are invested in stock markets and investors have full freedom to select any of growth and dividend option.

Read more about: What are Tax Saving Mutual Funds


Dividend option should be adopted only if you want a periodic income, otherwise there is no point of choosing dividend. It is just the way of withdrawing your returns on your investments as soon as possible.

If you want to maximize your funds to create wealth, then you can go for growth fund. A lump-sum is paid in growth option when lock-in period is completed which is generally of 3 years in ELSS.

The growth option could prove to be the bad option for those investors who want money in instalments for their investments.


Kick-off your investment after going through these steps right now.

  • Identify your tax slab and taxable income.

  • Carefully choose ELSS fund.

  • Open your bank account

  • Select the way through you want to invest; it can be mutual fund distributor or online distributor. You also have an option to invest directly.

Those who are new to the market, ELSS is the best platform to invest in. It not only ensures return to your investment but also acts as a great apparatus to save tax. Here are some numerous features of ELSS.

  • The least amount of investing in ELSS is Rs 500. So the individuals who are not able to earn handsome money can also go for it. Check out top performing SIP ELSS funds here

  • ELSS provisions shortest period of lock-in vis-a-vis others such as Public Provident fund(PPF) and National saving certificate(NSC) which provides very long deadlock that is 6 years. Thus it is the best tax saving investment scheme for those individuals who are looking for short term investments.

  • The return you will get on investment is directly proportional to stock market performance, so an individual can expect high return if performance of market goes well. Investor’s good profile could also make an impact as they can have high returns if the economy rises.

  • Returns form ELSS investments are completely exempted of tax.

  • Gives an opportunity to an investor to have high earning.

Read Related Blog: Why ELSS are prominent option for Tax Saving?

Best ELSS in which you can invest to save your tax


It is an equity linked saving scheme which targets to generate capital growth in the long term. The risk involved in this is moderate. It offers a return of approx 20%.

The return in IDFC Tax Advantage Fund is 11.37% for the span of three years and 18.59% for the duration of five years.

It generally creates diversified portfolios which include big firms and organizations such as KFC International Ltd, Maruti Suzuki, HDFC Bank Ltd and many more.


It focuses on the objective to save tax when you want to make your money through equity investments. The risk involved in this is moderate. It is an open ended fund which offers a return of approxiamately 23% since it is launched.

The return in Aditya Birla -Sun Life Relief 96 is 11.72% for the period of three years and offers 20.92% for the time of five years.

The Aditya Birla - Sun Life Relief 96 includes portfolio such as Reliance Industries Ltd, Bayer Crop Science Ltd, Honeywell Automation India Ltd and many more major organizations.


This was launched on 21 September, 2005 which again holds moderate risk. The fund has an objective to have a long term capital growth.

The Reliance Tax Saver Fund offers a return of 7.18 % for the period of three year and gives 20.19% for five year duration.

The Reliance Tax Saver Fund comprises main portfolios like Kotak Mahindra Bank Ltd, Maruti Suzuki India Ltd, HDFC Bank Ltd and many more portfolios which contain equity and equity related instruments.

In this rampant world, everyone wants to fulfill their basic needs and dreams. It is every individual’s wish to have a house, car and explore the world. Tax saving planning is essential to have this comfort zone. You end up your year giving some part of your income to the government. The above information depicts the ways through which you can save your tax and can live smoother and happier life.

Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

Do you have an Investment or Mutual Fund Query Post Your Query