Query Answer

Have I selected the best ELSS mutual funds for saving taxes

I am Divya from Chennai . My age is 26. Initially for tax saving purpose, I have started investing in MF through SIP from last 6 month onwards in following funds - 1) ABSL Tax Relief 96 - Growth, 2) Mirae Asset Tax Saver - Growth, 3) Franklin India High Growth Companies - Growth. I am investing monthly 2000 on above mentioned fund each. Are these funds good for long term investment? Please suggest?

Oct 27, 2017 by J. Divya, Chennai  |   Mutual Fund

Thanks for writing to swarajwealth Investments.

Happy to see that the funds you have invested in all are good performing. However, only the first two funds - ABSL Tax Relief 96 Growth and Mirae Asset Tax Saver Growth - are from ELSS category and qualifies or tax saving. The 3rd fund, Franklin India High Growth Companies Fund is a diversified equity fund and the investments made in this fund so far will not qualify for tax deduction under Section 80C of The Income Tax Act 1961.

Therefore, if saving tax is the prime requirement as you have mentioned, it is suggested that you stop SIP in Franklin India High Growth Companies Fund and start a new SIP in either AXIS Long Term Equity Fund or L&T Tax Advantage Fund. Both are among the top performing funds as per our research. You may check the same from here - Top performing ELSS Funds

With Rs 6,000 monthly SIPs you can expect to accumulate a corpus of over 14 Lakhs after 10 years against your investment of Rs 7.60 Lakhs assuming annual returns at 12.5%. However, the corpus may even be higher if you get higher than the above assumed returns. For example, the corpus could be over Rs 15 Lakhs and around 17 Lakhs if the returns are 13.5% and 15% respectively.

We have used this calculator to know the accumulated amount based on assumed rates of return https://swarajwealth.com/tools-and-calculators...

At any point in time, to know top performing funds, do visit our mutual fund research section - https://swarajwealth.com/mutual-funds...

Please let us know how else can we help you at swarajwealth@gmail.com

Thanks again.

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