Invest in ELSS For Tax Exemption

Invest in ELSS for tax exemption and better returns: Get up to 44.30% return in 1 year, money remains blocked for 3 years.

Only 69 days are left for the end of the financial year 2023-24. In such a situation, if you have not done tax savings planning yet, you can still invest for it. If you want good returns on investment along with saving tax, then Equity Linked Savings Scheme i.e. ELSS Mutual Fund can prove to be the right option. According to the official website of the Association of Mutual Funds in India (AMFI), ELSS category mutual funds have given returns of up to 44.30% in the last one year. Now let us first know about ELSS funds and then also know about the top-10 ELSS mutual funds giving highest returns in the last one year.

What is ELSS Mutual Fund?
ELSS i.e. Equity Linked Savings Scheme are such mutual funds in which investors' money is blocked for 3 years. In this category of mutual funds, tax exemption is available on investment up to Rs 1.50 lakh under Section 80C of the IT Act. However, being share market linked, it carries more risk than small savings like FD or NSC.

It has less lock-in period as compared to other tax saving schemes.
The lock-in period in ELSS mutual funds is much less as compared to other tax saving schemes including tax saving FD, Public Provident Fund. Where investors' money remains locked in tax saving FD for 5 years and in Public Provident Fund for 15 years.

Whereas in ELSS mutual funds, investors' money remains blocked for 3 years.
However, a major advantage of having money blocked is that it promotes disciplined investment over the long term. This can further help you in wealth creation. The expiry of the 3-year lock-in does not mean that you will have to exit the fund, you can extend it further.