Best Tax Saving Mutual Fund / ELSS Fund to invest in 2011-12

ELSS (Equity Linked Saving Scheme) also popularly known as Tax Saving Mutual Funds are one of the best investments you can do to save tax and create wealth in the long run. But unfortunately according to the proposed direct tax code ELSS would be a thing of past and it would no more be eligible as tax saving instrument under section 80C of Income tax.

Nevertheless Financial year 2011-12 still gives you an opportunity to invest in them and save tax. If you have not yet invested your 1 Lakh under section 80C to save tax, you might look at ELSS/ Tax Saving Mutual Funds. In an earlier post I had mentioned how you can select the best Tax Saving Mutual Fund / ELSS Fund to invest!

Following similar footsteps below is the list of “Best Tax Saving Mutual Fund / ELSS Fund to invest in 2011-12

  1. Canara Robeco Equity Tax Saver – The Best ELSS Fund
  2. Franklin India Taxshield – Consistent Performer – Suited for people who are looking for good return at a very low risk.
  3. Fidelity Tax Advantage – Consistent Performer – Suited for people who are looking for good return at a very low risk.
  4. Religare Tax Plan – Higher risk than above three
  5. Sahara Tax Gain – Has mid cap portfolio so high risk but high return. Invest in this if you are looking to diversify in mid caps.
  6. Taurus Tax Shield – Most volatile fund among the group. So invest only if you can take the risk.

The table below gives the returns of these Tax Saving Funds for 1 Year, 3 Years, 5 Years and 10 Years period.

ELSS/ Tax Saving Mutual Fund 1 Year 3 Years 5 Years 10 Years
Canara Robeco Equity Tax Saver 5.9% 39.6% 16.5% 21.6%
Franklin India Taxshield 0.4% 33.8% 13.0%
Fidelity Tax Advantage 6.4% 34.1% 13.1% 23.7%
Religare Tax Plan 7.8% 34.0% 10.2%
Sahara Tax Gain 6.1% 34.5% 15.0% 22.6%
Taurus Tax Shield -1.6% 30.1% 17.2% 21.4%

*The returns are annualized for more than 1 Year.

I thought I would give you a list of the Tax Saving Mutual Funds or ELSS you should keep away with.

  1. Escorts Tax Plan
  2. JM Tax Gain
  3. DWS Tax Saving
  4. JP Morgan India Tax Advantage
  5. LIC Nomura MF Tax Plan

All the above 5 ELSS have been consistently performing at the bottom. You can check their returns in the table below:

ELSS/ Tax Saving Mutual Fund 1 Year 3 Years 5 Years 10 Years
 Escorts Tax Plan -6.6% 17.1% 0.4% 15.9%
 JM Tax Gain -3.2% 20.7%
 DWS Tax Saving -4.5% 20.9% 5.2%
 JP Morgan India Tax Advantage -0.1% 21.3%
 LIC Nomura MF Tax Plan -3.1% 21.6% 3.3% 13.9%

*The returns are annualized for more than 1 Year.

As you can see in the table above even the worst ELSS fund has given an annualized return of 17% for past 3 years making it a perfect investment instrument for tax saving and wealth creation.

4 thoughts on “Best Tax Saving Mutual Fund / ELSS Fund to invest in 2011-12

  1. that as per new CBDT rules,a salaried lmpeoyee whose total income is less than rs.5lakh need not submit his IT return.1. But then how will the tax payable be determined?2. If it is determined on the basis of TDS certificates, won’t the tax be lesser as the TDS rates are less ?

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