ELSS Mutual Fund: After the end of the year, many people are now worried about tax saving, after which they are looking for such investment options, where tax benefits are available. However, while choosing such an option, it is necessary to take care of the returns available in it. One such option is the Equity Linked Savings Scheme (ELSS) of mutual funds. In this category of mutual funds, under section 80C of the IT Act, investments up to Rs 1.50 lakh is also getting high returns along with tax savings. The lock-in period is also less than other tax saving options (Small Savings), while the returns in 5 years are 3 to 4 times more as compared to FD or NSC.

Start SIP whenever you want
According to AK Nigam, director of BNP Fincap, if you can take a little risk in the market, then ELSS can prove to be the best for you in tax saving options. These schemes are equity-linked, hence subject to risk. He says that the biggest advantage of this is that the lock-in period is 3 years in comparison to 5 years of tax saver FD.

There is a long-term capital gain in this, but income up to 1 lakh is tax-free. While the fixed-income options are exempted under 80C, the entire income is taxable. At the same time, it is not necessary to withdraw money after lock-in. If there is profit, then hold on as long as you want. Therefore, instead of waiting for the financial year in such a scheme, you can start SIP anytime.

Funds with best returns in 3 years
Quant tax plan: 40%
SBI Tax Advantage Fund - Series III: 31%
SBI Long Term Advantage Fund Series IV: 31%
Sundaram Long-Term Microcap Tax Advantage: 28%
Bank of India Tax Advantage Fund: 24%
IDFC Tax Advantage (ELSS) Fund: 24%

Funds with best returns in 5 years
Quant tax plan: 23%
SBI Tax Advantage Fund - Series III: 22%
Canara Robeco Equity Tax Saver Fund: 16%
Mirae Asset Tax Saver Fund: 14%
Kotak Tax Saver: 13%

Funds with the best returns in 10 years
Quant tax plan: 20%
Bank of India Tax Advantage Fund: 17%
IDFC Tax Advantage (ELSS) Fund: 16%
DSP Tax Saver Fund: 16%
Axis Long-Term Equity Fund: 16%

Major advantages of ELSS
Under the Income Tax Act section 80C in ELSS, tax exemption is available on investments up to Rs 1.50 lakh. ELSS has a lock-in period of 3 years, while tax saver FD has a lock-in period of 5 years. The good thing is that even after lock in, it can be held for a long period. Here your money is invested in equity, due to which there are chances of high returns. It can also be invested through SIP. Long-term capital gains on ELSS are tax-free up to Rs 1 lakh.