The great returns they have generated in the past and their enormous potential have placed ELSS funds at the top of the list for the third consecutive year. The category has generated 18.69% annualised returns in the past three
years and 17.46% in the past five years.

The returns from individual funds vary because each fund has a different portfolio. For instance, Franklin India Taxshield has a decidedly large-cap orientation with 81% of its corpus allocated to largecap stocks. Investors can expect stable returns without any fireworks.

On the other hand, Reliance Taxsaver has more than 50% of its portfolio in mid- and small-cap stocks, which has helped it generate outsized returns from it. An investment of Rs 50,000 made in the direct plan of the fund in January 2014 would have almost doubled to Rs 97,700 in three years. Four of the five schemes in our list of top ELSS funds are large-cap oriented funds. Only Birla Sun Life Tax Relief 96 has a midcap orientation. The high returns are not the only plus point.

The best ELSS funds, use them to build wealth as well as save tax under Section 80C Returns are annualised. Data as on 4 Jan 2017. Source: Value Research ELSS funds also score high on costs, transparency, taxability and liquidity. There is no entry load and the investor is charged barely 2.5-2.75% a year (direct plans charge even less). Mutual funds are very well regulated by Sebi and everything—charges, portfolios and transactions—are in the public domain.

Returns are tax free because long-term capital gains from equity funds are exempt. As for liquidity, these funds have the shortest lock-in period of three years. However, this lock-in period should not be construed as the holding period for the fund.

Many investors make the mistake of exiting after three years. This is why the ELSS category continues to see low net inflows from investors. Some experts say ELSS funds are the best way to start investing in equities. The lock-in period enforces a discipline that eventually becomes a habit for the investor.

Smart tip It takes just 15-20 minutes to invest online. Many fund houses even do the KYC online.

We have mobilized asset under various mutual funds over six crores+. We are well equipped with internet to address your problems and render investment & income tax related services.

So, join mutual fund investment or tax saving schemes under our guidance at earliest to grow your investment along with peace of mind. The earliest you start investing, more compounding growth you will have in future.