Best ELSS Funds to invest in August 2024: Equity linked savings scheme or tax-saving mutual funds are very popular among investors as they provide dual benefit of tax savings and higher returns. As the name suggests, these funds primarily invest in equities, giving better returns than funds invested in other assets like debt and gold.
At the same time, these funds’ equity exposure make them highly volatile when compared to debt or gold-centric mutual funds. But again in the investment world the popular saying is high risk earns you high return and the same goes with ELSS mutual funds.
Tax benefits on ELSS mutual funds:
Under Section 80C of the Old Tax Regime, you can get an income tax deduction benefit of up to Rs 1.5 lakh. It means you can invest Rs 12,500 per month in ELSS mutual funds and seek full deduction benefits on your investments under Section 80C. On redemption of ELSS mutual funds, one has to pay a long-term capital gains tax at the rate of 12.5%. But there is a relief for small investor as the government exempts profit up to Rs 1.25 lakh on redemption of mutual funds.
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In July 2024 Union Budget, the Modi government has raised the long term capital gains tax (LTCG) to 12.5% from 10% and short term capital gains tax (STCG) from 15% to 20%. When assets are sold in less than 12 months of buying, STCG is applicable. When assets are held for more than 12 months and then sold, LTCG tax is charged by the government.
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ELSS mutual funds have a lock-in period of 3 years which restricts investors from redeeming units for 3 years from the date purchase, helping them make a good corpus. In this article we will take a look at five top performing ELSS funds in the last one year. We will also give their returns in the past 3 years and 5 years.
5 best ELSS mutual funds in 2024 (August)
Motilal Oswal ELSS Tax Saver Fund – Direct Plan
Motilal Oswal ELSS Tax Saver Fund – Direct Plan is required to invest at least 80% of its assets in equity stocks. Motilal Oswal ELSS Tax Saver Fund – Direct Plan has invested 98.72% in equity, 1.08% in debt.
Annualised returns 1 year – 61.56%
Annualised returns 3 years – 25.58%
Annualised returns 5 years – 26.58%
Expense ratio: 0.66
AUM – Rs 3,710 crore as of 30-June-2024
ITI ELSS Tax Saver Fund – Direct Plan
ITI ELSS Tax Saver Fund – Direct Plan is required to invest at least 80% of its assets in equity stocks. ITI ELSS Tax Saver Fund – Direct Plan has invested 98.29% in equity and 1.71% in debt.
Annualised returns 1 year – 58.81%
Annualised returns 3 years – 22.03%
Annualised returns 5 years – NA
Expense ratio: 0.48
AUM – Rs 363 crore as of 30-June-2024
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SBI Long Term Equity Fund – Direct Plan
SBI Long Term Equity Fund – Direct Plan is required to invest at least 80% of its assets in equity stocks. SBI Long Term Equity Fund – Direct Plan has invested 90.62% in equity and 9.38% in Cash & Cash Equivalents.
Annualised returns 1 year – 58.69%
Annualised returns 3 years – 29.25%
Annualised returns 5 years – 27.90%
Expense ratio: 0.93
AUM – Rs 25,738 crore as of 30-June-2024
Quant ELSS Tax Saver Fund – Direct Plan
Quant ELSS Tax Saver Fund – Direct Plan is required to invest at least 80% of its assets in equity stocks. Quant ELSS Tax Saver Fund – Direct Plan has invested 96.6% in equity and 3.4% in cash & cash equivalents.
Annualised returns 1 year – 57.09%
Annualised returns 3 years – 26.47%
Annualised returns 5 years – 26.06%
Expense ratio: 0.77
AUM – Rs 10,528 crore as of 30-June-2024
JM ELSS Tax Saver Fund – Direct Plan
JM ELSS Tax Saver Fund – Direct Plan is required to invest at least 80% of its assets in equity stocks. JM ELSS Tax Saver Fund – Direct Plan has invested 99.7% in equity and 0.3% in cash & cash equivalents.
Annualised returns 1 year – 54.18%
Annualised returns 3 years – 25.38%
Annualised returns 5 years – 26.29%
Expense ratio: 1.13
AUM – Rs 161 crore as of 30-June-2024
(Data Source: Value Research)
Investors should me mindful that past returns are not indicative of similar returns in the future. The data presented above are for the information purpose only.
Disclaimer: Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.
