Some Equity Linked Savings Schemes (ELSS) have recently delivered decent returns. Leading the pack is Quant, emerging as the top performer over a one-year period with a gain of 61%. Its three-year return stands strong at 35%.
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SBI Long Term follows closely behind with one-year return of around 59% and three-year return of 27%. In the third position is Bank of India, with rise of 54% in one year and 26% over three years.
HDFC Tax Saver secures its place with a one-year gain of 46% and a three-year return of 31%, while Parag Parikh ELSS demonstrates a growth of 35% in one year and 24% over three years.
| Fund Name | 1-year return | 3-year return |
|---|---|---|
| Quant | 61% | 35% |
| SBI Long Term | 59% | 27% |
| Bank of India | 54% | 26% |
| HDFC Tax Saver | 46% | 31% |
| Parag Parikh ELSS | 35% | 24% |
However, not all ELSS funds have delivered stellar performances.
Axis, Aditya Birla, and UTI find themselves at the bottom three, managing returns of only 9-14% over a span of three years.
It is crucial to note that ELSS funds come with a three-year lock-in period.
Despite this, it's common for investors to withdraw their funds after this period.
Financial experts advise against this practice, emphasising the importance of allowing well-managed funds to continue growing.
If an ELSS fund is performing well and the investment is flourishing, experts recommend staying invested for an extended period to maximise returns.
ELSS funds have long been favored by investors for their dual benefits of tax savings and the potential for wealth creation through equity investments.
Under Section 80C of the Income Tax Act, investors can claim tax exemptions from their annual taxable income by investing in ELSS funds.
However, the introduction of a new tax regime has prompted some investors to reassess their investment strategies.
The new tax regime, which doesn't allow investments under Section 80C, has led to a decline in ELSS investments compared to previous years.
Investors are now exploring alternative avenues that offer returns without being solely dependent on income tax deductions.
First Published: Mar 8, 2024 11:36 AM IST
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