India Tax Saver Funds

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As per the provisions mentioned in the Section 80C of the Income Tax Act, Indian tax payers can invest in Equity Linked Saving Schemes or ELSSs. A maximum of INR 1 lakh can be invested in these options and the amount can be deducted from the taxable income.

These funds have lock-in periods of 3 years each - this implies that the holder of these investment options cannot sell them in the stated period from the date when they purchased them.

Tax Saving Funds and Dividend Reinvestment

A common trend among investors in India is to put in the earnings from dividends into a fresh fund. Experts opine that this is a dangerous option as the money is locked for a three year period when it cannot be used.

ELSS Mutual Funds

The following table provides some information on the best ELSS mutual funds that are available nowadays:

Name of mutual fundDate of inception of mutual fundApproximate Expense ratio of mutual fundApproximate 5 year returns of mutual fund
Birla Sun Life Tax Relief - 96March 19961.9616.57%
Principal Personal Tax Saver March 19962.1916.42%
Canara Robeco Can Equity Tax SaverMarch 19932.3822.31%
Franklin India Tax ShieldApril 19992.117.34%
HDFC Tax SaverMarch 19961.8617.80%
Sundaram Tax SaverNovember 19991.9617.73%
ICICI Prudential Tax PlanAugust 19991.9815.48%
Sahara Tax Gain March 19972.522.31%
SBI Magnum Tax Gain Scheme - 93March 19931.7816.32%
Reliance Tax SaverAugust 20051.8815.14%

Following are some other well known tax saving funds of India:
  • JM Equity - Growth
  • Franklin India Taxshield - Growth
  • Religare AGILE Tax Fund - Growth
  • Principal Personal Taxsaver
  • ING OptiMix RetireInvest Fund - Series I - Growth
  • Franklin India Index Tax Fund
  • IDFC Tax Saver (ELSS) Fund - Growth
  • PRINCIPAL Tax Savings Fund
  • ICICI Prudential RIGHT Fund - Growth
  • Tata Tax Saving Fund
  • JM Equity Tax Saver Fund - Series I - Growth
  • ING Tax Saving Fund - Growth
  • UTI Long Term Advantage Fund - Growth
  • UTI Equity Tax Savings Plan - Growth
  • Reliance Equity Linked Saving Fund - Series I - Growth
  • Baroda Pioneer Equity Linked Saving Scheme 96
  • Tata Tax Advantage Fund -1
  • Escorts Tax Plan - Growth
  • Tata Infrastructure Tax Saving Fund - Growth
  • LIC Tax Plan - Growth
  • Tata Fixed Maturity Plan - Series 25 - Plan B - RIP - Growth
  • HSBC MIP - Savings Plan - Growth
  • Reliance Fixed Horizon Fund 13 - Series 2 - Growth
  • HDFC Childrens Gift Fund - Saving Plan
  • UTI Long Term Advantage Fund - Series II - Growth
  • Birla Sun Life Savings Fund - Institutional - Growth
  • SBI Tax Advantage Fund - Series 1 - Growth
  • Kotak Taxsaver - Growth
  • SBI Magnum Tax Gain Scheme 93 - Growth
  • Religare Tax Plan - Growth
  • Sundaram BNP Paribas Taxsaver - (Open Ended Fund) - Growth
  • HSBC Tax Saver Equity Fund - Growth
  • HDFC Taxsaver - Growth
  • JM Tax Gain Fund - Growth
  • Sahara Taxgain - Growth
  • Fortis Tax Advantage Plan - Growth
  • ICICI Prudential Taxplan - Growth
  • IDFC Tax Advantage (ELSS) Fund - Growth
  • Taurus Taxshield - Growth
  • Bharti AXA Tax Advantage Fund - Regular - Growth
  • DSPBR Tax Saver
  • Fidelity Tax Advantage

Canara Robeco Equity Tax Saver

The Canara Robeco Equity Tax Saver fund has been benchmarked against BSE 100 index. Since its launch, the mutual fund has had returns of approximately 14.5 percent and its risk levels are lower than average. This fund is known for providing reasonable returns.

The fund manager of Canara Robeco Equity Tax Saver offers a varied portfolio and does not have any sector bias or market cap as such. The fund primarily deals with companies that have good fundamentals and substantial growth potential.

Taurus Tax Shield

Taurus Tax Shield, which was launched at the same time as the Canara Robeco Equity Tax Saver, is benchmarked against the BSE 200 index and after its introduction has been consistently providing returns of around 11 percent.

The fund presently manages an aggregate amount of INR 65 crores and the manager normally invests in various sectors and market capitalization categories. The stocks are normally chosen based on their ability to create value and overall prospects in the long term.

Fidelity Tax Advantage

Fidelity Tax Advantage manages funds worth almost INR 1120 crores and it has been benchmarked against the BSE 200 index. After it was introduced it has been providing approximate returns of 13 percent. The fund manager normally chooses the stocks on the basis of factors like core strength and there are no restrictions regarding sector or market capitalization.

Franklin India Taxshield

The Franklin India Taxshield manages funds worth almost INR 790 crores and has been benchmarked against the S&P CNX 500. Since its introduction it has provided average returns of 26 percent, which can be regarded as an exceptional amount.

The fund has also been able to restrict the shortages whenever the market has not performed as per expectation. In this regards its performance has been far better than its competitors and this has been something that has helped it stand out in the market. This fund does not have any restriction related to market capitalization.

Sahara Tax Gain

The Sahara Tax Gain mutual fund manages funds worth almost INR 10 crores. Since its introduction it has provided returns of approximately 26 percent and has been benchmarked against the BSE 200 index.

Sahara Tax Gain invests approximately 20 percent each in small cap and mid cap stocks and remainder of the amount is put into the large cap stocks. 45 percents of its holdings comprise the leading 3 sectors where the investments are made.

Religare Tax Gain

Religare Tax Gain manages approximately INR 100 crores and after its introduction has provided returns of approximately 10.5 percent. It invests in different types of stocks with regards to market capitalization and it has been benchmarked against BSE 100. Its strategy is a multi-cap one and it invests in approximately 20 to 50 shares.

HDFC Taxsaver and HDFC LT Advantage

The HDFC LT Advantage manages funds that are worth almost INR 900 crores and is traded in the Sensex. The HDFC Taxsaver fund is benchmarked against S&P CNX 500 and manages funds worth around INR 2880 crores.

After its introduction HDFC LT Advantage has provided returns worth almost 25 percent while for HDFC Taxsaver the returns have amounted to 30%. Their credibility is heightened by the fact that they are being marketed by HDFC Fund House.

ICICI Prudential Tax Plan

The ICICI Prudential Tax Plan is benchmarked against the S&P CNX 500 and manages funds worth approximately INR 1200 crores. After it was introduced, this mutual fund has been providing returns of around 23 percent.

It operates primarily in the small cap and mid cap stocks and has performed well in both these markets. It has 60 stocks in the portfolio and no share has been allotted in excess of 5 percent. No sector has more than 20% shares in the fund.

Last Updated on 3/13/2012

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