One, you don't have to start all over again at the fag end of every financial year. Keep the number Rs 1.5 lakh in your head (at least until a budget changes it) for your reference every year. This is the maximum amount you can save by investing in a few selected tax-saving options in a financial year. However, that doesn't mean that you need to invest the entire amount to exhaust the entire amount.
The section 80C includes a host of options that qualify for tax deductions. That includes your Employees Provident Fund or EPF and life insurance premium. If you are working, you would mostly have an EPF account. Your contributions to it would qualify for deductions under Section 80C. So, look at your salary slip and multiply the amount by 12 to find out how much you have contributed in the financial year.
You should also remember that there are many other options like children's tuition fees, national saving certificate, repayment of home loan (principal), and so on. If you have incurred any of these expenses or made investments, you can claim them as deductions under Section 80C.
Once you are through the exercise, you know how much you need to invest in an ELSS or tax-saving mutual fund to exhaust the Section 80C limit of Rs 1.5 lakh. For example, if you contribute Rs 5,000 per month to your EPF account (that is, Rs 60,000 in a year) and pay a monthly life insurance premium of Rs 3,000 (Rs 36,000 per year), you need to invest only Rs (Rs 1.5 lakh minus Rs 96,000) Rs 54,000 to exhaust the Section 80C limit.
Okay, the next is to identify the so-called best tax-saving scheme to invest. Before calling up your best friend, why don't you find out how the scheme you have listed last financial year or the year before that is faring? No, you don't have to do a lot of data crunching to find this out. Simply find out whether the scheme is ahead of its category and benchmark index. If yes, you can consider investing in the same scheme.
Anyway, here is a list of our recommended ELSS mutual funds you can consider investing in this financial year. For more, read: Best ELSS or tax saving mutual funds to invest in 2020.
A few pointers: sure, these schemes come with a lock-in period of three years. But always keep long-term horizon in mind while investing in them. Also, if possible, link your ELSS investments to a long-term goal. This will help you to hold on to them during bad times in the market, and stop you from rushing to sell them as soon as the lock-in period is over.