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Choose the best investment to save taxes under Section 80C

Equity Linked Saving Scheme (ELSS) or tax saving/planning mutual fund schemes are the best option available under Section 80C.

ET Online|
Updated: Mar 27, 2019, 02.49 PM IST
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You hardly have three days to make your investment to claim tax deductions under Section 80C of the Income Tax Act. In fact, make that three days. Postponing your investments to the last day may result in some unforeseen complications. The current financial year comes to an end on March 31.

Now, if you have postponed your tax—saving investments till the last week of the financial year, you could be either super confident or totally confused. If you are super confident, you really don’t need our help. We will leave you to your own devices. However, if you are a bit confused, we would like to offer a few pointers to you that might help you to make up your mind.

To begin with, we will tell you about the best tax-saving option available to you to save taxes under Section 80C. No surprises here: Equity Linked Saving Scheme (ELSS) or tax saving/planning mutual fund schemes are the best option available under Section 80C. No, we are not saying this because we are devoted to mutual funds.

Simply put, ELSS scores over other options available under Section 80C on many counts. One, it invests in equity. That means it has the potential to offer superior returns than the other options that are essentially government-backed investments offering assured single—digit returns. Two, it has the shortest lock-in period of three years. Other popular investment options such as Public Provident Fund and Kisan Vikas Patra have longer lock-in periods.

If you have the risk appetite and ready to take plunge, here are our recommended Equity Linked Saving Scheme or tax-saving/planning mutual fund schemes: Best tax saving mutual funds to invest in 2019
Motilal Oswal Long Term Equity Fund
Aditya Birla Sun Life Tax Relief 96
L&T Tax Advantage
Invesco India Tax Plan
Axis Long Term Equity Fund
Mirae Asset Tax Saver
DSP Tax Saver
Principal Tax Savings Fund


Sure, these schemes have an investment horizon of only three years. However, you should invest in them with an investment horizon of at least five to seven years. Better still, link your ELSS investment to a long-term financial goal. This strategy would help you to stay focused on your investments.

Now, how do you invest in ELSS funds without losing much time. One, rush to a reliable mutual fund advisor in your locality and you can finish the entire process today evening. If you want to do it online, you can visit the websites of the mutual fund house and invest in direct plans of these schemes.

However, if you are not KYC compliant, there could be some trouble. Since most mutual fund houses do not do online e-KYC verification after the ban on Aadhaar-based verification by the Supreme Court, you may have to use mobile applications like Paytm money, ET Money, etc to complete your online verification . Only Quantum Mutual Fund continues to do online KYC. Without online KYC you can invest only up to Rs 50,000.

For more information, read: Aadhaar e-KYC holders struggle with last minute investments in ELSS mutual funds

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