List of some of the best Tax Saving mutual funds. The list of funds selected are based on criteria of consistent dividend for a long period of time.
When it comes to Tax Saving and ELSS Funds I prefer to invest in funds where I get maximum dividend and that way I do not need to invest my full amount and also get the Tax benefit of full amount invested. Read how if you still have not read – Full tax saving without investing one lac. Now many people ask me about how to know the dividend history of funds and so for them I have Dividend History of Mutual Funds.
So now using the methods discussed in the above two articles I would list some of the best Tax Saving funds. The list of funds I have selected are based on criteria of consistent dividend for a longer period of time.
Birla Sun Life Tax Relief 96
Best Dividend ever by any Tax saver fund I know off.
| Record Date | Rate of Dividend |
|---|---|
| Jun 27, 2008 | 50 % |
| Mar 25, 2008 | 200 % |
| Mar 16, 2007 | 500 % |
| Jan 19, 2007 | 260 % |
| Dec 8, 2006 | 250 % |
Principal Personal TaxSaver
One more best dividend Tax saver fund I know off. Principal Personal TaxSaver has given probably the best dividend in the most difficult time.
| Record Date | Rate of Dividend |
|---|---|
| Mar 25, 2008 | 400 % |
| Feb 26, 2008 | 200 % |
| Dec 31, 2007 | 110 % |
| Oct 30, 2007 | 110 % |
| Mar 13, 2006 | 100 % |
SBI Magnum Tax gain
Yet another fund by SBI Mutual Fund house which has very good track record when it comes to return as well as dividend.
| Record Date | Rate of Dividend |
|---|---|
| May 29, 2009 | 28 % |
| Feb 15, 2008 | 110 % |
| Mar 2, 2007 | 110 % |
| Mar 10, 2006 | 150 % |
| Jun 10, 2005 | 102 % |
HDFC Tax Saver
Not into one of the best dividend rate like above funds but very consistent when it comes to dividend and also return of this fund is also worth investing.
| Record Date | Rate of Dividend |
|---|---|
| Mar 6, 2009 | 50 % |
| Mar 7, 2008 | 80 % |
| Mar 8, 2007 | 75 % |
| Mar 17, 2006 | 75 % |
| Feb 17, 2005 | 50 % |
Canara Robeco Equity Tax Saver
Not as good as above ones, but best when it comes to return of the fund.
| Record Date | Rate of Dividend |
|---|---|
| Mar 28, 2008 | 30 % |
| Mar 15, 2007 | 60 % |
| Mar 16, 2006 | 40 % |
| Mar 18, 2005 | 25 % |
| Mar 26, 2004 | 15 % |
Apart from the above old funds I also expect some good returns for some of the new tax saving funds which till date have not recorded good dividend but that is may be because of the current market situation for last one year or so and so they deserve mentioning.
Fidelity Tax Advantage
| Record Date | Rate of Dividend |
|---|---|
| Mar 13, 2008 | 15 % |
DSP Blackrock Tax Saver
| Record Date | Rate of Dividend |
|---|---|
| Feb 29, 2008 | 36 % |
Kotak Tax Saver
| Record Date | Rate of Dividend |
|---|---|
| Feb 8, 2008 | 35 % |
| Feb 20, 2007 | 30 % |
Here is something more…
Now… if you are willing to invest in ELSS MF’s …
then,
why not invest in equity directly ?
Are you ready to lose the 30K in tax ???
why would you want to save 30K tax by investing 1 Lac rupees ???
Assume this,
From April 2010 you have 1 lac in hand which you would want to invest to save 30K tax for the year 2010-2011.
But then instead, you decide to invest in equity directly such that you make atleast 10-20K per month.
From my observation even uneducated men and WOMEN are able to make that much by investing in equity; trading for the month.
And, if you are slightly educated; its a shame if you cant make that much; at least I look at it that way.
Note:
Since this would be short term trading; you will have pay tax.
So you want to trade in such a manner such that even after paying tax you land up making a profit of atleast 5K rupees per month.
To make that amount is absolutely easy; if you use your brains.
So now you would have 60K at the end of the year + your 1 lac which you used to make this money.
And the 30K that you would have lost in tax would actually be covered; giving you a total profit of 30K. (60K – 30K tax)
Now that’s investment.
Eventually You don’t land up in 3 year lock-in-period in ELSS.
You would have helped companies grow; as well as made some profit; plus covered your tax.
Its all a mental game.
Lear to play it; and always be ready to lose.
All the best.
I do not agree on the fact that you can earn month after month 10% month on month.
If that is the case you actually can more than double each year but that is not always possible.
oops , i did a refresh on the comment page, pls ignore the above comment.
Hi Shabbir,
Indeed a good article.
I’m a little confused over investing in BNB Paribas Tax saver and Canara robeco.. which one would be wise investment for high dividend and currently i would invest lump-sum ~40k.
Regarding
Birla Sun Life Tax Relief 96 OR similar 10+ year old funds
The following is my personal view and based on my personal estimates;
Considering market trend and mindset change that the market crash has brought into; it is very likely to bring about a change in strategy for future development.
Since BSL 96′ is an aggressive fund (as opposed to balanced funds)
and it being rated as the best for its 13 year performance; it may not be the best for the next 3 years.
For me – it looks saturated; it should perform as good as others; nothing special.
From its current state and considering market trading at 16K+
This fund should grow at around 8%-10% rate or even less; for the next 3 years.
Still ELSS is the best way to save tax; and I would recommend that you invest wisely ; making a good study of the funds already existing and recently(3-5 years old) launched funds; if you are looking to make profits from equity.
Since you need to pay tax on your dividends or maturity amount; as an investor you would want the profit to be good enough.
First of all I would like to thank Shabbir for the information he is giving to all of us; and I totally agree with Shabbir about investing in ELSS – Section 80C Category investment.
Its all about getting rid of the mental block that we all have.
1. By investing 1 Lac; one saves approx 30K-33K for the current year on TAX
2. Although a risk; The Same 1 Lac invested; has a good chance of giving atleast some return on a 3 year lock-in-period. 3 years is good enough period to give some profits.
market is currently trading at 16K+ ; even if it becomes 20K after 3 years; you still made some profit.
Not to forget; your 1 lac is already saving 30K to 33K of tax for that year.
3. Note: One will have to pay tax on the dividends though or lump sum amount at the point of maturity / withdrawal
I totally agree with Shabbir; i.e. if your investors themselves are going to invest in funds and other items; then why not do it yourselves. Dont fear.
For those fearing a bit; you could look for schemes under
Section 80C + 10(10D) — ULIP’s are good example
No tax on Principal amount + No tax on interests + No tax on total amount on maturity
But then; I would suggest to re-calculate or make estimates of the profit for the amount invested for a minimum term of 10years having a lock-in-period of minimum 3 to 5 years.
ELSS – the best way to save TAX.
May be Shabbir can add more; I am not an expert.
Thanks Shabbir.
Hi Shabbir,
I plan to invest 50000 in tax saving MFs. But mu financial advisor is suggesting Birla Sunlife Dream Retirement Plan which is an insurance cum equity plan. Please suggest what you think would be best. I am 40 yrs old and would like this to be a single time investment.
Thanks,
Akshita
Dont go with Insurance if you plan to save Tax
Hi Shabbir,
Thanks for your quick response & useful link.
Can you also please guide me on how to start investing in MF, i mean what is the exact procedure involved here.
Can it be done by self online, or do we need to go through some Financial agencies, who will do all the formalities needed to buy / sell MF.
Please guide me.
Regards,
Zafar
Get an account in ICICIDirect and then its just few clicks to invest in MF
Hi Shabbir,
Since last 2 years i had invested my full amount in Tax Saving FDs.
This year i am looking forward to start investing in ELSS for Tax Saving, after getting comparisons on the returns between ELSS & FD.
Since this is the first time i am investing, should i put my entire amount in ELSS (splitting 100% in any 3 MFs listed above by you) or do you think for safety sake, i should keep 30% in FD and 70% in ELSS. My age is 29yrs.
Also to start of in MF, at this point in time, what is the procedure of the same. Can it be done by self online, or do we need to go through some Financial agents who will always be needed to buy / sell MF. Please guide me.
Regards,
Zafar
Zafar, I would have done 100% in ELSS but if you even go for 70% that would not be bad to start with and if you think its more worth it you can make 100% next year.
Also read
http://shabbir.in/better-way-to-save-tax/
Shabbir,
switching option is not for tax saver mutual funds na ?.. means in ELSS..?..
Is there switching options available in ELSS (tax saver mfs)..?..
Thanks.
You can switch from ELSS to other ELSS fund of the same fund house
sorry for late response, but I am possesing them from around 3 or 4 months, means with the time as the rate gets reduced I went on purchasing them.
Saurabh, I was asking how much more time you can give to holding this stock.
Hi Shabbir,
if i wanna invest in ELSS …whether i should invest small sip’s in diff ELSS i:e canara tax saver,birla tax relief 96,sbi magnum etc..or select only say “Canara robecco” which will be better option??
Investing in more than one fund is not much of a difference than investing in one fund.
Well I have purchased Dlf on 429, then on 402, then on 369, then on 354, all with 100 in volume,also 50 shares at 352, I was unaware about stoploss that time but now I know but its too late, plz help me and tell if I should sell my all shares in loss now or wait..
I am totally confused. plz give right suggestion if you can.
Whats your time Horizon ?
Even I invest in 1 fund, which fund should I choose? HDFC TAX SAVER or ICICI PRUDENTIAL TAX PLAN? Please do not tell either:)
HDFC Tax Saver because I have invested in that one. 😀
Hi,
I am a small investor looking to invest Rs 12,000 in SIP option from April’10. I am already investing in SBI MAGNUM TAX GAIN(D) for the past 2 years in SIP option.
Should I invest in 2 ELSS schemes or only 1 ELSS scheme? I was planning to start investing in both HDFC TAX SAVER and ICICI PRUDENTIAL TAX PLAN from April’10(2 * Rs 500 * 12). Does that sound OK or u recommend something else?
debraj, I don’t think it will matter too much if you invest in one or two funds
So shabbir.. if i am investing..
10 K – Franklin
10 K – Reliance
8 K – Icici pru
8 K – HDFC long term adv
5 k – Sundaram BNP
5 K – SBI magnum
and rest 40 K apprx in PPF & gov securities like FD, Pension plans.. den will it be right at the age of 24 ?… or should go more with ELSS ..?..
Thanx.. 🙂
Ravi, I am never a fan of FD and other schemes for multiple reasons. I try not to invest in areas where they pay interest. Thats my personal choice but for you I would suggest more equities because you hardly have any liability
my elss(fortis tax saver) duration(3yrs) completed,now i want to reinvest same amount ,is switching from fortis tax saver (growth) to fortis tax saver (dividend) will provide me the tax rebate exemption under section 80.c,kindly clearify at earliest and respond at mail id.
spjnagid, completed now does mean its still under locking period.
my folio number 1014086117,customer ref;8019831014086117 scheme 02 tax relief 96 fund elss-divident ,what is the present value?
ok shabbir.. got ur point.. thanx for ur advice…
do V have any funds which are under tax saving umbrella and dey are investing in small caps or coal/ gold mines or something like different than indices..?.. do u know any such funds ?… tell me about DSP Blackrock .. is thier portfolio is also for large / mid caps ?…
:-/
I am not very aware of many such funds but about the DSP Funds you can see valueresearchonline fund card for any fund to see where they invest mainly
dear sir,
please tell me about good tax saver mutual funds
“Open to dialogue..!!!!!..”… it seems that you are being ready for some kind of WORD WAR or something like… 🙂 .. Actually you are being angry un-necessorily.. My question is simple, in fact very simple..
Current market is 17.5 K.. all time high is 22-23 K.. Correct..?.. If you are investing (let say 75K) in ELSS, do you think that you will get same value after 3 yrs of locking period ?.. As per my knowledge, ELSS having their own portfolio & i.e. too on equity base fully… Is there any kind of other mutual funds which are tax saving but investing in very wide range of mid cap / small cap / large cap which can survive against any kind of storm in share market..?..
Whatever fund you have shown above are basically investing in large cap .. majority in ril / sbi / ongc etc… These all companies are major part of indices.. what if indices fall to bottom after 3 yrs..?.. we can’t withdrawn our money as locking is of 3 yrs.. So is it safe to invest in ELSS at 17.5 K ?.. is there any MFs which under tax saving umbrella but investing in some mines and other sectors which are only a bit affected by index..?..
Hope you will get my point by such brief writing.. Waiting for your reply dear.. 🙂
Take care..
No I am not angry but what I say is we have very little option when it comes to non-equity based tax saving and good returns without paying the administrative cost.
Now coming to the point of investing at 17k is a risk to an extent which many should not take but then what can be done for Tax. LIC for a 7% return and locking of 20 years with lots of admin charges you don’t know.
So I would still prefer funds.
Dear Sabir,
First time i came across your site.. Seems fine at first time.. I have gone through your proposed mutual fund (ELSS Specifically).. I hope you know regarding portfolio / factsheet of same…
Do u think, is it a wise investment to invest money in ELSS in such volatile market.. index is at 17.5 K.. all time high is apprx 23 K.. what return it will give me at this stage..?.. from my point of view, we won’t get remarkable return by investing in ELSS at this stage of market… We should not forget that ELSS money will be locked by 3 years after your investment.. so what you think dear about the market after 3 years from current stage of 17.5 K..?..
I am just of 24yr.. you seems to be more experience in this field.. do u know any tax saving investment where there will be share like 80:20 or 60:40 or 40:60 between equity:goverment securities IN MUTUAL FUNDS..?.. Don’t tell me scheme like endowment, pension plans etc where 20-40% allocation charges applied at first investment only.. :)..
I hope you can help me.. Waiting for your reply..
Ravi, Investing in ELSS is not an option its a thing people need to do to Save Tax and if there is return thats the best part of it. Its something like you invest 100k or else give me 33k till March.
I would suggest you also read my other article – http://shabbir.in/better-way-to-save-tax/
And then I will be open to dialogue.
Dear Sir,
I have invested SIP of 1500 in Birla Sunlife 96 tax saver (dividend)two days before at NAV of 88.31
Now i want to invest a lumpsum 20000 in tax saver.
I thought of following options
1. Invest whole amount in Birla Sun life again.
2. Invest whole amount in some other fund (from list put up on ur page)
3. Invest 10000 in one and 10000 in other fund (from the list of funds on ur page)
Please suggest me which is better option from above or if you have any thing better then let me know.
Thanks
Any of them would do. Not much of a different.
Thank you Shabbir for a quick reply.
I will invest as suggested by you.
Have a nice day!
Hi Shabbir,
I have 60K to invest in this month to save on taxes. On 8-Jan-08,I invested 32K in Reliance ELSS Tax Saver -G ( One time purchase).Last year i have not invested in Reliance. What do you suggest, should i continue in Reliance ELSS or opt someother scheme.Is canara Rebeco & SBI Magnum ( one time purchase ) safe option?
I also invested 25 K in Bajaj Century plus on 21-Jan-08. I could not pay last year’s premium. The policy is in the lapse status.Kindly suggest if it is wise to renew this or opt all together a new one.
Thanks & Regards,
Anita
Any fund you have done are good enough and I have listed the best according to me and you can opt for your list or even my list. Its all the same.
Now about your Policy Lapse I would suggest you renew it first. Then either you can continue or break it so you get whatever you would get anyway for that policy. Just remember to ask if you need to pay more to get less if you break the policy in between
MY FOLIO NUMBER 1014086117 ; CUSTOMER REF;B121431014086117 KINDLY SEND STATEMENT ON CURRENT DATE
Hi Shabbir,
I am planning to invest 50K as mentioned below.
10K -> Birla SL Tax Relief 96 (G)
10K -> Birla SL Tax Relief 96 (D)
15K -> Can Robeco Eqty TaxSaver (G)
15K -> HDFC Tax saver.
Is it seems to be fine or you advice something else.
Ritu, It looks fine.
Hi,
I have the following doubts plz kindly write in detail,
1. Should one look for the how much returns we are getting or how much dividends we are getting? If I will compare the Sundaram BNP Paribas Tax saver(G)’s NAV with Sundaram BNP Paribas Tax saver(D)’s NAV then I am finding Sundaram BNP Paribas Tax saver(G)’s NAV provide me good return as compared to Dividend. So I would prefer the Growth option. Please suggest me.
2. I have without any idea, I did a SIP of Rs1000 for Birla Tax relief 96. Is that a good one or not??
3. But for which Mf (For tax saving & for Equity diversified fund) you will suggest.
Debasish
1. Nav of Dividend decreases by the amount they pay the dividend and so its like you get some money back yearly and so Nav would always be different in both the option but return is always the same.
2. Good.
3. All in my ebook.
ASAK Shabbir bhai
i have to invest 20000 INR to save my taxes .I am planning to invest in tax saver mutual funds. I am new to it and while surfing net i came across your web site .I have gone through moneycontrol.com that states two mutual funds Birla Sun Life Tax Relief 96 (G) & Birla Sun Life Tax Relief 96 (D).
You have also listed them to be best but whihc one of them is good one with 10.33 nav or other with 88.41 nav?
Which one should i choose HDFC or Birla ?
Also what is your opinion about Can Robeco Eqty TaxSaver (G)with NAV 22?
please advice
Regards
Mayur
When going for Tax Saving I always prefer Dividend option and if you have the question why see http://shabbir.in/full-tax-saving-without-investing-one-lac/
Sir,
I have planned to invest 1000 as SIP in tax savings fund. Which funds should i opt for ?
Hitesh, I have the list which are best according to me. Select the ones you prefer from the above list.
pls anyone tell me how to invest n where , bcz im loosing 8100 rs per month as income tax pls reply
Invest in any of the above fund and that would give you lot of tax saving.
Which is best mutal fund to buy for tax saving please suggest.
Thats what is done in the article Manoj
I was looking into the dividend dates of canara robeco (or for that matter any MF) and it has declared a dividend of Rs 3 on 28th March 2009. How do I know that these dividends have already been paid and fresh dividends will be declared this year, or the payout will be done in the near future. In the latter case, if I invest in it now,I will be getting a dividend of 3 on every unit I hold?
Track your bank to see that they get credited.
Hi
I am going to invested a lum sum amount in bharati axa tax saver(dividend) and IDFC tax saver( Dividend option). Is it a good time to investment .
May be but I do not like the funds you have opted for.
Hi Shabbir,
I am new in investment and have to invest Rs. 40,000 for tax saving purpose. Please suggest.
Thanks
Niraj
The list of funds are there for you to choose. What else you are looking for ?
Dear Sir,
I have to invest around Rs 50,000. May i know where i have to invest for tax saving purpose
Any of the above fund should be good enough.
I have invested 15000 in reliance infra fund. current NAV is 10.95.. should i remain invested or switch to some other fund?
Sumit, see http://shabbir.in/best-infrastructure-funds/
hi..shabbir
i want to invest about Rs 50,000 in ELSS funds. which tax saver funds should i invest in..Should i go with Birla sun life tax relief 96 and Principal Personal tax saver funds or any other fund you can suggest..
Either would not be a bad option
I HAD INVESTED 10000/- IN UTI-GROWTH SECTOR SERVICES FUND.
SHOULD I CONTINUE OR SWITCH OVER.
If you are making decent profit I would switch to some other Midcap Fund or even to Reliance Growth Fund.
Is there any difference in return if you invest at a time or if you invest every month (SIP)?
Yes. Monthly Sip is best in volatile markets but lumpsum amount is preferred when you have a good solid bull market.
Dear Shabir,
I had to invest about Rs 50,000 in ELSS fund as tax saving exercise.Kindly advice the fund and growth/dividend option.I have in my portfolio SBI Magnum,HDFC taxsaver,HDFC LT, Reliance tax saver, Fidelity tax advantage, Franklin tempelton Birla tax relief 96 and BNP Paribas
I see you have a very good list of funds.
I want to invest Rs 40000/- in tax saving mutual funds.
suggest me which is better option ” Dividend fund” or ” Growth fund”
Also help me to choose MF.
Kindly send me the details to my email id
Regards
Rajesh
I always prefer dividend option as I get quite a chunk of money back and get the benefit of full investment. See http://shabbir.in/full-tax-saving-without-investing-one-lac/
Also I have listed the best option already in this article.
I am 73 yrs old.I require to invest Rs 50,000.00 in Tax Saving ELSS for the current FY.
Kindly advise.
K.Chandramouli.
Choose any from the list. They are the best in the business.
Hi Sir,
I believe you have got my reply & understand my concern. Since, i am Pursuing my MBA from (SCDL, PUNE)Finance Management, you better can understand the value of topics which i have asked in the last mail.
It doesn’t matter whether the course has been done on regular basis or from distance learning from any college or institute. Both have equal importance & weightage.
I insist you to please send the content regarding those topics or suggest me any best financila book, covering all the topics.
However, i believe the course material which i have had limited reading material & indepth knowledge of the topics.
Thuogh,i am active investor too & believe in regular investment through my limited savings. I want best guidance from you through this mode.
Pls help me regarding this.
Thanks & Regards,
Sanjay Singh
I would suggest you check out http://shabbir.in/the-warren-buffet-way-book-review/
hi shabbir
iam seen ur website .its great site .i wanted to knw which shares of hdfc should i buy .are hdfc warrent shares fine?which are the best shares t buy in banking section .
tahnks
I am not sure what you meant by which share of HDFC but there are two of them one is HDFC and other is HDFC Bank one is financial body and other is bank respectively. You can buy any but at the current level consult your advisor if you should be buying or not.
Regarding banking sectors there are quite a few of them and one of them I like is Federal Bank but it should be buy at declines.
Sathish,
That was a good question and I have answered it here
Dividend or Return on Tax Saving Funds
Also I think I would prefer SIP because its too volatile for lumpsum kind of investment.
Hi Shabbir,
Its very nice to see your website especially for newbee like me. I am 24yrs and would like to invest money which would help me to save tax & get good returns. I am planning to invest 30,000 in ELSS through SIP. How and what do you suggest? Do I first buy for 20,000 and then 1000/month or…? Also what do you think about Can robeco, Sundaram tax saver & quantum tax saver? What should I see, dividend or return before investing?
Thanks
The pleasure is all mine
Thanks for the Updates!
According to me you have selected the best in the business.
Sir i\’m planning to start SIP of Rs 5000 each in Birla sun life tax relief 96 and in Principal Personal tax saver funds. Can u please help whether i should go with SIP in these funds or are there any better ELSS funds in market presently.